I’ve shifted to bidding fixed rate on projects around a defined scope. It’s a lot more work upfront to define a clear statement of work, but it has allowed me to stay above USD$200/hr without customers batting an eye - whereas my rate was consistently a sticking point in negotiations.
My consulting mostly focuses around IT/digital strategy and the work product usually involves connecting together incumbent systems, and sometimes implementing new systems while ensuring they’re deeply interconnected with the rest of an organisation, aligning them closely with biz process, etc. My customer is always a business unit lead so the budget tends to be more aligned with top-line outcomes.
I've never seen a project where the customer knew what they wanted clearly enough to have a SOW with a fixed scope. The work always expands. Maybe I've been doing something wrong. How are you doing during the pandemic, which makes in-person meetings and on-site work difficult?
- Because of my focus in particular industries, I tend to start projects already having a baseline of understanding of what my customers need.
- You can write a fixed price contract that leaves room for a customer to change their mind / not know what they want. If you articulate very clearly in the SOW what you will deliver for the fixed price, then you leave yourself open to issue change orders as the scope evolves. Of course, you need to be careful how militant you are here, because issuing a change order for every minor thing won't help you get repeat business. To hedge against this, I tend to include a bucket of hours for arbitrary changes. This gives the customer some room to change their mind still without allowing them to derive and negotiate against an hourly rate.
- In my experience, fixed price allows me to 2x or more the hourly rate I would otherwise be able to charge, so if I do a bad job at writing an SOW then I have a lot of breathing room between what I'm getting paid and what I likely would have gotten paid had I billed hourly.
RE: Pandemic: I don't develop the work product on customer sites, so I'm only really there for meetings (so a lot during discovery and a lot during delivery). I've found that it's been pretty easy to migrate this to Zoom/Meet albeit with a bit more friction. It's a lot more difficult doing discovery remotely, but I find running workshops in Miro has been invaluable to ensure I'm capturing everybody's voice.
> Of course, you need to be careful how militant you are here, because issuing a change order for every minor thing won't help you get repeat business.
Yep, I also find people don't notice the changes usually go both ways as well, where it's common that some requirements change a little or get dropped in a way that makes your life easier. It's great when both sides can be reasonable and non-adversarial about it all. A deadline with a well-defined goal helps a lot too, over a rigid list of requirements.
> To hedge against this, I tend to include a bucket of hours for arbitrary changes.
Can you explain this part more? How do you explain what gets charged against the bucket of hours and how many hours for each change? At what stage do you issue change orders?
Small thing I don't hear people mention but with the SOW I always add a list of "not in scope" items too (e.g. "web app works in latest version of Chrome only" + "Internet Explorer and mobile support is out of scope"). I find this help uncover ambiguities like the client saying later "I assumed it would have worked on mobile Chrome and desktop Edge too", and makes it much easier to say "we agreed that's out of scope".
For the arbitrary changes, I mean that I will sometimes add a clause along the lines of: "Includes a maximum of _ additional hours for work not already defined as part of the Deliverables." Where the number of hours is a very small percentage of the overall project estimate.
I find it's an easy way to give the customer more budget certainty upfront and offer some level of flexibility. So as the customer asks for something out-of-scope that's small, I can just draw down the hours pool instead of debating between issuing change orders and eating the cost. And then you have some form of contractual protection saying "oh hey, your 10 tweaks took up the entire pre-agreed contingency, it's time for a change order" which is a much easier conversation to have.
> I've never seen a project where the customer knew what they wanted clearly enough to have a SOW with a fixed scope.
Not sure if you do this but that's why you really should charge for helping with the requirements gathering and solution design, it's really valuable to pin down what the problem is and know that what you're going to build will fix it properly. It also means you're not in a rush to throw out an estimate with limited information. Better for both sides.
Right, I'll usually do an initial phone consultation for free, but anything more expensive would be billed. The issue is that there is not usually a well-defined problem. There is a general goal that takes some iterations to accomplish, with the customer concocting new features and requirements as development progresses. Of course everyone says to build some padding into the schedule for that, but they think of expansion factors like 10% when it really has to be 10x.
If it really is a well defined, contained problem, they will probably go on Fiver since they don't really need any design help, which is the most useful thing I can usually supply as a consultant. Banging out code is by itself nothing special these days.
The standard advice is that you're the one coming up with the list of tasks required to achieve an agreed upon goal, and concocted features to be added are a new, additional contract.
