

Ask HN: How can I get my hourly rate from $65 to $125 in the next 90 days? - ashamed2bepoor

I was inspired by some of the comments on this post:<p>http://www.zacharyburt.com/2010/02/how-i-landed-a-50hr-side-gig-with-very-little-effort-how-it-relates-to-picking-up-chicks/<p>I feel like I'm not really maximizing my income potential as a freelancer. I've been programming for 5-6 years and I've been doing it fulltime for about 2.5 years. 100% of the work I do is PHP/MySQL and I've done it all, from MVC (CakePHP, CI, Symfony) to CMSs (Wordpress, WPMU, Drupal, Joomla) to Facebook apps. I generally charge $50 - 65 / hr, mostly because I've gotten almost no response for rates above $65 / hr. But from the sound of the comments on the post linked to above, I should be making quite a bit more? Or is my skill-set just not work more than $65?<p>So I'd love comments or suggestions for working out a plan to get my hourly rate above $125 in the next 90 days. Please don't post something like "just ask for it" because I just can't believe that it's that easy.<p>Here are ideas I have so far:
   a) Clean up my resume and portfolio, which are both out-of-date and a bit light on technical details
   b) Learn Python/Django/Pylon or Ruby/Rails (I've been dabbling for awhile)
   c) Build up a little more in savings so I can ride out a bit of time between work
   d) Find places to find great work (I mostly look on Craigslist right now)<p>If I make it, I'll write a blog post detailing it all :)
======
patio11
Freelancing isn't quite my baliwick but since when is lack of knowledge a
barrier to commentary on the Internet.

1) You need to focus on marketing/selling yourself to better clients. I don't
know what your current strategy is, but hypothetically say you're primarily
getting your work from Craigslist. You're generally going to get mostly
cheapskates that way. If clients were coming to you because you were
identifiably the best in the field and they felt We Are Willing To Pay For The
Best, then they'd be offering rather substantially more.

2) Its fine to describe yourself as a PHP/MySQL programmer when you're with
friends like us. Never talk like that in front of a client. You aren't a
PHP/MySQL programmer -- that is just the tool you use to _solve the problems
that keep them from making stupid amounts of money_. Code monkeys are cheap,
people with strategic vision/soft skills/industry expertise/etc who also have
the ability to knock together a DB when required are _expensive_.

3) In service of #1 and #2: get a blog if you don't have one already. Start
solving the problems that people who have money have. They'll soon start
coming to you with their problems and offering you money.

4) Some folks have already mentioned OSS contributions here, which is great if
you want to brand yourself as The Man to do X. That could either be
customizing your OSS for their needs, adding a few feature for it, or doing
something related.

5) Find folks to mentor you. I learned more about freelance rate setting from
five minutes talking with Thomas than I had in the previous five years of
working at two companies which do consulting as their business model.

~~~
alttab
Absolutely right. Especially #1 #2.

------
pedalpete
Well, after reading that blog post earlier, I really wasn't getting anything
out of it, so I understand why you would be asking the question.

I wouldn't focus so much on how you can get your hourly rate TO $125, but
rather think of it as 'what can you offer to make your hourly rate worthy of
$125.

Is anybody really looking for a PHP/MySQL programmer? No. They are looking to
get a product/service/feature etc. built. What do you offer in that equation.
I suspect that your experience with the language is only a portion of that.

It isn't always easy to figure out what soft skills you bring. Why do you
program? What do you really like about it? Do you like creating beautiful
code? If so, only so many clients will pay extra for that. Are you able to
make systems run with incredible efficiency, so the client could save on
server costs? That may be worth the extra $$ to them. Are you good at
designing usability? If that is a missing piece, that may be valuable as well.

I've found 'what can I offer' is better than 'what can I get'.

~~~
francissson
I agree with pedalpete's comments.

But would like to add a couple of points.

One, from my experience, sorting through and dealing with all of the spam on
craigslist is more work than it is worth. Look else where.

