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Poll: As a freelancer, how much do you bill per hour?
334 points by llambda on Jan 3, 2012 | hide | past | web | favorite | 218 comments
How much in USD do you bill clients by the hour as a freelancer? Alternatively, if you quote a flat rate for a project, what would it breakdown to as an hourly rate?
75-99
421 points
100-124
351 points
50-74
345 points
less than 50
303 points
125-149
123 points
150-174
113 points
more than 200
88 points
175-200
53 points



Pro tip: Call yourself a Consultant instead of a Freelancer and you get to double your bill rate.

A Freelancer is a 26 year old who will design you a logo in her spare time. A Consultant is a man in his late 30s with 15 years experience and a tie. Since nobody can tell the difference via email, you get to choose which one you'd like to be viewed as.


To get double your bill rate, double your bill rate.

My sense of it is that a lot of people talking on HN about freelancing could stand to do that right now.

None of this has anything to do with what you call yourself. No two clients will give you the same answer about what differentiates a "consultant" from a "contractor" from a "freelancer".


> None of this has anything to do with what you call yourself. No two clients will give you the same answer about what differentiates a "consultant" from a "contractor" from a "freelancer".

Precisely, it's why it's up to us to figure out which relationship they're looking for and do it if we can.

A good idea is always to dress well, speak well, write well, and be pro-active/thoughtful in ways that count. That always comes across excellently in reinforcing your value no matter what you do at any rate.


> To get double your bill rate, double your bill rate.

this is Zen


So if I'm a 26 year old female freelancer, how long until I become a full fledged (male) consultant? ;)


About five years. We don't like to talk about it.


Since you are communicating via email and there is no reason to share your actual age or sex, right away.


I think you'd do better as a female consultant, women are our superiors in every way. :)

- Raised by a woman to not be a mommas boy.


I know you mean to be kind here, but putting women on a pedestal is just as much a form of sexism as declaring them beneath you.

They're just people. Treat them accordingly.

(I don't mean to imply any ill will on your part. I just thought you should know.)


Haha, I see what you're saying.

I didn't mean to put anyone on a pedestal, patronize or be kind out of charity. It's the best lesson I've learnt. I spent 10 years of my life complaining about women and consequently found nothing but women to complain about.

As soon as I realized I complained because I cared I met the one of my dreams.

She's my heart, my compass, and the sunshine keeping me where I need and want to be... even when my mighty intellect forgets to breath, feel, love, and live for a living.

So now, I compliment freely from my heart. The most important things in my life haven't been understood because of my mind, but with my heart and gut.

Hope that clarifies, didn't mean to offend anyone, only live in gratitude a bit more. It's the new year ;)


It's great that you & your wife have a happy relationship, and it's also not a problem if she's more likely to be the heart/compass/sunshine and you the mighty intellect that forgets to breathe, on balance. Though be careful, I suppose, to not assume you'll always be in these categories, or want to be in them, or not be obliged to operate outside of them.

But the main thing to watch out for is projecting that out onto "women" as a whole. It's perhaps obvious that some women are not naturally warm, or good at female-stereotypical skills, and may even be far more socially-inept-egghead than you are. And hence not exactly happy to hear "no, stay a woman (in spite of the well-known earnings gap) because we so value your feminine skills" or anything remotely resembling that.

I hope this helps a bit... I'm still figuring stuff out myself, of course, and expect to be for the rest of my life. True for everyone, I imagine, though many folks stop trying at some point.


It's interesting to see how my words can be interpreted. In the interest of avoiding interpretations of interpretations:

Love:

I don't believe in being fanatically dependant or fanatically independent. Both leave you alone and without yourself. I do, more and more appreciate the middle ground of interdependance, which in turn helps us build up the things we need to get better at.

About love "lasting": Loved and lost several times. Death, cheating, and more. Glad to have the sobering reminder and well wish, though. ;)

Love, though, is one of those few things that must be understood with the heart, not the mind. Most pain occurs when we try to understand something using our mind when we should be using our heart, or vice versa.

Relationships:

Where I've seen others succeed, a solid relationship of any kind (love, friendship, business, family) is about relating. To ones self, each other. We can only relate as deeply as we can connect. We can only deeply connect to others as deeply as we can connect to ourselves. Developing this connection is key. Developing communication, caring and most importantly learning to ask "What else could this mean?" and assume the best, instead of the worst brings people together.

The #1 barrier in the way to our own happiness and fulfillment are the barriers we need to remove within ourselves. Instead of being the cynical bastard I enjoyed being for many years, I found it worthwhile and more fulfilling to keep kindness and giving fashionable. It's not a curse that I'm wishing on women, or my fellow beings on this earth.

Approach:

Through it, while I am a worst case strategist, I don't dwell in worry. Worrying/Doubt is paying interest on money I'll never borrow. Resentment is taking poison myself and waiting for someone else to die.

Too much doubt isn't healthy. Neither is too much hope. It's good to be aware of what might be possible, worst and best case, but not to use it as an excuse to not try.