Stick to your list, practice establishing boundaries. If you're just working on whatever their whims bring to the table on any given day and can't control the tasks and outcomes to which you've already agreed, you aren't a contractor, you're an employee without benefits.
"Banging out code" is nothing special, yet here they are knocking at your door?
In my experience, requirements gathering and obtaining project design consensus is a huge part of the value add from a consultant.
(1) You're usually better at it than they are, because they're hiring a consultant in the first place. (2) You're outside of their political network, and can thus be a more neutral, objective arbiter. Invaluable! (3) You're looking at the problem with fresh eyes, whereas they're looking at it with a history of counterparty relationships, failed or successful previous projects, etc.
Furthermore, requirements gathering and obtaining project design consensus is going to happen at some point. Better you verify that it happens as fully as possible, as early as possible, versus trusting the client that they've done it accurately and sufficiently.
Exactly. The Handyman's Invoice/$1000 Plumber joke is a positive anecdote from the standpoint of the service provider, but it's usually stated as something like "Step 1: Know your value," which is deceptively simple.
The "when to throw out an estimate" is something I've evolved on a lot in my career. Initially, naive happy path. After that, happy path + some overly-large fuzzy padding number.
Now, I push back on PMs who ask for an estimate at an unknowable point in the project.
The problem is not estimating work. The problem is estimating work volume risk (the range of work the project might take). And the only thing that can decrease that is prototyping and similar.
I work in somewhat of a sub-niche (automation), so have a larger than average number of black-box, outside-of-my-control, unchangeable components. But I've come around to believing modified spiral [0] is a better approach when risk dominates.
Sometimes, the right answer to "How long will this take?" is "It will take this long to get an answer to that question."
> Sometimes, the right answer to "How long will this take?" is "It will take this long to get an answer to that question."
Yep, or sometimes "no idea, let me work on it for a day and get back to you". You can't expect an estimate for something with many unknowns to be very accurate so best to reduce the unknowns first.
Real world projects have too many factors out of your control as well (e.g. decision making and schedules of stakeholders, combinations of software/people/requirements you've never worked with before, evolving requirements) so this idea that you can guess the total number of hours with high accuracy as you get more experienced doesn't make a lot of sense to me.
Fixed price projects are also a way of saying "we genuinely don't know how long it's going to take, but we'll take on that risk instead of you".
>It’s a lot more work upfront to define a clear statement of work, but it has allowed me to stay above USD$200/hr without customers batting an eye - whereas my rate was consistently a sticking point in negotiations.
I don't know why I'm reading this thread 15 minutes before I study the back of my eyelids for 8 hours, but the truth in this statement oddly stoped my academic pursuits dead in my tracks.
As a practical matter: If I were a full time consultant I probably would charge more, but I would also be spending some of my time making sure I had a full pipeline of gigs lined up. The fact that my marketing process is about as lean as it gets -- people send me emails from time to time -- means I don't have to cover that sort of overhead.
If I had cryptography work, I would! My strategy is to go way out of my way to make sure I don't have cryptography work to bid out. :)
The fact that you're not booked wall-to-wall while underbidding the market for the expertise you're selling to this extent should be a lesson to everyone about price competition.
You're happy! I'm not criticizing you. I'm literally just saying that your rate is a steal. It is way, way under the market. People should take you up on it.
Reading between the lines here too, but worth emphasizing "anything which particularly piques my interest" & "would also be spending some of my time making sure I had a full pipeline of gigs lined up."
Correct me if I'm wrong Colin, but I'm assuming some of the discount between max_rate and your rate is the value you see in not having to spend time on boring projects and hustling a constant stream of gigs. Aka discount for quality of life and work.
Colin and I have both spent a very long time doing this kind of work. I promise, I'm factoring in the hustle premium when I say that he's significantly under-bidding the market.
Curious question re: your personal experience, is there a relationship (direct or inverse) between max_rate and interesting work? Or are they independent?
At your level, and with your specific focus, I've no idea what the market looks like. I.e. Big Boring Corp pays best? Cutting edge startup? Or effectively random?
Yes: the higher your rate, the more interesting the work you're likely to get, because higher rates filter the most tedious clients. Routine security work from big companies gets bid through procurement departments that won't pay high rates, so if a big company is paying the market rate for cryptography work, there's a really good chance the group paying for it really knows what they're doing and why they're engaging you.
I've made significant contributions to a few areas but I wouldn't call myself a world class crypto expert. For most projects I could name a dozen experts I would consult before myself.
