

Ask YC/HN: What are some reasonable rates to quote for technology consulting? - Mystalic

Hey everyone.<p>I'd like to gather the great HN community's opinion on technology consulting rates.<p>In the span of two days, I was approached by two people in my network, one to help with ad and site monetization and testing, one to help with making sure a new web-based start-up is built optimized, help with social media/networking marketing, search, etc.<p>I was asked about my rates, and I had none (since I've never consulted in this fashion, I'm just out of college after all).<p>What are some rates you've heard of or used for your consulting or work, both non-programming and programming?<p>Thanks
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tialys
Well, to start, if you really know these people, ask what their budget is and
set something in that range that you think is fair. If you're not sure about
the people, then you ought to consider things like rent, food, etc...

One great place to go is the <http://freelanceswitch.com/rates/> calculator.
It was designed to help answer questions like these. If this is your only
source of income, this calculator is invaluable, but don't use it as the only
determinant of your price, rather as a guide. You might break even at $50, but
if the place you live in pays more in general, don't be afraid to ask for it.

One last thing, don't back down on a fair price. You would be amazed how easy
it is (especially on your first jobs) for someone to talk you down below fair
market for your work because you're afraid to lose the lead. Know what you're
worth, and charge it.

Good luck!

~~~
davidw
Ask them about their budgets? That's like saying "oh, ok, how much do you
have?". Even if they tell you, they're not going to like it, which may lead to
probelms in the future.

~~~
tialys
As I mentioned, it's for people you know (and would be comfortable having that
conversation with). I've worked for friends, and I'm clear up front that I'm
not free, but I'm also more willing to work with them on price for stuff (as
it's usually small and fun). Also, it can help you to determine if the
customer is serious (Make me Facebook, $200) or not.

It's not always a great way to approach things, but sometimes (and you'll know
when) it is a decent approach.

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iigs
In major metros in the USA $100/hr is entirely reasonable for someone who gets
results directly.

If you're performing a specific task you're very comfortable with, or will be
on call, bill the full rate in 15 minute increments.

If you're venturing outside of your comfort zone and/or providing soft
consulting such as advice, discount appropriately. Likewise, if they'll be
providing you work in bulk (some number of hours per week, or a long project),
consider discounting fairly aggressively as well.

Freelance hours (1099) are different than employee hours (W-2) from a tax
perspective, so be sure that your income is equivalent to what you'd want to
have as an employee at least.

~~~
dhimes
In particular, you will have to pay an extra 7.5% in soc sec tax. That's not
even talking about insurance issues, which you can (hopefully) ignore for a
while if you are healthy and single and living in a state where you can
legally do so.

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teuobk
Don't be afraid to ask for what you're worth. On the other hand, you don't
earn anything if you price yourself out of the job.

For reference, the going rate in Minneapolis for competent contract software
engineers seems to be in the $100/hr neighborhood.

If you can't come to an agreement on an hourly rate, you might try negotiating
a price for the job as a whole. If you're especially productive, you might
even come out better this way than if you had done an hourly arrangement.

~~~
lacker
If you do negotiate for the job as a whole, try to be very explicit on what is
deliverable. It's easy to get stuck in a trap where you keep adding just one
more thing and it takes forever without you getting more money.

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prakash
The factors to take into consideration are the expertise you bring to each of
these projects, other folks that can do something similar, how quickly do you
need to complete these projects, are these one-off's or is there a potential
for on-going consulting, how badly do you need the money from these gigs, how
much will you learn from these 2 gigs, can you use what you learn to market
yourself for other similar gigs, etc.?

Since you are just out of college and you have probably not negotiated
consulting rates, assign what you think is a fair hourly rate for each of
these projects and then _double_ it -- that should be the rate you could look
at charging.

Once you gather enough expertise, and can showcase clients & portfolio, double
your rates again.

good luck!

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mikeryan
Right out of college you should be looking for $30 to $50 for tech consulting.

I usually work at 2 rates depending on the project or engagement. I have a
"developer" rate where I'm looking at an every day engagement for longer than
a month. Essentially I'm guaranteed work for a considerable period of time so
I charge less.

Sometimes I get called in for one of consulting gigs, maybe just a day to a
week of training or consulting. I usually charge about 50%-100% more for these
types of gigs, this is common - you incur a lot of overhead on a gig like
this. I'm up front about this with potential clients as well, they know my
rate goes down for a longer engagement.