To me, it's about becoming a well rounded individual. What I learn with someone, from someone, I forever get to keep. The shortcomings in myself I get to bridge, are my rewards I get to keep. The same goes for when others randomly get something from something we say or do. Some of the best relationships are ones that are mutually, and indirectly committed to the growth of another.

My better halves:

When we, automatically assume the worst (doubt) about someone, or something, we divide.

About "female-stereotypical skills", I have no clue what you're talking about. I simply said women are men's superior in every way. How free thinking open-mindedness might choose to interpret that and stick it into a box of stereotypes is not tied to what I said or implied in anyway.

With social awkwardness, in the thousands of folks I've met in business, volunteering and life, there's far more males than females who suffer from this. Wishing someone to be open, warm, kind, giving is not a curse or a judgement, or a stereotype. It's just becoming, and being a well-rounded individual.

On the whole, females learn much more the social side of being human from the playground onwards. Women are far more socially, emotionally aware than men, regardless of their disposition.

When you've been in the trenches with both genders, you realize women truly have some gifts of intellect, emotion, and more, where they are far easier able to grasp and live by than most guys.

What's the saying, a guy will figure it out weeks later? :)


Apologies for skimming, but I didn't want to skip out on the conversation entirely....

I agree wholeheartedly about a balance between dependence and independence, and have posted on this subject before.

Stereotypes: roughly, that women are better at supporting/nurturing roles, are good with children and the infirm, are better at navigating the social world -- like knowing how to smooth ruffled feathers, etc.. Whereas men as more tone-deaf socially, but are better at raw intellectual or physical tasks -- "getting the job done". Which are the activities that, coincidentally, our culture also values more than "soft skills" (follow the money).

(Please note I am not saying these gender stereotypes are accurate or useful).

This is what I was hearing echoed in this: "She's my heart, my compass, and the sunshine keeping me where I need and want to be... even when my mighty intellect forgets to breath, feel, love, and live for a living."

See? You don't see "mighty" used to describe anything about women very often.

I hope I'm not coming across as judgmental, I'm just very wary of talking about groups in this way at all. It's not useful or factual to say that "women are men's superior in every way" -- if I were even in the business of saying which people are superior to which other people (I'm not) then I have to imagine it would be a big muddle of both genders.

We are first individuals, then we can be split up into groups by gender, origin, age... lots of factors, but we are individuals first.

So I still don't like talking about characteristics of "women" as a whole, as if they applied to all women (including specific, individual women you encounter in comment threads). It's not fair to the socially awkward, mighty-intellect women for one thing, and I don't think it's very helpful even to naturally warm and giving women either -- it praises them and limits them at the same time. If a person's gender gets credit for how wonderful they are, the individual doesn't.

It's better to praise the specific women in your life, I think. I seem to have ended up with most of my close friends being female, but that doesn't mean I like every woman I meet, or dislike every man. They're all individuals first, right? We're all better off working to avoid making assumptions based purely on something like gender, and simply dealing as much as possible with individuals.


Consultants get a bad name in my business circles so most shy away from that title. Most perceive them as someone who proposes things but does not or will not actually execute them for you.

Usually it's the consultants who hire the "freelancers" to do the work they proposed in their consulting.


Right I work in both roles, I work as a consultant for the big wall street firms, where I do technical strategy consulting. This is where I look at a potential merger or acquisition and tell the decision makes that the technology strategy of the deal looks good or it does not. It is a paperwork job and I consider it to be true consulting. On the other hand I am hired by companies to build apps, many times they only have a rough idea of what they want. I call that freelancing, I am brought it to help them get to an app in all manners that they need, advise, code, data, server setup, etc. I see freelancing as the closest to generalist. Finally sometimes I get a call in which they will say we have all the specs, the system is designed and we just need someone that knows X to turn the design into a system. To me that is contracting and it is my least favorite out of the rolls I do.


Haha, I have often called myself a resultant because of the stigma. Over time I care less as I've gotten established and built a track record.

Still, sometimes I find myself saying "I solve business needs with technology." Means what it should to the people who will sign my cheques, and I don't care to explain what I do to anyone else.

Since a consultant isn't the first thing people might assume when they look at me, I think it's important to remember it just comes down to being likable, genuine, curious, responsible, and caring enough to follow through. Respect is my currency and assholes filter themselves out.


Actually, that's pretty much what consulting actually _is_. You dish out advice, they hand in the cash. You have to tailor your advice to them but they get to decide what to do in the end.


what you call somebody in mid 40s and bald :-) But I do agree a lot of value is gained by perceived quality of service (freelancer vs. consultant) not that it implies that it is actually different quality


This is a silly advice.

Call yourself whatever you want, if the project was completed above my expectations, I'll gladly pay you whatever you asked for for the next project.


Silly, but only because it accurately describes how silly people can behave when they think they're acting rationally.


I call myself Marco and many others do as well. I like your attitude here and I'd love to hear from you when the next project calls for someone who can consult or develop an iOS application.


What I read in the GP's comment: "I'll only pay you your asking rate if you deliver well in a previous project for less than your rate".


What I read was that pay becomes less of a concern the more his expectations are exceeded.


