
How Much to Charge as a Freelancer - alipang
http://www.jamiebegin.com/how-much-to-charge-as-a-freelancer/
======
moron4hire
My lowest rate is $100/hr, as a single-person consultant with almost no
overhead. Some people charge lower rates for different types of work--like
documentation--I see no sense in it, since it's still tying up my time and
that's what is being bought. My preference is to tinker on my own projects and
not work for other people; the client's job is to entice me away from my
preference.

I charge extra for anything I don't want to do. It's $300/hr for VB6, Crystal
Reports, or MS Access stuff. I know the client can get someone else to do it
cheaper. They frequently tell me as such, clearly missing the point that I
_want_ them to get someone else to do that shit. There is no way that stuff
helps my long term development.

No, I don't stay 100% active with these prices. I have a steady 20 hours a
week of work at $100/hr. Does that make me more or less rich than a person
working 40 hours a week at $50/hr? Hard work is for suckers.

People complain about me being expensive until I release the first milestone.
After that, they tend to shut up about the price. What's cheaper, a $25/hr
developer from Croatia who takes 6 months to deliver the project, or a $100/hr
developer who takes 2 weeks, with the added bonus that it actually works?

Something that always bothered me when I was a working stiff: I was always
evaluated for pay based on how old I was, whether or not I was married with
kids, and whether or not I owned my own house. No, no, no, you pay me based on
what I can do, not on what I need. That's why (amongst many other ethics-
related reasons) I consult now.

~~~
deletes
( fourth paragraph )

Why are you comparing a bad developer from Croatia with a good one from
somewhere else( USA I assume ). The situation might as well be reversed, you
can't assume someones skill from their geographical location.

~~~
moron4hire
Allow me to explain:

From their geographic location, I can assume that they are likely to charge
significantly less than me.

From the quality of just plain not being me, I can assume they aren't as good
as me. I have yet to have experience prove this assumption wrong.

I've worked on projects with other developers in San Diego, Chicago, Miami,
Iran, India, Croatia, and many other places. They've all been pretty crappy
developers whom I can only imagine lied about their credentials, because I
just can't imagine how it is possible they make any software for anyone. The
client has eventually fired them all because they realized what a bad deal
they were. The only difference between them was the hourly rate they charged,
meaning there were often more from India than San Diego.

~~~
gperetin
Developer from Croatia here :) Yes we do charge less because of our geographic
location, but I wouldn't say significantly less, or maybe not at rates you are
talking about ($100/hr really isn't that much).

That said, I spent 2 months in San Francisco this summer and was able to find
a job for higher rate just because I was there. I guess it comes with
territory. :)

~~~
ankitml
Location has heavy influence on prices.. look at other professional services
even inside US. Doctors / counselors / lawyers etc.. everyone's prices depends
on location.

On the other hand you cant say about quality. Ya India has lots of crappy
developers, but that is just because there are way to many developers. Good
ones dont need to market themselves too much and hence most people would have
never heard about them outside their circle of clients.

------
tptacek
This is a great post, an unusually great one on this subject, and I only have
this to add: don't charge hourly. You can break your finances down by the hour
if you want, but your customer should interface with you on a day-rate basis,
or, if you're ambitious, a week-rate.

I'm not sure I've ever talked to someone who moved from hourly to daily and
regretted doing so.

~~~
Tichy
My problem is that if I charge daily I feel obliged to work at least 8 hours a
day, which frankly I often don't manage. Some days I waste too much time on
the internet which I don't want to bill, or I am too tired (unfortunately my
sleep is unreliable).

It's a bit lame, I'd like to be a better person who can just do a normal 8
hour day, but so far I have always failed. One reason I like freelancing is
because I can only charge for the hours I actually work. It's also a major
reason employment is not for me.

~~~
tptacek
There is no such obligation; in fact, disposing of that obligation is part of
the point of billing daily instead of hourly. Think about it this way: when
you bill hourly, not every second of that hour is spent in diligent work
either.

~~~
Tichy
I'll try that next time, must admit I really have to overcome some inner
resistance. I've been thinking to try "project based pay" again for that
reason (fixed price for delivery/milestones), but that is of course fraught
with other problems. Most importantly the dependence on other people that can
delay execution and therefore also payment. And of course the difficulty of
making good estimates.

------
andy_adams
I'm still new to freelancing, so I don't have a ton to add, but I'll note that
many freelancers (myself included) don't interface directly with the customer.
As a solo programmer, I do a lot of work for firms that themselves are working
with the customer.

Being one step removed from the customer means I don't have as much bargaining
power to charge based on the value I'm providing. The firm I'm working with
has already charged based on value, and now I need to fit within their budget.

I know the answer is to "break out" of this situation, but especially as a
programmer (and not designer, marketer, etc) I've found it difficult to charge
based on business value when there is a sea of programmers out there willing
to work for way less than me. Just to be clear, I think this is good advice,
but boy, implementing it is a daunting task.

