
Freelance rates/help - pcglue
Do you charge a different rate for meetings&#x2F;reviews vs. the actual technical work?  If a client doesn&#x27;t ask for your rates, how do you initiate the discussion?
======
brudgers
No. I charge the same rate. For travel to the client's location sometimes I
will use a per trip rate instead of a per hour/day rate for trips to the
client's site. I stopped discounting rates years ago because it does not help
me and encourages the notion that it might be ok to not pay me or pay me less
in a client's mind.

Because my rate structure is simple. I can describe it easily: W per hour/day.
X markup on expenses. Y per mile travel. Z as retainer applied against final
invoice based on my _non-binding_ estimate of the time it will take to do the
project based on the client's description (often Z is from 25% to 50% of the
initial non-binding estimate). Most projects take at least K hours/days.

I don't wait for a _potential_ client to bring up rates. Once it is apparent
that the person is soliciting services, I describe my rates. This avoids
wasting both our time when there is a gap between a _potential_ client's
economic expectations and my rates. It avoids wasting my time with _potential_
client's who balk at writing me a check to get started...willingness and
ability to pay are features of a good _potential_ client. Execution of payment
is a better criterion than a signed contract for separating actual clients
from _potential_ clients. A reluctance to pay me is a good criterion for
distinguishing bad clients.

To put it another way, the essence of consulting is the business of "nickeling
and dimeing" clients. And in general, charging money is the essence of
business. A reluctance to charge people money is not wrong but it is at odds
with trying to run a business.

The flat rate up front replaced my previous system where I would tell the
client that I would follow up with a proposal and then spend time researching
and pondering and estimating and then putting together a document and then
waiting for the client's response or non-response.

Good luck.

~~~
Communitivity
Agreed, and the above is important advice, because there is a bias on the part
of potential clients. If you do not charge them for what they expect to be
charged then that makes them uncomfortable with hiring you. In other words, if
your rate is lower or you give them freebies they weren't expecting, then they
think you are are having trouble getting work - and what do the other
potential clients passing on you know that they don't? Sometimes they think
this consciously, sometimes subconsciously. In a way, it is like dating.. your
potential date has to feel appreciated, but not so appreciated that you look
desperate.

I see this in starting consultants all the time, though usually it is as a
discounted rate rather than out and out not charging for somethings. These
consultants don't realize that they are telling potential customers 'I value
myself at X, less valuable than my competition'. They also don't realize that
once you give a customer a rate it is difficult to raise the rate later and
retain the customer (it can be done, but puts stress on the relationship).

My advice is to charge what you are worth. One way is to figure out how much
you would be making in a corporate job, not as a self employed freelancer. Say
$160k. Now, once you go self-employed you will need to pay an addition 6.2%
(12.4% total) for social security on money up to $118k, 2.9% for medicare, and
to be safe you should allocate 25% to health care costs (seems unreasonable,
but it does add up - you can trim here to match your health, but it would be
better to sock away any extra in a given year). Back of the napkin, and very
roughly, that means you need to be making $261k to approach the same take home
(261000-(.25 x 261000)-(.124 x 118000)(.029 x 261000)-(.05 x 261000)). Given
that if you work 8 hour days (not likely), and allocated 25% to overhead, that
gives 2000 hours * 75% = 1500 hours, and a rate of $174/hour. However, your
overhead might be more, and there are other costs (such as liability
insurance). Also, you will be better off if you charge by the week, rather
than the hour, because your accounting will be much simpler. I am neither an
accountant, nor a lawyer, so consider the above my personal opinion and do
your own due diligence before starting down this road. It is a great road, and
managed properly can be successful. Beware though, it is high stress, and will
eat up your time with your family.

~~~
troels
I would say this formula only derives the minimum reasonable rate as a
freelancer. It basically ends up netting you the same as you would in a
salaried job (adjusted for risks/expenses). But I would say you should be
making at least a bit more this way, for it to make sense as a career path.