Reminder: quote prices daily or weekly, not hourly. You're not a furniture mover.


It depends what sort of work you're doing. I've been very happy with charging $XXX/hour -- in fact, $XX.X per 6 minutes -- for occasional consulting over the past few years. I don't think it's ever been more than 5 hours at a time, and usually much less; but I don'd mind that since the consulting is something I'm doing on the side, not my primary employment.


You are making it harder to charge your true market value, by making pricing comparisons more painful (ie, scarier) for your customers. You're also begging customers to ask for your time in sub-day increments, which is unfair because you cannot generally work in sub-day increments.

It's fine to benchmark yourself in $/hr, but you should quote project rates or person/day or (even better) person/week rates.


As I said, it depends on the sort of work you're doing. I can, and do, and want to work in sub-day increments.


No it doesn't depend. This is the same mentality that charges customers in "picodollars".

How many hours a day you work has nothing to do with how many "hours a day" (ugh) you bill.

You, in particular, and an impossible consultant to find on the general market. For even the best-capitalized companies in the world, people like you do not exist. They are hiring PCI consultants from body shops to validate new cryptographic protocols. I know this, because I read the reports they give their clients before demolishing those same protocols.

I know a couple other people with the same portfolio of talent. They, too, want to work in sub-day increments. And they do. But they bill project rates, because they can.

You are billing yourself out like a graphic designer. Stop doing that. Or don't, but don't pretend like you're being clever about things for undercharging.


Interesting... you say I'm billing like a graphic designer; I think I'm billing like a lawyer.

To be clear, if someone calls me up and says "I want you to do 10 minutes of work for me", I'm going to say no. The sort of consulting I most enjoy is where I'm going to be doing 50+ hours in total, spread over many months. It's not project work; it's expert-on-call work, and if I had to quote a project rate every time someone wanted to ask me a quick question, they wouldn't ask quick questions.


A possible way to structure that business relationship is you have identifiable projects where Real Work gets done. You do the whole contract / invoice / etc song and dance for those, at project rates.

In between projects, you make it known that you are a friendly guy, and bending your ear for a few minutes is free. N.b. This is how lawyers will generally work. This is to maintain customer loyalty for the five figure engagements. Plus, since you're doing it out of the goodness of your heart, you have an instant, built-in non-excuse for unavailability.


In cases where I've been hired for an identifiable project, that's what I've done. But not all consulting fits that mould; the most interesting I've done has been in the category of "be available for random stuff we throw at you, and send us a bill at the end of each month".


I disagree, at least for my consulting business. I charge by the hour, use the Mac Desktop Timer mini-app to log time for different customers, and life is good.

One thing that I don't like is getting into situations where any one customer expects too large of a fraction of my time: I work for two reasons, making money and new experiences. Perhaps it is because I usually only work for very technically saavy customers, but I find that I learn a lot from my customers and the work that I do.

I was in a situation all last year were I was working over 25 hours a week for a childhood friend's company and although both he and some of his co-workers were wizards, there was a large opportunity cost of not being able to do much work for my other customers.

Since I work remotely and thereby compete with offshore talent I don't charge much for my time ($60/hour) so the experience that I get has a fractionally large value. That is why I don't personally like the idea of weekly or monthly billing. I understand how it might be different for people who work onsite and bill a hefty rate.


You're only competing with offshore talent if you use similar price points, customer acquisition methods, and target customers as offshore firms. I wouldn't suggest that - anybody for whom the solution set includes "Or we could get this done cheaply abroad" is likely to be a terrible customer. (They'll undervalue your contribution, because they think that houses the expensive option, and they'll disproportionately be clueless about managing software development because if they were clueful they'd run screaming.)


>anybody for whom the solution set includes "Or we could get this done cheaply abroad" is likely to be a terrible customer.

Most, if not all customers are in the software business somehow and don't know the first thing about managing software as you said.

I have a recent customer wanting me to babysit a developer in house for him. I told him I don't run daycares and he's free to setup a full development team in-house which I'll completely help with transitioning and then relieve myself.

He didn't write back.


If your job involves writing code, $60/hour is too low. The reason you're OK with charging per-hour is that you're undercharging.


I don't understand why working remotely equates to competing with offshore talent? Is it because of where you are finding your work?

Have you tried raising your rates?


I do raise my rates about once a year. I do mostly AI and text mining, and there is a lot of excellent offshore talent that I am competing with (judging from the people who I sometimes team with). All in all, getting $60/hour working remotely (I live in the mountains in Arizona, a low population area and fairly inexpensive cost of living) is about right. I get about double that rate when I travel and work onsite for US customers, but I prefer to not do that because it interferes with regular life. I also turn down over 80% of consulting offers because I usually prefer spending my time writing (I am also an author) or working on my own projects. I care much more about quality of lifestyle than money.


Totally agree.

I work almost 95% remotely for multiple clients across North America charging on the higher end of this poll. I get my work through referrals for the most part, but have learnt the art of closing a lead on twitter.