~~~
wpietri
You shouldn't worry too much about "way less than you".

Think, for example, about the food you buy. For most people, there are
alternatives available that are much cheaper. E.g., you could be buying beans
and rice in 10 lb sacks. Or you could be haunting grocery stores for scratch-
n-dent sales on generic food.

Now think of a specific purchase you made and ask yourself: Why do you pay
more than the minimum? What are your motivations, and how do you make your
choices?

Sometimes price matters a lot, and it always matters a little. But it's rarely
the biggest factor in a purchasing decision.

------
lifeisstillgood
A small suggestion (and boy I do _not_ have this all figured out yet)

Charge by feature, estimate in your head how long a feature will take,
multiply by your secret hourly rate, and say that will cost X dollars and be
ready at the end of iteration one.

This is good for several reasons

It ties the billing cycle to a feature a client wants instead of to your time
which they could care less about.

It focuses on the clients features - so you are always talking their language.
I am trying to get client to write a press release for the feature (think
scrum story but more visceral)

The aim is to break down the project into chunks the client cares about and
thinks about in their terms and then to charge for it in increments that are
of value or interest to the client. Usually this is on the order of days -
this way you are charging very small fixed cost projects - reducing your risk
whilst getting off the per hour billing mindset

It also allows you to find any way, some way to measure business value from
the feature (hits per day, minutes saved per sales call - whatever)

Being the person who talks in their ideas, and shows how they brought in more
revenue or higher kPI is a good place to be.

Then raise your secret hourly rate, and features just get more expensive.
Instead of arguments about hourly rates and full time salaries

~~~
wikwocket
I like this approach; the other reason it is good is that when the client sees
the proposal, they get choices. They can see the breakdown, see which feature
costs how much, and customize how they want it.

This involves the client more, making it more of their project, and also it
changes the dialogue from "Should I hire them?" to "Which features should I
hire them to do?"

The only thing I would change is that your expected time per feature times
your hourly rate is the _floor_ cost of each feature. Be aware of your costs
but do not charge solely based on them. If feature X is a huge win for the
client but is easy for you (due to your years of experience, built-up tech-
stack, or home-built tools), don't give it away for peanuts!

~~~
lifeisstillgood
Yes it makes it very easy to shift features around to get a decent spread of
easy and hard in a week / iteration.

It's also useful to have a check - more than a three day estimate basically
means its too big - redo the press release

As for the floor cost - maybe. You still need to keep your feet on the ground
at some point so increasing your rates and multiplying up is a fine approach.
When you have an obvious winner go for much bigger rewards - but not everytime

------
hanley
The Founder & CEO of Freshbooks released a free eBook on this topic. Really
quick read and I found it useful.
[http://breakingthetimebarrier.freshbooks.com/](http://breakingthetimebarrier.freshbooks.com/)

~~~
raymondduke
I was inspired by his post and wrote one of my own
([http://raymondduke.com/blog/improving-your-copywriter-
pricin...](http://raymondduke.com/blog/improving-your-copywriter-pricing-
strategy)).

His (free) eBook is sitting on my Google Drive. I should get to reading it
soon.

~~~
hanley
IIRC it only took me an hour or two to read the book.

------
elclanrs
As a freelancer I think overall, clients prefer fixed prices over hourly
rates. I take this approach, if project takes less than 10h I bill per hour
otherwise I offer different packages and add-ons. Say client wants a fairly
big responsive site with WordPress backend etc:

    
    
      ---- Essential ----
      * Basic site (static, up to 5 pages)  
      * 8 extra pages  
      * WordPress + Blog  
      * Mobile/Responsive Layout
      * Social Media Integration
      * Usability, feedback by professionals
      * Basic SEO
    
      ---- Additional ----
      * Maintenance 24/7
      * Setup server and domain
    

These packages have a fixed price that has been pre-estimated in hours.
Obviously not every project is them same, so sometimes you work more and
sometimes less that what was quoted. For out of the ordinary features such as
complex grids, user profiles or highly dynamic sites I estimate the extra work
in hours as well and add it to the total cost.

