

Keep losing freelance work - plate-it

I have a day job, but I'm looking to break into doing some freelance programming.  However, I keep losing potential jobs because my price is too high.  I have been saying my price is $50 an hour, which I don't think is unreasonable considering my experience.  Should I lower my rate, is there somewhere I should be looking for work?
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jm4
You could consider raising it. I did some freelance work several years ago and
offered my services for what I thought was a very reasonable price-- $50/hour.
I was losing a lot of jobs at that rate.

A friend told me how his father had been in a similar situation. He was
offering a superior service that was, in many cases, lower than what the
prospects were already paying. After being turned down repeatedly he finally
asked why. He was told that he couldn't possibly be able to deliver the
quality promised for the price he was asking. The low price created a
perception of lower quality-- lower than what people were willing to accept
for that price. So, they'd tell him it was too expensive or they just weren't
interested.

I doubled my rate and not only got more work but better work. You could try
it. The worst that will happen is people will still say no and you can always
let them negotiate down a bit. Still, like others have said, it depends on the
going rate where you're doing work.

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edw519
"After being turned down repeatedly he finally asked why."

This is the key. Don't guess. Find out.

Notice that his father didn't solve his problem until he actually found out
what it was. Why don't you do the same?

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plate-it
Wow, harsh.

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timwiseman
Hardly, its good advice.

I would add thought, that when asking remember that the person may not be
telling the truth. They may actually want to hide something if they are doing
it out of some personal prejudice they don't want to admit or because they
have already made up their minds about the winner but are going through a
bidding process for show.

Also, they may think they are telling the truth but actually being influenced
by something they don't realize. For instnace, if the poster were unusually
young they may feel he is immature or lacking experience even in the face of
evidence to the contrary.

One way to at least mitigate this is to solicit opinons from many people that
originally turned him down.

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sunir
When I was freelancing on the side, I used to think that $50/hour was on the
high side, but it's actually on the low side. You should charge at least $75/h
if not $100/h.

Don't believe me? Consider: Barely anyone works 40h/week of billable time.
Most full-time freelancers bill 4-5h/day and do non-billable work the rest of
the time. That's 20-30h/week of billable time about 50 weeks of the year. Say
you bill 25h/week for 50 weeks, and you want to make about $80k. That comes to
$64/h, and that doesn't even account for your expenses!

Here are some resources on freelance benchmarks and rates.

<http://www.freshbooks.com/reportcards/all-industries.php>

<http://freelanceswitch.com/rates/>

(Disclaimer: I work for FreshBooks.)

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wizard_2
I'm a freshbooks customer who's also an ex full time freelancer. I agree with
sunir. If you can follow through on your work, you're ahead of the game.
Consider your target demographic and how they consider paying for things. I do
mostly systems administration and web programming these days, but I have a
strong IT background, if I have a client that I want who's on the fence about
if they need me, I ask about their monthly costs. Usually they're paying way
too much for telephone, internet, email etc. I can usually get them to
leverage my price against a year of overpaying for services, but that's just
part my pitch. Which is a slightly different topic.

The point is, you're worth spending the money and if they're paying you enough
they're worth putting in extra effort. It's mutually beneficial.

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mikeryan
There are a ton of variables here. The only data point I can add is that in SF
web/interactive work $125 is a pretty fair average rate.

Some of the variables to consider. 1\. Location - NY and SF are going to be
more expensive. 2\. Type of work. HTML is going to be lower generally the C
for embedded devices. 3\. Length of contract. My rate could go down if you
hired me for more than 3-4 months work. (the more time you have to spend
looking for work the higher the premium) 4\. The Client. Large corporations
are going to spend more money generally then a local restaurant. Note you're
not going to get a lot of large clients working only part time.

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vaksel
if your "freelancing" boils down to bidding on stuff on freelance sites, $50
is way too high.

if your "freelancing" boils down to being referred in real life by past
clients, $50 is pretty low.

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wmblaettler
I quote per job, rather than tell them my rate is $100/hour. These are
"billable" hours though, not actual hours. Time spent corresponding, etc,
doesn't get factored in. So the effective rate is a bit lower.

Most of my projects tend to be as a subcontractor to other
developers/designers, so the requirements are very well-defined. If you work
directly with clients and quote the whole job you need to make sure the scope
is WELL defined and you fully understand the client's expectations or you
could get burned with changes and out of scope aspects.

All of my work comes from referrals or directly from conversations with
acquiantences.

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mixmax
Where are you located? In Bangladesh it's probably on the high side, but in
Copenhagen it's certainly on the low side.

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radley
My best advice is to get involved in your (platform here) local user groups.
Not only are they a great source for networking, it's a target-rich
environment and projects expect to pay a reasonable rate for freelancers.