Two, for your potential new client, it is really all about your portfolio. Do
you have a good one?

~~~
alttab
References and referrals.

People in business have friends who could always use an upgrade or need it
themselves. Offer superior service, make it feel like you are taking care of
them, on top of everything else.

What are they paying you for? Now charge a flat rate. Your total value isn't
variable to them because you do a good job consistently.

------
gexla
Some thoughts...

Project rates rather than hourly.

Get out of the freelancer mindset. You are a small business, not a roving
employee.

Become a full service shop rather than an hourly component added by someone
else. You create more value that way. Maybe even partner with a designer and
grow your team as you go. Contract out parts of the project your team doesn't
have expertise for.

Establish yourself as an authority as a developer by blogging and creating
great open code (oh, you are the guy who built that?!) If I haven't heard of
you, then you have a challenge on your hands!

Become a better salesman rather than becoming a better programmer. Though
certainly keep growing as a programmer.

Move more into niche areas in which your skills are more scarce.

Sell a unique service and build a brand as opposed to taking in nearly ant
type of job.

Sell! Sell! Sell!

Indirect ways to raise rates...

Hire cheaper developers to do work for you.

Move to an area with lower living costs.

~~~
kieransmith
Yes, yes, and yes! Another important point, in my opinion, is that while
charging higher rates, you may get fewer clients, but they will be better
quality clients. Would you rather do 10 hours for one company or one hour for
ten companies?

------
rwhitman
I've been a freelance-only web developer for 10 years.

Honestly with only general web dev skills and mostly PHP you'll be hard
pressed to get over $65/hr. I know Django and I still strike out at getting
Django projects pitched at $65/hr. But I think it has mostly to do with the
economy.

Once you want to cross a certain threshold you need to have more structure in
place as a business (with project rates and lots of time spent coddling
clients and doing documentation), some really specialized and in-demand skills
or a long-running career with some impressive success behind you.

I've pulled in $100/hr+ in the past, but it was due to a complete package of
project management, design and creative direction and oodles of documentation
and meetings etc. Operating almost as a shop, not freelance

I don't know who all these folks are that claim they're getting $125/hr rates
but I suspect they have more up their sleeve than just run of the mill web
programming. You take what the market will give you or you lose projects its
that simple.

~~~
silencio
> But I think it has mostly to do with the economy.

I don't think so. The majority of my freelance work is web development, and I
bill at least double that - $100 to as much as $300/hr if I can get away with
it, and only web development, because I know nothing about design and other
things and will freely admit to it. I don't really do anything specialized, I
just have a list of former and current clients from the past few years who are
all very happy, and nothing fancy there either. New clients are often through
word-of-mouth, which I've very much enjoyed as many clients referred to me by
a former client that I enjoyed working with are usually a joy to work with as
well. Oh, and not so much PHP, but mostly Rails, occasionally weirder stuff
(Java, perl!). Note that the hourly rate is not what I usually offer to
clients, I give them a project rate based on what they want. People seem to be
fine enough paying five figures for a completed project, not so much billed
specifically by hours (unless the situation demands such a thing).

The only thing that may make a difference here is that I live in Los Angeles,
where there are lots of potential clients, the cost of living is cringe-
worthy, and to ask too little is to ask for trouble as a freelancer. I very
much doubt my web dev skills could pull in that kind of money in, say,
somewhere in Montana. And the very extremes of my rate are extremes. $300/hr,
if you want me to pull allnighters to get something done in one week. $100 for
those super long projects that just drag on forever and you're not actually
doing anything significant..

Anyway, if I had a useful suggestion, it would be to stop looking on sites
where most of the projects are ridiculously simplistic or skills are
undervalued...like craigslist. I used to eye the local jobs via rss of
craigslist's software jobs and such, and ugh, it was all listings like "oh we
want 10 years exp with x" and offering some ridiculous pittance at best, and
"will trade (your skills) for (my...skills?)" at worst. There's some
reasonable contract work to be had on like dice.com, and there is nothing
quite like networking with your local community and going from there.

Be assertive about your hourly rate, but not too much. Anyone that isn't
coming to the table with a good budget isn't worth working with in the long
term, because they're also the same jerks that'll try to weasel their way out
of paying for the extra work _they_ want done and such. But you know your
skills and your limits, and your clients need to feel that they got their
money's worth out of you. Also, keep in mind that charging more than someone
else might really does make people think you're worth it. I don't usually get
bundled into the "my next door neighbor's kid can do this website for minimum
wage" or "what a ripoff" groups, more like the "this person knows what we need
and gets it done right and on time and is worth the expense" group. :p

If I lose projects to someone else over the price, so be it. I need to be
desperately in need of work to be willing to work on a project while extremely
underpaid, and even then I had better still be getting something else in
exchange to make it worthwhile. I accept everything from cookies and sushi
lunch to some serious credibility gain (i.e. volunteering for a good cause).

~~~
rwhitman
Interesting, I actually live in LA as well.