Then I divide the project in 3 milestones: Pre-Production, Production and
Post-Production. A 25% deposit must be payed after signing the contract,
another 25% after Pre-Production and the rest on completion. The contact also
clearly states that any major changes in layout, design or content after the
Pre-Production phase will be quoted extra.

This has been working for me over the years. Clients seem happy with the
process.

~~~
porker
> * Maintenance 24/7

A word of advice. Never, ever set yourself up for this if you're a solo
freelancer, unless there's 3 of you (or at a pinch 2).

The time the client needs this will be when you're a) on an airplane b) in bed
with the flu c) on holiday d) having a romantic evening/weekend with your
other half.

Nice money and the client likes it, but you have signed away your entire life
in exchange.

~~~
elclanrs
Maintenance is a monthly fee, forgot to mention that. Sometimes clients do
call in unfortunate situations, but they pay for that privilege. All
additional services are opt-in.

------
nazka
Hourly rates undervalue consultants. It is a simple price based on quantity
that we place on the front of customers, and have nothing to do with value,
even more with relationship.

There is an awesome book about that. [1] It tells you how to set the right
price and the right relationship with a customer. The philosophy is: firstly
to show them the value you will provide, secondly to be able to set the right
price, and thirdly the fusion of both with the contract. At the end, it is not
a question to set an hourly rate and count the hours; it's about how much
value you can give them, and set the right price. Then consultants build a
contract with rules that reflect that (and protect them).

You have a lot of explanation inside with different chapters. It is a must
read for me; even just the chapters that explain each ways to set price are a
gem. You can easily adapt it to any business.

It is also similar to an post on HN some weeks ago. [2]

[1] [http://www.amazon.com/Value-Based-Fees-Charge-Youre-
Worth/dp...](http://www.amazon.com/Value-Based-Fees-Charge-Youre-
Worth/dp/0470275847/ref=sr_1_8?s=books&ie=UTF8&qid=1374792392&sr=1-8&keywords=fees)

[2] [http://sixrevisions.com/business/earn-more-on-
projects/](http://sixrevisions.com/business/earn-more-on-projects/)

------
ballard
Charge whatever you can get away with. Set a number and show willingness to
walk away.

I used to do cloud consulting from an LLC after doing client-facing enterprise
AWS consulting.

Consulting experience TLDR braindump:

    
    
      * Enterprise shops look down on people that don't charge enough.
      * Some shops feel entitled to get a bunch of stuff for free.  Hold your ground and explain you have bills to pay and can't set a new precedent.  Your time is valuable.
      * Free assessments are an easy way to determine how much crap and hand-holding you'll have to deal with.  It'll also let you show you know what you're talking about and be able to 
      * Research solutions before raising proposals.  Anything you raise will basically be put on you to support.
      * Raise prices every year or two.  It'll be less of a surprise if it's a fairly regular thing and it's mentioned ahead of time.
      * Work on- vs. off-site has +s and -s.
      * Work with fun clients that pay on-time and don't do hourly.  Hourly is for noobs that take too long.  Milestone-based at the same comfortable hourly rate puts the onus on you to always deliver.
      * Getting a % of the milestone upfront for a good faith deposit.
      * Don't do Net 30 or + ever... Collecting will be a hassle.  Net 10 -2%, 15
      * Master agreement
      * Put milestones in writing to be clear.  (Contracts are only as good as the relationships on which they are written.)
      * Engage with the highest ranking person you can, and you'll more or less own the place.  (Just don't get too cocky, instant hubris.)
    

HTH

------
bsimpson
My rule of thumb is take what you'd expect at a full-time job and divide by
1000. So, if you'd make $130k in salary, charge $130/hr for that work as a
freelancer.

~~~
wpietri
When clients ask you why, the answer I give is that professional services
people typically bill about 1000 hours a year. The rest of the time goes to
sales, marketing, learning new tools, and other non-billable work.

That said, once you are consistently busy, you should raise your rates, just
like the article says. When clients ask you about _that_ rate, just say,
"Well, that's what other new clients are paying." Nobody can really argue with
that.

I've also found a lot of value in having a high headline rate that I discount
when I actually want the work.

------
ropz
In the UK, my lowest rate is equivalent to $75 an hour. I can read and write
code, but most of my work is documentation related. I, too, like to tinker
around with my own projects, but tend to do that between gigs. I'd be
delighted if I could work for 30 hours a week and spend the rest on my own
projects.