I have a general rule of not giving any one client more than 1-2 days a week, with very rare exceptions. I've found that working on multiple projects each week is good for my business (especially when projects end), good for my knowledge and experience (since it forces me to learn more and gain more skills), and even good for my clients (who can benefit from the knowledge that I'm gathering from many places.

This arrangement doesn't work under all circumstances, but on the rare occasions when I've agreed to commit myself to full-time work with a single client, I've found that it cost me on all three of these measures. It does mean that I've sometimes had to say "no" to potential clients for whom my style isn't a good fit.


Hello Reuven, you might remember me, we have traded emails in the past. Since you are (still?) in graduate school, it seems right on to work multiple smaller jobs for experiences and not get trapped in huge projects.

I have been working a long time (since early 1970s, but I have almost never worked more than 32 hours/week). While it is easy for me to say since I am financially very stable, I believe it is such a mistake to maximize financial wealth instead of experiences and general lifestyle. Real wealth is mostly family, friends, travel, etc., once one has the material essentials. Based on seeing your open source projects and writing, you may agree with me.


Hi, Mark. Yes, I definitely remember you!

I'm still (yes, still...) working on my PhD, but I'm consulting full time nowadays, and have been for a while.

I do tend to work far too many hours, but it's mostly because I'm enjoying what I'm doing, and am learning as much as I'm doing for clients. That said, I feel very fortunate that I spent a lot of time with my children, and that I have the flexibility to help my wife out and work on other things (e.g., the PhD) along with paying the mortgage and such. We've taken a 10-day family vacation to Europe for the last two summers, as well; travel can indeed be addictive!

I don't think that there's a tension between maximizing profit and family/friends. On the contrary, one of the reasons why I'm interested in the discussion here is that I'd like to make more during the hours that I do consult, so that I can work fewer hours and have more time to work on personal projects, sleep (!), and family, not necessarily in that order.


Does that get any pushback? My impression was that big companies especially are set up to pay contractors either by the hour or per-project, and don't really like alternative arrangements. The (admittedly few) people I know who try to bill by the day or week still convert it to an hourly rate for invoicing; they might verbally agree with the client on something taking "one week", but they submit an invoice for 40 hours to the client's payroll department, because those are the kinds of invoices they know how to pay.


Lots of clients want to pay per-project.

If a client demands per-hour when you've delivered a per-week quote, tell them "I don't work in hourly increments; if I spent an hour on your project in a day, I can't effectively work for any other client that day, so my minimum billable increment is a person-day". You can do that with weeks, too: "sorry, the tempo of my work is in multi-week projects, and if I work only part of a week for you, I've ruined that week for any other client".

A client that demands a statement of work broken out into hours may be pathological (bear in mind that lots of F-500 companies have idiotic time-tracking software that bills their internal people by hour, and bear in mind that every F-500 company has a "purchasing" department that exists almost entirely as a hazing ritual for outside vendors, and you probably shouldn't blame your actual customer for their purchasing department --- just don't change your terms for them.)


It might just be a bit of software-pleasing dance, but (this is secondhand information, fwiw) the usual practice for doing "weekly" work seems to be to just agree on an hourly rate and then agree that you're going to bill them 40 hours for "one week of full-time work". So saying "I'm going to work on this full-time for the next 3 weeks" translates in invoice-speak to "I'm going to send an invoice for 120 hours of work at $agreed_rate", treating "40 hours" and "1 week" as just alternate units for the same quantity, rather than sending a detailed statement that you spent 2.5 hours on Task A and 4.5 on Task B. So I guess it's effectively weekly billing in a roundabout way. (This is mostly Lockheed-type companies that I hear about, which seem to treat single-person consultants as effectively "outside employees", and only like to negotiate custom terms with giant consulting firms like KBR.)


tell them "I don't work in hourly increments; if I spent an hour on your project in a day, I can't effectively work for any other client that day, so my minimum billable increment is a person-day"

You don't need to go through that whole song and dance. Simply make your hourly rate higher than your daily rate.

Alert clients will prefer to hire you by the day every time. As for the less alert clients, if you are in a kind mood you could tip them off to the savings they'd enjoy if they hired you by the day instead.

Modify your hourly rate upwards depending on just how averse you are to working more than an hour a day even for the least alert and/or deep-pocketed clients.


This is clever, but for me, if I work an hour for a client in a day, the day is shot for any other client. My hourly would have to be 8x my daily, my 4-hourly 2x my daily, &c.

Incidentally, I'll happily work an hour for people I like (and it never bothers me when people ask). I just don't bill for it.


"if I work an hour for a client in a day, the day is shot for any other client. My hourly would have to be 8x my daily, my 4-hourly 2x my daily, &c"

If they are paying at least your daily rate, why would you mind that your day is shot for your other clients? They are, effectively, hiring you for the entire day and paying what you've determined you deserve for it.

If they are inattentive/crazy enough to actually pay you more than your daily rate for an hour (or any number of hours up to the maximum number of hours you'd work in a day anyway), then that's just pure gravy. Same for the case when it takes you less than a day to do the work you're getting paid at least your daily rate for.