You don't have to wait for a meeting - most groups have a mailing list /
discussion group. You can introduce yourself and tell them openly that you're
looking for work. You can also sign up for (your platform here) groups on
LinkedIn. I signed-up for a few and received several "cold calls" for work
within a week.

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abalashov
As a small business owner of what is essentially a one-man show, I side with
the folks who say that you should raise your rate. Pricing has a way of
setting expectations and providing a perception of quality. If you bill half
as much as anyone else, the question on anyone's mind is going to be, "What's
the catch?"

Sometimes there isn't a catch, and sometimes there is. Unfortunately, in my
experience it is a pretty safe bet with most people I could conceivably
subcontract my work to that if they are naive enough to work for an obscenely
low rate, they are not up to the task because they are also naive in other
ways. I hate that this prejudice also hurts people who are just legitimately
happy with a lower rate, but that's just how it goes.

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qeorge
You're price isn't too high if your work is high quality. If anything you can
raise it.

I've found its often better to quote per job than by the hour, especially for
new clients. $50/hour is cheap if you get a lot done per hour, but expensive
if you don't.

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niels
In my experience quoting per job will lead to a very bad experience for either
you or the customer, and possibly both. By quoting per hour, you will be payed
for your work and the customer will only pay for the work done.

~~~
jonknee
Give both. "My rate is $X and I estimate it will take at least Y hours." That
way they get an idea of what it will cost in total and also how much it will
cost them to make changes.

~~~
niels
What I meant exactly is, give an estimate and an hour quote. Let the client
know that if you complete the project in less time, you will charge less and
vice versa. I've found that in all projects specs change and things take less
or more time than estimated. Nothing sucks more than working free because you
underestimated a task. Also if you have a fixed price, you will invariantly be
motivated to take the quick and dirty solutions everytime. This will not lead
to success for the project.

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bmj
Here in the States, I charge $60/hour doing mostly HTML monkeying for a good
friend. If I'm not doing friendly or non-profit work, I'll charge at least $75
for non-programming work, and upwards of $100 if it requires actual coding.

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CyberFonic
I couldn't see where you mention how you are looking for work. The various
websites have never worked for me. Too much competition from low living cost
places.

In my experience if potential clients know that you are working at a day job,
then they will try to beat you down. So better not to tell them that.

The best rates come from person-to-person contact that comes from networking.
The more you understand the clients' area the business the more you can
charge. Charging by the project also works well, especially when you translate
that into a value proposition that is appealing to your prospective client.

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csomar
If you are going to use a freelancing site like rentacoder.com you'll finish
working $10/hour until you get good feedback. But I'm not sure if you got good
feedback your rate will raise. The median is $20/hour for all freelancers in
Odesk.com (which is much more better than rentacoder.com)

A solution that work: build something and make it open source and free.

For example build a Wordpress template (a premuim one) add SUPER
functionnalities, good silk design...

People who will love your design, will hire you. You'll get a lot of requests,
then choose the best.

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henrrrik
Keep your hourly price as high as possible. Like other people have pointed out
it tells the client that you're good, but it also filters out dead-beat
clients that only care about price.

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davidw
Depends where you are, and what you're doing. That seems like a reasonable
rate to me for a lot of things, but it's low in the bay area, and maybe it's
high for other places.

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plate-it
I'm in New York, everything is expensive so I thought it was pretty
reasonable. For example, one job I gave an estimate on, would easily be a 100
hour job. So I gave an estimate of $5000. They wrote back to me and said they
got another offer for $1500.

I'll defintely try raising my price.

Any thoughts on good places to look for work. I have been primarily using
Craigslist. I've been getting a good amount of replies. I do not like the
sites that make you bid for the work. Seems like that requires a lot of
effort, for low prices.

~~~
jeremyawon
i'm curious, what kind of software are you developing / what kind of companies
are you serving as a freelancer?

~~~
plate-it
Mostly PHP using CakePHP and some Python.

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ankeshk
Quit charging per hour. Start charging on a per project basis.

In the long run - you'll make more money. And will find clients who won't
quibble if you take an hour more to get the job done. No time pressure -
better output - and better pay.

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henriklied
As a Norwegian developer, $50 sounds incredibly low. You can't get a lot of
contractors to do something for you for under $150. But the cost of living is
higher in the metropolitan areas here than in the U.S.

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sganesh
The rule i usually use is take your yearly salary and divide by 1000 (not 100)
and add another 10% to 15% to it.

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Retric
That does not sound right.

100,000 / 100 * 1.15 = 1150$

At 1/4 time 1150$ * 20hours a week * 25weeks = 575,000.

PS: I would say current salary / 500 for part time work ( < 20 hours a week
for less than 1 month) and around salary / 1000 for full time work for 6+
months. With a sliding scale between those numbers.