Here's the thing with project rates - I'm obsessive with clocking time. I
clock everything, every second. Sometimes you bid on a project where you say
to yourself "oh yea! I'm getting $300/hr for this" but what happens is as it
drags on you try to clock less time to justify the rate and just start
guesstimating. In reality if you clock meetings, calls, time responding to
emails, documentation, research, project planning etc the rate always ends up
being much, much lower. Its not just time coding.

Anyhow not saying that's your situation, but I think a lot of people who claim
high rates forget about non-production hours when they make their project
quotes.

But having Java and Perl skills are definitely more valuable than just PHP...
And yes, having established, stable and valuable clients with big $$ over the
long term certainly helps.

My personal big issue was that I deliberately dropped all my clients from pre
recession times to work on a startup and then had to find new work in 2009, to
my dismay discovering that half my old clients either went out of business or
couldn't afford me any longer... Keeping relationships up really matters.

~~~
silencio
Oh huh. That is interesting, because I was always convinced I can never charge
too little here when I need a lot of money to begin with to live in such an
area. (Just the other day I found out my health insurance company was going to
charge me $100/month _more_...almost making me consider getting a job instead
or finishing school...)

> Here's the thing with project rates - I'm obsessive with clocking time. I
> clock everything, every second.

I am too ;) I use Billings or Harvest (depending on where I'm working) to time
everything obsessively. I don't actually bill anyone based on purely the time,
but it gives me a sense of how much time it took me to do certain things
because if I end up spending way too much time hand-holding a client then
something needs to change. DO NOT get into the habit of _not_ clocking things
like responding to client emails (other than like short one liner type things)
and whatever, because you are right...it can be a huge time suck, and it's
hard to estimate how much time that will end up taking. Whoever originally
came up with the idea of quoting in excess of what you really think it is time
and money wise was smart ;)

> But having Java and Perl skills are definitely more valuable than just
> PHP... And yes, having established, stable and valuable clients with big $$
> over the long term certainly helps.

I don't even really know that much Perl...Java I learned in school, I'm trying
to do more Cocoa/Mac/iPhone/(iPad?) stuff now that the iPhone has really
kicked that off because I wasn't really doing anything with it since I had
first played with cocoa/objc in like 2005-6...I know bits and pieces. I
usually won't take on a job involving something I don't know much about, but
my scattered knowledge does come in handy as I can be extremely flexible in
getting things done the way people want them. So yeah, if PHP is your only
skill, you should branch out if at least to be qualified for more jobs out
there.

Established clients are far more important, and I'm sorry to hear that :( I'm
_trying_ to work on a startup right now, but it's hard because I have to pay
my own bills, cofounder can't quit her job yet, and other such little
things... But keeping up relationships, if only to have lunch and say hi, is a
good thing to do with your best clients. It's a tough time for everyone right
now and has been for a while, don't worry :)

------
mikeyur
I have to agree with a lot of the other comments, start thinking on a project
basis vs. hourly.

I have a friend who runs a small dev shop and has spent the past few months
selling a simple Facebook app she built.

She charged a company around $10k for the app and got that rate by explaining
how it would benefit their company. ie. Another form of interaction with
customers, better brand recognition online, lead generation, etc etc.
Apparently it took her about 2 weeks to build and she had to outsource some
design work for ~$500. Assuming she worked 80 hours over the 2 weeks, she made
roughly $120/hr.

Now, that's really good money, but that hourly number keeps increasing over
time because she realized she could resell it to other companies by simply
changing the branding and some design elements. She continues to sell it for
$10k, but her investment each time is significantly less because the bulk of
the work is done. It just costs her a few hours and the price of the design
work.

In the past few months I think she's rebranded and sold it to 4 other
companies. There are a bunch of factors into calculating the hourly rate for
the project, but she essentially made $500/hr for that work.

Think about your work differently and what you offer, sell a product or
solution - you won't get your rates up if you make your clients think of you
as just another employee.

------
wushupork
Related to what some of the people are saying here, focus on what problem the
customer is having. No small business needs a "PHP developer to create an
e-commerce system" - they need a solution. If you can show them that you can
solve their problem and help them MAKE MONEY, it's a much easier sell.

It sounds very infomercial-ly but I think it's true.

Also if you sell yourself as a PHP/MySQL developer, clients might not know
what that means or what you can do, so you'd be limiting your clientele who