In your original post, you'd said "I can't effectively work for any other client that day, so my minimum billable increment is a person-day" so in recommending the raising of your hourly rate to more than your daily rate, I was going on the assumption that your daily rate would have been sufficient for you to accept the job in the first place.

Of course, if you can't afford to work a day for your new client because of other commitments, you'll either have to refuse the job or raise your rate to the point that it is worthwhile for you after all. Perhaps that's what you were referring to when you cited the 8x daily rate.


You're probably right. I think your hourly/daily billing idea is clever.


> every F-500 company has a "purchasing" department that exists almost entirely as a hazing ritual for outside vendors,

Lol, you just put several years of my life into a clear statement. Entirely the reason I don't do enterprise stuff as much unless I'm dealing with high enough decision makers who can clear the path for me (which is not often enough)


What do you think of offering an hour block purchased in advance, then billing that block in daily/weekly increments? Provided the customer is onboard. It may not work for the worst of the worst evil AP departments but might help with the edge cases.

Vendor hazing ritual is a great analogy.


Why? I may work an 8 hour day or a 12 hour day (particularly on-site) - I would rather get paid for every hour I work.


(a) Don't work 12 hour days as a contractor.

(b) Raise your rates.


I like the consistency and simplicity of this message. I've noticed that when people have a message this simple and repeat it a lot they usually know exactly what they're talking about. tptacek is on point here.

I don't care what your reason is for charging less. I don't care if money isn't important to you. Try it. Talk less about why you charge this or that. Challenge your own assumptions and try raising your rates.


It turns out that if you quote a weekly rate clients are willing to pay more money.


This is an interesting assertion. Do you have a reference?


Were you to provide a matrix (4hr min @ $150 per, $1000/day, $4000/wk) you would also get paid for every hour you work but you would create opportunities in the client's mind where they could actually help you bill more hours.


I quote my consulting prices by the hour, and that generally works pretty well for me. However, I'm starting to think that I should indeed switch to a daily rate. When I only work half a day, then I can just charge them half of that.

Case in point: About a year ago, I started to charge on a daily basis for courses that I teach. (Previously, I had just given them my hourly billing rate, and multiplied it out by the number of hours/days in the course, plus for preparation.)

I was pleasantly surprised to discover that this simultaneously decreased pushback and haggling, while increasing the amount that I could charge for a course.


If you bill daily, you don't have to charge half when that happens.

A daily bill rate aligns your incentives with your clients. Instead of scrounging for hours to bill, you estimate how long things are going to take, and get a premium for getting things done quickly. Everybody wins.


Maybe I don't understand the idea of a daily rate.

I thought it meant that I price my time in 8-hour increments. Which means that if I have to leave early, and put in a 4-hour day, then I only charge them for half of that.

Are you saying that if I bill daily, then I can charge for a full day even when I work only half a day?

I'm all in favor of finding a formula that removes the impression that I'm trying to gouge clients, or that I'm taking advantage of the blank-check aspect of hourly billing.

Of course, at the end of the day, it all comes down to trust. Fortunately, in almost all cases, my clients learn that they can trust me to be aligned with their business interests, and that I'd rather help them to succeed than find new ways to charge them without working. However, if there's a way for me to profit more while simultaneously increasing their trust (or reducing the time it takes to build such trust), then I'm all in favor.


Your interests are not aligned with your clients when you bill hourly. It is in your interests to work slowly, spreading the work over as many hours as possible. It is against your interests to invest in time-saving techniques and tools, because they will ultimately reduce your take-home pay.

What you do is, quote your client an estimated time to completion for your project in (in order of preference) weeks, days, (or only if required) hours. You have a minimum increment, which could be a week, or could be a day, but shouldn't be an hour.

Then you get the work done as quickly as possible and charge your client using that minimum increment.


First of all, I do genuinely try to use the fastest and best techniques that I can. Maybe I'm subconsciously doing things slowly, or not using the best techniques I can, but I do think that I try to do the best and fastest job that I can. My interest is in pleasing clients and doing new and interesting things. Taking a long time on one problem is bad on both fronts.

But yes, I can very easily see how someone could take advantage of hourly billing.

As for how weekly billing works, I'm afraid that I didn't understand your example. It sounds like I estimate a project as taking two weeks (i.e., 10 days). One week into the project, it looks like it'll take one more week than I originally expected (i.e., a total of three weeks). So I tell the client that it'll now cost them for three weeks of my time. Did I understand you right? And if so, how is this a win?


This isn't complicated.

You do a proposal for a client. You give an honest conservative estimate of how much time it's going to take.

Say it's a Rails CRUD app with no special domain code. Ok, 2 weeks, broken out into 2 billable weeks. The proposal says something like:

   Week 1: 5 person/days, $5,000 (Setup, Discovery, Backend)
   Week 2: 5 person/days, $5,000 (Front-end, testing, delivery)
   TOTAL PRICE: $10,000
Accompanying your proposal is a SOW that says something to the effect of:

This project will be billed on a time/materials basis, starting Monday January 23rd and continuing for 10 contiguous business days through February 3rd. If additional time is required to complete this project, it will be billed at a rate of $1,000 per person day, provided that notice is provided within 1 week of February 3rd.