> ...I wouldn't call myself a world class crypto expert...
Of course not: crypto doesn't mean what you think it does, anymore ;) But hey, some blockchains do use scrypt, so that's there too. https://archive.is/jS7wJ
Seriously though, one of the most powerful tools in consulting is a deep rolodex of unique talent. You never want to be in the position of telling a client you can't help them. You should always be honest, but you should also be prepared.
Someone could probably put together a pretty nice consulting association/firm with contacts made here on HN.
As long as I get paid, I don't really mind who writes the checks. ;-)
Seriously though, I wouldn't want to give up any of the flexibility I currently have, which includes both absolute veto over customers and projects, and "best effort" availability which ranges from "reply within 5 minutes because I happened to be checking my email" to "I'm busy with the baby today while my wife plays an orchestra gig" and in the extreme case "I'm tracking down a FreeBSD bug this week; hopefully I'll get around to helping you next week".
This may be incompatible with being contracted out by an agency.
You could probably charge a good bit more. Our customers are at 14k week rate for good quality pen testing, app sec, device hacking, sec eng, red teams etc.
Edit: and I know friends at big firm with crypto services specialty and they charge a looot more. $400-$500/hr. They stay pretty busy.
I'm fairly good at crypto (not as good as Colin of course) but I think that's not of that much help in general security stuff. Pen testing = knowing all the bugs and code smells in the popular Javascript frameworks, 0 days in a zillion libraries like log4j, etc. I'm basically resigned that the modern web is bloaty buggy crap and so I haven't found it worthwhile to get too familiar with its workings. I have gotten some fairly pure crypto gigs here and there, but I think wider security, especially web security, is a much bigger and messier subject.
Exactly. I won't touch gigs like that; the closest I'll get is to make a point about "keep your system at minimalist as possible" during general security review.
Heck, I'm unlikely to even take code review gigs any more -- IIRC the last time I did one of those it was reviewing STUD before Bump released it.
The difference is the level of knowledge required. Deep vs wide. To pick a nit, too, customers use the term pen testing very broadly. So, it could just be internals and externals, could be app sec, etc. I haven’t found a ton of changes all that important in the last decade in web app testing.
The tech side was almost irrelevant. In the end it was about helping the client document good requirements.
Which you could only do after getting a good understanding of their business ops/process, and identifying the gaps and the impact to resources.
Then you put down really good requirements (which is hard), and only then use that to engineer a solution that appropriately addressed the risk (balancing cost/disruption vs. mitigated impact).
That said, often the solution is tech agnostic. I was just as happy punting final implementation to either internal teams or doing it myself (which often involved sub contracting to a specialist).
That may sound like a lot, but it often involved travel, tools, specialized coms gear, etc.
You also have to factor in insurance, taxes, and a myriad of other expenses related to running your own business.
The sweet spot for me was 45k/week, but that normally involves subcontractor payments as well.
The most common case is very early stage technology startups where most of their employees wear many hats. They usually have no legal counsel and maybe 1 or 2 developers including a CTO. They need help on everything from employment agreements, fundraising and NDAs to building the newest API endpoint or Airflow DAG.
It's a little strange at first to have someone doing very different jobs for them simultaneously, but when you're that early stage and having difficulty hiring, it's a blessing once you realize I'm highly experienced and hard-working at both.
Develop complete products of healthy complexity. Very wide range - enterprise backends, complex multimedia front ends, device control, firmware etc. etc. Located in Toronto, Canada. $100/hr or better say around $200K/year give or take as each contract is rather long term engagement. Typical would be 6-12 month first version with restricting functionality. Year for maturing. Another year support, transition to maintenance team. All in all the average duration is about 3 years.
Every once in a while do hit and run jobs. In this case the highest effective rate was $20K in 3 pure days of work. Some went to a person who got me the gig.
I was employed for 6 years at company in Toronto until 2000. The company was a consulting business oriented towards delivering complete solutions (products for clients). I saw their ad and just walked into their office. Chatted for a bit with the receptionist who'd also doubled as assistant to CEO got her interested to the point that she brought me to a CEO (company was very small by then). When they hired me, I very quickly have progressed from a developer to a lead architect. While working there I proved myself as creative solution provider and the stuff I've done impressed our clients (those included guys like Bell). All of this came at a price. I got sort of burnout and have decided to do it on my own. Since I already had a reputation and have met many people it was not long before I nailed my first deal. Somebody recommended me to a self-funded startup who knew the business had an idea for a product but had zero experience in developing. We've met. We liked each other. I hired another programmer as single me was not enough and have delivered first prototype in 3 months. The rest is history. I just kept going like this. I've had ups and downs. I gained money, I lost money but overall, I am doing ok. I also have my own products that bring me some money. If you are looking to get a job / contract I am 100% ok for a current contract so no help on that side unfortunately.