By the way where are you? Do you have some unique skillset?

~~~
mcargian
> By the way where are you?

This is probably the most important question. Good luck getting $30 an hour in
a small market, and you could certainly ask for more than $50 if you know what
you are doing in New York City. So where are you?

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solost
It really depends on two factors. What level of value do you offer company
that wants to work with you and what is your level of need for income?

The more value you can off and the less you need the work the more you can
charge. Generally internet marketing consultants can charge between $50 and
$200 per hour.

The more details you can provide the more specific I can be on what
competitive rates might look like.

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DarkShikari
I charge $100/hr for consulting relating to video encoding and compression.
I'm a college student, but I can get away with it because its such a great
niche (and there aren't very many of us compressionists out there who aren't
covered in dozens of NDAs and noncompete agreements...)

Ironically, I only get paid about half that for my actual coding contracts,
which quite honestly are much more work.

~~~
peregrine
What do you actually do and how do I get into a market like that?

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gruseom
Jerry Weinberg has a great statement on this: set your price so that you're
happy either way.

In other words, set it high enough that if they say yes, you feel good about
how much money you're making, and if they say no, it's a relief because you
wouldn't have wanted that deal anyway.

I found this helpful because you can answer it yourself (without any market
info, which can be hard to get sometimes) and it's optimized for making you
feel good.

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blackguardx
As a hardware consultant during college, I was able to charge $20 - $30 per
hour. Naturally more is better. If you have experience, it is easy to justify
$100.

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abalashov
It really depends on the level of specialisation involved.

I would say $125 - $150/hr is a reasonable rate, but my consulting work could
not be described as IT generalism. It also depends on your overhead, firm
size, whether there are subcontractors involved, etc, etc.

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mixmax
I do consulting every now and then, and my hourly rate is around $100, which
I'm told by clients is very fair.

I primarily do business/IT strategy, business models, etc. but also some
programming and a bit of usability.

I'm placed in Copenhagen.

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qqq
if your clients think your rate is "fair", doesn't that suggest you're
undercharging?

i would guess when a client subjectively feels your rate is "a little on the
high side" then it's probably fair. they prefer low rates.

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whatusername
There's an old story about a guy calling in a plumber to have a look at his
washing machine which he said. "It just stopped working....."

The plumber looked over the the washing machine, pulled it out fro the wall a
little, peered down the back, lifted the lid and took a peek inside then
closed it, turned it on then off then back on again then paused thinking a
little. He then proceeded to dive into his tool bag, bringing out a soft faced
rubber mallet and gave the washing machine a firm tap somewhere on it's
behind. It then proceeded to start filling with water and going through a
cycle. This all took about 8 minutes.

The bloke who called him was pleased until he got the bill. The first thing he
looked at was the figure at the bottom. $120!!!!!

$120 the man exclaimed!!!! But it only took you 8 minutes......

The plumber then gestured to the itemised part of the bill.

"Hitting part of washing machine with SF MALLET - $20" "Knowing exactly where
to hit it - $100"

============================================= Old story (and in many guises
floating around the net) but a goodie.

If you save someone $10000 with an hours work - technically if they paid you
up to $9999 then they would be better off. If you're good - then you may
always be on the low side.

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jwesley
Better yet, just become a social media consultant and charge $300 an hour to
overhype Twitter!

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ahoyhere
I charge $250 an hour for interaction design and general consulting (e.g. pure
advice), and my husband charges the same for his expertise in JavaScript.

But I'm booked solid so that must mean it's time to raise rates.

Lots of good people undercharge because they know how much they don't know.
Consequently, lots of bad people overcharge, because they are overconfident
(or simply shysters). The trick is in knowing which you are.

I follow 2 key pricing rules:

1\. Tell the potential client your hourly rate, then slap them in the face. If
they're not more shocked by the rate than the slap, you're not charging
enough. (Figuratively. Haven't slapped a client yet. Although some have
deserved it.)

2\. Remember it's about value and not about cost, just like those tire pumps
at gas stations charge you a buck or more for air -- the air compressor
doesn't cost anything like that much to run and maintain, but boy is it
economical when you consider the wear it saves you on your $150-a-pop tires.
Does an hour of your time only generate $50 of value going forward? Well,
there you go.

FWIW I am in the midst of writing a short ebook filled with advice on
consulting aimed at designers & developers, that I've developed over the past
11 years of consulting. Watch this space, kinda thing. Or if you'd like to
"beta test" it for me, email me at amy@slash7.com.