Presto, a proposal for a project that costs $10,000 billed time/materials at $1k/day (again, lowball figs).

Now, 2 weeks to complete this project is conservative. Also built into every proposal, whether you like it or not, is the collection of moments in every working day where you are not productive. So ask yourself, if I took 100 provigils† and eliminated ALL NON PRODUCTIVE TIME from my schedule for the entire next 2 weeks and completed this project in 7 days instead of 10, who should get that $3,000 of value I just generated?

The answer to that question is "you".

You don't generally want to rig your contracts so that they are padded out with unproductive time the client pays for; that's called "rustproofing" and it's bad business. But at the same time, clients actually value determinism more than they value any single billable day. If the client accepts a project for $10,000, they are going to be way more irritated if the project takes 15 days to finish than they are if you finish in 9 days instead of 10.

You have knobs to turn here too. Say you finish in 9 days instead of 10 because you drug yourself into working 18 hour days. Keep the $1,000. Say instead you finish in 5 days instead of 10 because the project turns out to be way simpler than you expected. Well, in that case, give the client their $5,000 billable week back. Think of this in terms of a minimum billable increment, where you don't credit partial weeks --- if you had to work at all in that week, that week is shot for other clients --- but will credit full weeks.

You see now how it's maybe not in your best interests to have your minimum billable increment be "one hour"?

Please don't do drugs.


OK, I gotta say that after many years of consulting, this is the first truly new, clever billing technique that I've seen. Better yet, it's a win for all sides.

This comes closer to per-project pricing from the client's perspective, which they prefer because they want to know how much they're paying. (As you put it, "deterministic pricing.")

I tend to time-slice my weeks, so I don't think that it would work for me. But it might well work for the people who work for me, who do tend to work complete weeks on projects.

I do have to wonder how Israeli companies would react to this sort of thing. My guess is that they'll do the math, and then complain about the high hourly rate.

But the only way to find out is to try, and you've definitely inspired me to give this system a whirl. Thanks so much for sharing.


This can still be broken down into an hourly rate even if you present it to the client as a daily or weekly rate.


It's a perfectly fine way of benchmarking. I'm not complaining, just reminding.


Can you get better rates that way? How does it work?

We are currently using hourly rates (around 100€/hour (130$/hr)). Rate is quite reasonable for our expertise level in our area. However, I have noticed that it scares smaller customers away.

I honestly don't know which one would be better approach: crude week estimates and price tag of 4000€/week/person, or detailed hourly estimates and 100€/hour/persons. Of course value based rates would be best, but not really possible in most of the iOS projects that we do.


If the clients you're dealing with are scared by person/day rates, stop working with them. This is an observation Patrick Mckenzie has made here perhaps 100 times: as you raise your prices, the quality of your customers improves, often dramatically. Charge peanuts, work for monkeys.


I've raised my rates in the past, and it has both helped business and improved the quality of my clients, no doubt.

But in Israel, I've found that anything over $100/hour scares off everyone, including the very largest potential clients. They're used to paying $60/hour for top brass at a consulting firm, which makes it difficult to convince them that my higher rates are worthwhile.

I'm not saying that convincing them is impossible; I've made a living in this way for 15 years now, helped in part by my willingness to negotiate and discount my rates in exchange for long-term agreements. But whereas the US and Europe might have large, wealthy companies with technical needs who don't flinch at $150/hour or even $200/hour, such rates would get you tossed out on your ear in Israel.

That said, I haven't tried charging by the day, and will give it a shot at the next opportunity. I'm very curious to see what happens then.


If the clients you're dealing with are scared by person/day rates, stop working with them

I agree, there are no other industries where a professional will take on the business risk of another party with the exception of legal, and when they do they expect 30% of the case winnings. But for the vast majority of legal they charge for every hour worked. There is no reason for freelancers to work on a project compensation basis, they are shouldering unnecessary risk, that is usually due to the client not understanding development. Per project pricing immediately sets the freelancer up to have to defend against every change that inevitably comes in. Unless it is routine work, I rarely take on custom development work as anything other than an hourly arrangement.


What you're talking about isn't "hourly" versus "project", it's "time and materials" versus "project". You can bill in person/week increments on a time/materials basis, and in fact that's what you should do. You can write a consulting proposal that reads identically to a project-based contract, break out your pricing in person/weeks, and then write a time/materials SOW with a "additional time will be billed in person/day increments at the rate specified in this contract" clause.

Be careful; project risk and your billing increment are orthogonal concerns.


Right sorry if I my writing seemed to imply differently, I was definitely talking about time and materials vs project. I was just adding cometary to the discussion and not trying to refute a position, I apologize if my wording did not convey that. what I was trying to say was if a person is scared of by a day rate, because they want a total rate then I tend to shy away from those projects. I will provide an estimate of what I think it will take, but there is an understanding that due to the nature of software development that estimate will change the first time they change their mind. Which always happens in software development.


Understood.

But what's the reasoning behind giving weekly prices, why does it result in better rates? I'm sincerely curious about this.


A $1 discount is 1% of a $100/hr bill rate.