Is there anything in particular you are looking for?
Very interesting path and hit the nail on the head: It really comes down to networking and lead development to consistently find jobs (especially the ones that you want to take!).
I have recently relocated to the GTA and pretty new to working on my own as I still only have one customer which I work for remotely. Now, the space I'm in is adjacent and overlapping to the typical coder-for-hire as I am more in the hardware/embedded/product end of things for the medical device industry (At least so far). However, all of these systems need code and infra to support them so I've gotten pretty apt with that. I'm looking to maybe go after IOT, Edge computing, product development. All of this aside, I've found that networking with other freelancers who are in complimentary spheres can be great since I've passed on a few jobs to colleges and vice versa. I don't really have a basis on the TO tech scene to know where to start.
With everything opening up post lock-down maybe we should grab coffee (or hot beverage of choice)!
For those who are wondering about these professionals getting great rates for consulting/freelancing,
I've started curating high paying/quality freelance jobs from many different sources - job boards + LinkedIn + Twitter etc, filtering them and sharing the best leads with freelancers. It will be helpful if you are a freelancer or an agency. This is totally free for now and planning to release it as a service [1]
Most of these companies in this list are most likely to hire freelance developers/marketers/writers.
It's still in beta, feel free to reach out/dm me if you would like to access the full document. [2]
I did backend development (typescript, graphql, prisma) and devops (kubernetes, terraform, gcp, aws) for two years. I started at 40$/h then finished at 75$/h (100$/h for short contracts).
I honestly got burned out by context switching (which I needed to do to fill my week). And it was somewhat easy to find contracts at 75$/h (I consider I am senior level) so I would consider either charging more or billing more hours (both of which I was not good at).
I did a couple of Ruby trainings in last 6 months for $8000/day (2 total, so it was a bit more than $30k). I wrote a book (free, 400 page) about Ruby. I do it with my partner, I'm happy to pay 20% for all unrelated stuff (organizing, filling in gaps, communicating with people, etc).
Holy cow, that is great, I had no idea that trainings paid so well. I taught a Python class for free which makes me think I could do traiinings. Was there a lot of specialized stuff in your Ruby trainings? I had figured doing that type of stuff got at best normal hourly rates. Maybe I should pursue this type of thing more.
Training speaks to the truism in consulting rates -- you can only command up to the value you deliver to the customer.
With training, you're playing one of the strongest cards: delivering value to many people at the same time, where your time required scales sub-linearly with the number of people.
Consequently, the more people, the more value to the customer, the more they can realistically pay you and still get good value for their money. Win/win.
Maybe I haven't been looking at it the right way. I had figured you either had to train in a specialized area or have a slick presentation and pitch. The office probably gets a 25% productivity boost from having coffee delivered, and that boost is worth millions, but the coffee delivery person certainly can't charge proportionately to the value added. I had figured training was about the same way: in the gigs I've seen, you get paid like a classroom instructor, which is nowhere near as much as you would get as a dev. Clearly I've been looking in the wrong places. Heh.
The coffee person can't charge proportionately because coffee delivery is oversupplied with potential vendors. Look at training that way.
You're not going to make a high rate if you're "a Python instructor", because there's quite a few of those.
You will if you're "the you Python instructor", and the customer thinks you're worth that rate, because having their people trained by you is worth the premium.
And that's where testimonials, referrals, previous track record, etc. come into play. Selling that version of you to a customer.
And granted, some of them won't ever be interested in that. They just want a Python trainer at minimum cost. But if you can afford to be choose and pass on opportunities, the higher end work is out there.
Thanks, yeah, that puts it pretty well. Having packaged course materials, videos, and a bit of celebrity status has to help too. I'm glad this is working out for some people, but it's probably not the right thing for me to be pursuing since I'm pretty low profile these days.
I follow "20 + 20 + break" approach. My father used it for 30+ years (professor of physics and CS).
It means 20 minutes of theory, 20 minutes of practice, 10-minute break. It can be 25 + 25 + 5, or something along these lines. I never do more than 25. The bottom line is that people are getting bored after more than 20 minutes of theory.