~~~
tjr
Do you have any tips on finding freelance work doing documentation?

~~~
moron4hire
For finding any kind of freelance work: make lots of friends. The online
clearinghouse sites are a great way to end up doing too much work for too
little pay for a shitty client. Everyone needs work done or know someone who
needs work done. Work the networking.

And I mean friends. You're not going to get business out of a guy you just
met. You're probably not going to get business out of many people the first
time they _ask you_. Never ask them if they have work they need done, let them
complain about not being able to find someone, then mention you do that sort
of work (whatever it is, if you're smart you can figure it out well enough to
do better than the majority of people). Don't back down on rate, they might
balk at first, but when things get dire for them and they still can't find
anyone, they'll remember you.

Avoid debt like the plague. It'll make you a slave to a constant, regular
income. I have constant, regular income, but I also know I have urges to take
3 months off at a time. Debt is the mind killer. It's a lot easier to face the
prospect of losing a contract when you know you have 3 months before you need
more money, not 1 week.

EDIT: and definitely lie to your in-laws about how much you work. A) Few
people my own generation can get over "not having a good job", fewer still of
the older ones. And B) they might think not working for a cluent means you're
not busy and they can make demands of your time.

~~~
pyoung
How long did it take you to land your first gig? This definitely seems like
the way to go, but as you can imagine there is a heavy amount of luck involved
with your process (i.e. if all of your friends are not associated with
companies that need your skills, then you probably aren't going to find many
offers).

I am currently on a sabbatical of sorts, and am keeping the option of doing
freelance work as a way to extend it, but so far, all of the 'dude, this would
be great for you' opportunities from friends haven't panned out. Part of the
problem might be that I don't really need the work, so I haven't been
following up too aggressively, but it still feels like I would probably have
to go outside my network to land the first gig.

~~~
moron4hire
its not as much luck as you make it out to be. If you don't have any friends
who work for companies that need work, then go make new friends.

I had my fisrt gig within a month. in that month, I turned down a couple that
would have been too low of a rate or bad work.

~~~
Anonymous238
I stumbled into a lucky situation maybe 5 years ago. I posted a topic on a
development forum mentioning my services and linking to a couple of examples.
I received a few responses, people wanting work done for a couple hundred
dollars, which would basically be a waste of time. Anyway, I get caught up
with other projects, and a few months down the road someone sends me a message
on AIM, saying they saw my post, and needed a quick project done in the next
couple of days. Turns out they're a huge firm in New York with a bunch of
Fortune 100 clients. Why on earth they sent me an instant message on some
half-assed forum post, I'll never know. I ended up working for them for years
and 80% of my work originated from them. It launched my career, and I quickly
went from being a freelancer picking up scraps to working on big name projects
and networking with tons of great people. All thanks to a random forum post,
one of the few I ever posted during that time.

~~~
moron4hire
I think that is generally how it works. Big companies don't all operate
through ossified HR departments, and even the ones who do still have rogue
elements who are responsible for most of the productivity in the company. If
anything, I'd probably make it a rule to only work with people who do _not_
try to make me go through HR hoops to work for them.

I don't think of it so much as luck as "having many irons in the fire". None
of the opportunities you will end up pursuing will be that good of a chance of
coming through, we just kind of delude ourselves into thinking certain ones
are better than others. It just becomes a game of stacking up enough low
probability opportunities that eventually one of them comes through.

------
moron4hire
Here is another issue about not charging enough: clients don't respect you.
You are the same exact person at $50/hr versus $500/hr, but a client will bend
over backwards to make _you_ happy at $500/hr, whereas they will walk all over
you at $50/hr. You need to charge higher rates just to maintain a healthy
relationship.

------
seltzered_
Has anyone ever increased the rate on their existing client by 30%+ before?
How did it go?

Currently in a situation where a contract was offered to be extended again,
but my roles have creeped way outside of coding/documentation into screencasts
(which reqd purchasing a better machine + Adobe CS), engineering support, and
sales trips in the future.

~~~
phpnode
yes. just make sure you have another client ready to pay your current rate +
X% and use that as leverage to increase your rate for your existing client to
current rate + X% + Y%

------
csbartus
I'm trying to charge $50 as a designer & developer. I have many requests from
US who are willing to pay this amount but they want me to be there, to meet
personally first. Is that a common request or just an elegant way to say bye?

~~~
jes5199
How much would you have to charge to be able to fly to the USA every 2 months
and meet with clients?

~~~
csbartus
Even I'm charging more the common answer is: First we are trying to find
somebody here (NYC, Chicago), if not we will get back to you.

------
orblivion
I can't believe people have asked me "how much do you want to make?" when
giving me career/contracting guidance. I'm glad somebody else out there
recognizes how silly that sounds.

------
maaku
As much as your client is willing to pay, and no more.