A $1 discount is ~0.1% of an $800/day bill rate.

A $1 discount is ~0.025% of a $4000/week bill rate.

A $1 discount is ~0.001% of an $8000 project.

In what increment do you want to negotiate your rate? In full percentage points, or in hundredths of a percent?

And what figures do you want to be negotiating in: amounts that are low enough that your client can immediately get their heads around, like $100 vs. $150, or the real amounts their company will pay in the end, like $8000 vs. $7900, where an individual person at the company is less likely to feel like they should have a strong opinion?

Remember this: your clients are not paying you with their own money. It is monopoly money to them. It comes out of a budget, not their own pockets.

(To say nothing of the fact that when you bill hourly, you give your clients tacit permission to ask for your time in hourly increments).


Aahaa. Thanks, I hadn't really thought about it from negotiation perspective. So far, it's been a negotiation of scope: a client have set budget and we negotiate scope down to do it in budget. I'm probably not good enough negotiator/seller yet to get to the price negotiation phase: so far it's been that either client goes immediately away or we end up negotiating on scope.


This is the most convincing argument you've made yet (and you've made several good ones). I've definitely had clients say to me, "It's not my money," when talking about billing.


I've found with small customers to begin with a small, fixed price project. Show them the world and experience of their dreams.

Working with smaller customers does often mean a more limited budget so you can help them focus on getting the best bang for the buck. Help the customer grow and they'll have more money to spend with you.

The thing you can do with small businesses is pick the winning horses and bet on them. Find the owners that 'get it' while small and help them grow. This might be 1 in every 7-15 customers.

I have a customer I did at $5K project for a complete workflow management. It was a favor to a ex-vp of a company who had opened up his own business. Originally they wanted me to fix PHP bugs for that much but I just rewrote the thing in a few weeks. At the end I realized it was easily 3 or 4 times the cost and I made sure they knew this was it. I resumed my normal billing rate (they had no problems with it) after a problemless launch. They had been trying to build the same system for almost 2 years with someone else and were pretty happy.

4 years later they don't have a budget for me: as in, they spend whatever they want because they've at least added 20,000 sales/customers to their system. While this didn't happen because of my software alone, (they had an excellent manual paper system), helping automate their systemization sure helped them take off.

Do this kind of work not as your primary but maybe 20-30% of your time. It can really be enjoyable to help a good small company grow.


> You're not a furniture mover.

No, I'm a professional, and I expect to be compensated appropriately for my time and effort, just like the lawyers and accountants and other professionals I pay in turn.

I don't understand your unwillingness to accept this way of working. You seem to assume that it will result in a lower total income. I have encountered no evidence that this is how real life works. Maybe it's how the game is played in your particular field and/or your particular location, but it's certainly not universal.

Also, like some others posting here, I do value the ability to work on multiple projects simultaneously. I don't want to commit an entire week of work to a single client on a single project, if that is neither interesting for me nor providing good value to the client.

Also also, I like not being expected to stick around free of charge for another two hours after an 8-hour meeting 100 miles from home because my client wants a quick chat. Indeed, if my clients need me to attend a meeting 100 miles from home, I'll be happy to do so, but they're paying my full consulting rate for the travel time as well. When you're working on a day rate, particularly a relatively high one, it's funny how often your days start to become more like two of my days.


I don't "not accept your way of working" so much as "rue the fact that your way of working sets yourself up to get paid way less".

None of the rest of what you said has anything to do with hourly versus daily billing.


But why do you assume that I am "setting myself up to get paid way less"? As I said, I have no evidence to suggest that I would command a significantly higher rate on a daily or weekly basis than I do now. However, not taking on any gigs that aren't really full time (but can be combined at my discretion with others that also aren't) would certainly have cost me money in the past.

I can see the argument for fixed price vs. T&M billing. I guess I just don't see why going as far as daily/weekly billing doesn't net a significant part of the downside (no hard limit on hours vs. compensation, no clear cut-off where clients have no claim on any work I do other than for their project) without necessarily netting much upside.

As I said, perhaps that's the way the game happens to be played in whatever markets you've been working in. I'm certainly not saying you're wrong about your own situation. I'm just suggesting that your comments here are black-and-white but don't necessarily apply to everyone else's situations as well.


You may be 100% correct, but have you ever experimented with his advice? Don't think you're right. Try it. Experiment and know what works best.


I couldn't experiment with his advice with my current business model. Working on a longer time interval (daily, weekly) when you want to deal with multiple clients during a single interval is a recipe for unhappy clients and potentially legal fees.

If I am billing weekly, but in practice I do 2.5 days of work for each of two clients, do I bill both for the entire week? Most of Thomas's arguments for rounding up in these longer increments on the basis of opportunity cost demonstrably don't apply in this context, because clearly I can use the other time to work for another client. The best outcome I see if someone I'm working for finds out is that I have an unhappy client and probably lose the contract -- which is fair enough, frankly, if I'm billing for a week but only actually working for them for half of that time.

