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Here is a simple algorithm, espoused by many of the experts here on HN: - With each engagement, increase your rates by 20-100%. - Continue doing this until cl

Here is a simple algorithm, espoused by many of the experts here on HN: - With each engagement, increase your rates by 20-100%. - Continue doing this until clients stop hiring you. Note that if you deliver consistent measurable value, people will never stop hiring you. Basically, you are over-thinking it. You don't need to do complicated math to determine your skill level relative the average employee, the salary of an average employee, or the TCO of an employee to a company. The only thing that matters is: 1) Can you deliver value? 2) Can you DEMONSTRATE to a client that you can deliver value? 3) Can you demonstrate sufficient value to make a $X000 engagement a good idea? 4) Realize that X can be whatever number you can think of. For more detail, here is one of the definitive posts on the topic: https://news.ycombinator.com/item?id=4245960 https://news.ycombinator.com/item?id=4245960

_delirium 13y ago
> Note that if you deliver consistent measurable value, people will never stop hiring you. Assuming your freelance engagements are fairly regular (e.g. a few weeks each, not a few years), that scheme seems unlikely to be able to work indefinitely, since you're proposing an exponential price-increase scheme! For example, if I start out charging a mere $10 per engagement, and raise my price 50% each engagement, then by the 50th engagement my rate will be about $4 billion, which really limits the potential customer base.
- wikwocket 13y ago
  I admit that my point about perpetual engagements does not literally apply if you raise your rates multiplicatively, but I truly think that people will never stop hiring you if you keep delivering value, pretty much independently of your rate. The better you get at delivering demonstrable value, and the more domain knowledge you can show off, and the more your network grows within an industry, the more clients will come knocking on your door. And they will be less and less price-sensitive.
  - swissnamir 13y ago
    the question is how you quantify/measure the value you create vs. the fees you charge

_delirium 13y ago

> Note that if you deliver consistent measurable value, people will never stop hiring you. Assuming your freelance engagements are fairly regular (e.g. a few weeks each, not a few years), that scheme seems unlikely to be able to work indefinitely, since you're proposing an exponential price-increase scheme! For example, if I start out charging a mere $10 per engagement, and raise my price 50% each engagement, then by the 50th engagement my rate will be about $4 billion, which really limits the potential customer base.

wikwocket 13y ago
I admit that my point about perpetual engagements does not literally apply if you raise your rates multiplicatively, but I truly think that people will never stop hiring you if you keep delivering value, pretty much independently of your rate. The better you get at delivering demonstrable value, and the more domain knowledge you can show off, and the more your network grows within an industry, the more clients will come knocking on your door. And they will be less and less price-sensitive.
- swissnamir 13y ago
  the question is how you quantify/measure the value you create vs. the fees you charge