are knowledgeable enough to know that PHP developers can do X. What you should
be doing is to say you can solve X, Y and Z problems, and that you've done
that for A, B, C clients.

------
richcollins
Get good at charging for results rather than hours. You can get a higher
hourly rate if you're good at it.

Find a niche with strong demand but without a lot of competition. New
platforms are often good targets (Facebook, iPhone, Hadoop ... etc)

Move someplace where the billing rates are higher. You can almost always clear
more in big cities, even after accounting for the higher cost of living.

------
psyklic
When you get new customers, tell them that you give discounts for the first
job so they can see what a good job you do. On the invoice, put your real rate
minus a discount. Then, the next time they ask for your services, charge the
real rate.

To switch existing customers, just say that due to demand, you're raising your
rates. However, for the next x hours of work, since they've been a loyal
customer, you will continue at the existing rate. Then on your invoice, do as
in the first paragraph! If it's a reasonable increase, I doubt many customers
will drop you. And you may want to wait between projects to switch your rate,
but the first x hours at the old rate still applies :-)

Good luck!

------
jacquesm
The very best way - and the simplest too - to up your rates is not to charge
by the hour, but by the job and to work like the devil.

------
dmhomee
One thing that I found useful in my craiglist sales pitches, was to get away
from pitching yourself as a LAMP developer and pitching yourself as a
consultant of popular technologies -- instead of just listing out php/mysql
etc, have a section where you emphasize drupal, facebook, mobile applications
etc. -- basically follow some of the hot markets that organizations want to
break into. This falls a lot in line with selling on benefits and not
features. "writes PHP" is a feature; "developing viral media platform for
organizations" is a benefit.

Taken with the advice that other people have on here, if you are able to make
people think that you develop technology based on thought out, data/fact
driven market/product decisions, they will be much more likely to buy from you
at a premium.

------
Zak
Ditto on selling products/solutions rather than your ability to use certain
tools.

For some clients though, it is about the tools. They need an X programmer to
extend their app that's written in X. I think part of your problem is your
chosen X; PHP is popular, and it's easy to find work, so everybody's doing it.
The supply of programmers is rather large, so it's hard to get anyone to pay
more. Sure - you're demonstrably better than the average contractor, which is
why they're willing to pay you $65 instead of $45.

Learn some other tools. Find something with a higher barrier to entry, but
still some demand. Try to be the guy who never says "that's not possible".

------
ErrantX
> d) Find places to find great work (I mostly look on Craigslist right now)

This is probably your problem. I had a lot more success finding bigger
companies with more money to spend. Or entrepreneurial types who work in the
"real world" and were willing to spend hard cash on a web presence too.

A lot of my consultancy work comes through my consultancy partner; it's all
Jewish clientele (and they are usually big spenders). We got gigs that,
really, and less than 3 month old consultancy shouldn't have got - all because
my partner is Jewish.

So you need an "in" to a niche market of clientele.

------
bigiain
'Please don't post something like "just ask for it" because I just can't
believe that it's that easy.'

It's certainly not, but keep in mind _not_ asking for it is 100% sure to stop
you getting it. You _do_ have to ask for it before anybody will give it to
you, but instead of "just asking" you're going to need to ask and have already
demonstrated (or at very least be prepared to justify) why you are worth twice
as much as some random PHP/MySQL guy off Craigslist.

------
pseingatl
As a consumer of programming, it's all too easy to compare different proposals
merely based on price. Why hire a programmer for $125 if there is one who
(apparently) can do the work for $65? Many people buying these services are
not in a position to judge the difference. So, don't negotiate on price,
negotiate on scope of work. I would also second the comment about working for
a project price, rather than an hourly rate.

------
jonah
You're not going to get $125/hr as a "PHP Programmer". You'll get it as a firm
delivering solutions.

You'll likely need to partner with/subcontract out to others with the skills
you need to offer a complete package. Marketing, design, copywriting,
photography, and SEO come to mind.

------
jonah
Above all: Impeccable communication and delivery on time as promised.

------
ciscoriordan
Where do you live?

------
ddemchuk
Rather than increase your rate, maybe you can try and increase your bandwidth.
Your rate will be able to go up as your portfolio grows and the size and
quality of clients increases.

So keep taking on more and more projects, and bring in someone straight out of
college to work for $15 an hour to take on the smaller ones with you. That's
how I started at my current job, and my boss has taken our company from $1000
sites to $20,000 sites. The more work you do, the more experience you can
leverage to raise your rates.