For comparison, I'm working as a contractor now and making between 2 and 3
times what I could make in a perm position. That's adjusted for expenses, sick
days etc. It does not cover vacation though and it assumes that I am able to
line up new contracts back-to-back, which may not always be the case.

~~~
Communitivity
Agree 100%. I derived my formula just to match what you would make in a
salaried job, and there are other pieces to factor in as well that I left out
for simplicity. For it to make sense you need to figure out how much more you
want to make for it to be worth it as a career. If you are just starting out
as a freelancer though, you might be ok with just matching salaried for your
first year clients.

------
mattbgates
While I don't charge for reading an email, I do tend to charge my regular rate
for a Skype or phone call. If you don't charge your clients, they will take
full advantage of your time, and they need to see that you are a professional
and your time is money. If you want to offer your first meeting on the phone
for free, like a consultation, on what they want, what your terms are, than
that is no problem.

I have made the mistake of not charging in the past, and I don't technically
charge to read or respond to emails, though I might factor in some of the work
- at least - say something takes me a minimum of 25 minutes to do, I will
charge an hour of labor because I've had to take some time out to understand
their email and clarify that the work they want is accurate from the
information I understood it to be.

In this fast-paced world, meetings can eat up a lot of [your] time. And
sometimes you do get those clients who want to meet you in person or they
always want to talk to you on the phone. I had one client who kept wanting to
meet with me every single week, and I lived close to her business, about 15
minutes away, and the first two or three times, I did not charge her for it. I
was naive and just happy to have her as a client, since her business was
popular in town. It got old real quick. I decided to charge her her for those
meetings, which usually lasted anywhere from an hour to two hours. Once those
charges came, the meetings switched over to email or a very brief quick phone
call real quick.

I have since trained my clients to send email. Paper trails are much more
accurate than in-person meetings or phone calls. They protect me and my client
so there are no misunderstandings of what was said vs. what was heard. Clients
will usually send me an email with work they want or need. Before I start any
work, I normally reply back and inform the client: "Please confirm by replying
that it is okay for me to begin an invoice and work on what you want me to do.
You will be billed at my normal rate of X per hour."

This confirmation they reply back with is an email of their recognition that I
am doing work for them and my billing has begun. While I've never had issues,
stating your business clearly of what you are doing, what you are charging,
and them agreeing to you doing it, is for your own protection and theirs. An
email can protect you as it can serve as a legal contract in the court of law.

------
tedmiston
You have to initiate the rate though you can inquire about their budget.

I wouldn't charge separate rates. As soon as you do this, you open yourself up
to needless bickering about how much of your time was spent on x vs y. It
becomes complicated to separate sessions that are programming intertwined with
technical discussion.

------
pcglue
Thanks everyone, it's been helpful to hear how others do things. I already met
with the client and exchanged a couple emails. First meeting I'll do free
because I want to vet the client as well. But this client asked for another
meeting to go over details and still hasn't asked about my rates. In my reply
agreeing to this next meeting, I also mentioned what my rates are. Client
accepted my terms right away.

I freelance on the side, so I don't do this a whole lot, but this was the
first client I've come across that didn't ask about rates at the very first
meeting. I've come to suspect, though, he's already financially independent
and this business is a "fun" thing for him, so maybe that has something to do
with it.

------
stephenr
An initial call I will do for free, to find out what the client wants, how I
can help them, etc. If we agree to move forward, I'll bring up payments with
them, part of which is agreeing on a rate.

After that, any significant time is billed, and labeled so they can see where
the time (money) is going.

------
troels
I wouldn't charge different rates. The way I look at it, when I'm charging an
hourly rate, the client is paying for my time. What value the client derives
from that time isn't really relevant to the cost.

Or put another way. I know I can sell my time at X in the market, because I
have done so before. Thus, it makes no sense for me to sell it at a rate lower
than X, regardless of what I actually do.