Dev Manager or Tech Lead - $150/hr for longer (3+ week) engagements, $225/hr for shorter ones. Focus is generally optimizing delivery + quality, which can take the form of anything from requirements gathering processes to testing pipelines or rebuilding trust. Fully remote in Maine.
More likely to be a tech lead in those cases, or to be helping hold the project together while they are hiring a full time resource. Also in certain cases the companies are so far from ideal states that a lot of good can be done in 6 months. Overall, I agree that most times it won't make sense for a company to plan on switching dev managers or tech leads after < 6 months, but again that assumes ideal conditions or options.
I've learned that it's a terrible idea to have separate rates for friends. Do it for completely free - not even a glass of water. The beer often puts you in as much obligation as the $225.
My short term rate is $300/hr, $200/hr for longer term commitments and $500/hr + all expenses for on-site. Pre-pandemic on-site w/training was the most successful of all of these despite being the most expensive.
I did it full time for a while, these days I only do it on the side and only for projects that are worth it.
I’ve done developer relations at AWS and two unicorns, consulting rate is basically negative 10k/hour because I now meet founders for angel investing and that’s my avg check size :)
less facetiously i do wonder if i should do the proverbial patio11 move and Charge More (tm) but kinda dont want it to conflict with the day job.
14k is one consultants rate. Engagements are 2-6 weeks, 1-3 people typically. Bigger engagements happen often enough. Blended bill rate is lower with legacy customers, new customer bill rate is 14k/wk. Some discounts possible here and there, for purchasing a lot of work, allowing logo use, etc.
Working with Microsoft products Dynamics 365 for Sales + Power Apps + PowerBI. Started at 0 knowledge and 0 customers 7 years ago. Have few customers, am fully booked months ahead, quality over money, that's how I do it atm. Currently going at 90EUR/h (103USD/h). Each time I get a new major client my rate goes up 10EUR/h. That's not even a pricing strategy or anything, just how I do it, like a bonus to myself for being a cool dude.
Most projects put 12 month or greater lockups on tokens (which I'd recommend for both vesting considerations and protections for the protocol against dumping).
The standard YC advisor templates are fairly easy to translate to token-based compensation and are battle tested.
Just like advisor compensation in stock, both the protocol and the advisor should weight the advisory scope, how early the project is, and determine fair %s from there.
Cloud security reviews and audits, either by account/resource numbers which has a minimum of $500 for a single account with a reasonable number of resources or by the hour ($500) for which I have a 4 hour minimum. The small biz stuff is a breeze to audit and create reports on so I keep the lower rate available.
I also do insider threat specific IR work which is typically done on retainer and starts at $10k but averages the $15-20k mark per incident. That work is rare but time sensitive. Hours spent can be as little as 5-6 for initial triage but I usually spend about 12 in a single stretch on average with a few hours of debrief for the client. That work is exhaustive and exhausting but is rarely boring.
Yep, I'm always open to new opportunities, but to manage my own sanity and time, I keep my client list short and have a robust set of referrals if I'm already working on an incident. Almost all of the work I take is after hours and weekends as that's where my flexibility is.
I like the idea of working for a consulting firm as needed but it feels like most of those companies only want full-time commitments and I'm rather attached to my current position.
I'm a Site Reliability engineer. I help startups figure out how to deploy to the cloud. My rate is $250, though I'm wondering if I should raise it again due to inflation.
- a template proposal / sow or a link to a good starter?
- can you do this remotely? I’m far far away in terms of time zone and want to get in on remote consulting is it an option?
At some point I’m gonna have to ask these questions with my real user account and a link to my resume as I am needing extra dosh now more than my prior comments on here would suggest
Drupal/Laravel/React freelancer in Minneapolis. $125/hr or $100/hr if through a design agency. Although I get the feeling I should raise my rates again.
DevSecOps and AWS consulting, solution design and engineering. Normally around AUD $200/hr (~USD$150) but can be more for fixed rate / outcome-based projects.
Systems / Solutions engineering, specializing in fintech. 180-360 USD / hr depending on how specialized the work is. Lower sometimes if I feel like it.
My consulting mostly focuses around IT/digital strategy and the work product usually involves connecting together incumbent systems, and sometimes implementing new systems while ensuring they’re deeply interconnected with the rest of an organisation, aligning them closely with biz process, etc. My customer is always a business unit lead so the budget tends to be more aligned with top-line outcomes.