For the avoidance of doubt, I'm not arguing against having a reasonable minimum billing period so clients don't mess you around and so you can manage your time sensibly. I'm just challenging the notion that "hourly" is not a reasonable period for some of us, and pointing out that "daily" or "weekly" can have serious drawbacks too.


Agree. It's easier to pass along a large price when removing a unit of measure so people evaluate the total value to what they are receiving.

For example if you say to me that you charge $500 per hour for three hours of work to secure my system that sounds expensive. But if you say the charge is a total of $2000 to secure my system then I am evaluating if $2000 seems reasonable without regard to what you are charging per hour.


My hourly rate is usually higher than my daily rate, in this way most of my clients tend to hire me for the whole day. But it depends on the type of job I guess.


Side note. I've seen attorneys price trial work at either a full day or half day which in many cases works out to more than their hourly rate multiplied. I've decided this is because they can't overcharge you since you know how many hours they are working. (4 hours in court is 4 hours. But 4 hours in the office is not always 4 hours.)


Lawyers are a special case. They bill in hours, because there is a near-universal cultural expensive that lawyers are hellaciously expensive. Within their firms, lawyers are managed so as to maximize their billed hours. No lawyer would ever, ever work a 12 hour day for a client and have their final bill not reflect those hours.

If you can bill $350-$450/hr in groups of 40-80 hours at a time without blinking, please disregard my advice.


They do this because it prices out the uncertainty.

If you don't know whether you'll be in court for 3 hours or all day, you need to charge for a full day. Otherwise, if you estimated 3 hours in court and then back to the office to bill someone else for the next 5, but instead you're stuck waiting for the judge for 6 hours, someone has to make up the difference.

Simplest solution is to just always charge for the full day.


this is true. you can't copy and paste furniture


Don't shop at Ikea much huh?


lolz


Know and learn the difference between these three words:

Freelancer, Contractor, Consultant.

Each has it's own mindset. I wish I knew it when I started 12 years ago full time. When a customer asks something, they're asking for one of these three relationships.

When we get upset customers aren't listening, it's often a disconnect of which relationship the customer wants, and what you are offering. It's helpful to know which role you're being asked to play (and be paid for).

FREELANCER - Someone who you use from time to time to do a part of what you need. Directions provided. Generally freelancers work more part time than full time.

Typcially with freelancers you have to give notice on the order of 1-2 weeks.

CONTRACTOR - A regular expert who you provide detailed work instructions to. Customer cares more about your opinion but the strategy is still set by them.

If I'm asked for a design that leads to work, it's a quote. Typically the customer knows what they want, how they want it, or why, I'm just a hired gun.

Typically with freelancers you have to give notice for work from 0-7 days based on your arrangement.

CONSULTANT - A dedicated expert who is asked for their opinion of the best strategy to take, as well as delivering on it. Consultants can be part time, but most are full time. If all I'm being asked for is my professional opinion (and no ensuing work) I bill for that time.

Consultants are needed when you need expertise around at the drop of a hat to tend to things, or an ongoing basis to develop/manage/direct/drive internal business processes and hand them back in-house once management would like so you can focus on the next thing for them.

Customers who use consultants properly know it's not what it costs them, but what consultants save, or make them. Sadly, this type of relationship can often be perverted by consultants as well and I inherit people who have been burnt.

Me: I spent my 20's getting 20 years of experience in 10. That makes me about 40+ work wise, in my 30's. Consulting is heroin once you become capable at delivering value.

I am moving out of hourly/daily based consulting and moving to value based consulting, and entirely out of consulting as reasonably possible. If I do something that saves a customer $3,000/3 years forever, I ask for 20-30% of it regardless of whether it takes 5 minutes or hours.

I spent 15-20 man years working to learn how to do something in 5 minutes that will take someone 5 hours, if the customer is willing to pay for my 5 years to learn to do it in 5 minutes, I will bill them for 5 years, and then for 5 minutes.

I love learning and seeing this from different perspectives, let me know what you think too!


I'd like to mention that even as an employee, focusing on and emphasizing value makes it a lot easier to get paid more than focusing on cost/hours.

Example: a company I worked at spent about 2 years trying to get a project off the ground. It would involve hiring a bunch of consultants for $1.2MM, not to mention all the senior management time that was involved in approvals, spec interviews, etc.

6 months after I got there, they still hadn't managed to even get the project started. I spent a few days asking around to find out what the company actually wanted to achieve with this project. I then spent 2 hours implementing something that gave them the exact result they were looking for.

When negotiating a raise, do you think I mentioned how I spent a week building an Excel Pivot Table? Or do you think I talked about how I saved the company at least 2 million dollars and successfully completed a project that they'd been trying to start for nearly 2 years in under 3 months? (In reality, under a week-but I didn't want to make it sound too easy).

And that's how I became the youngest Sr. Analyst at the company before I left :)


We're working on a value based model for our consulting firm (hint - it only works for people who are actually good at what they do). The problem is how you calculate the savings/benefit. In many cases what you deliver isn't driving savings, but is a necessity for the business to operate. In the past my company has done a few contracts where they were awarded bonuses if our consultants adhered to the values of the company they were contracted to. But then again, you're trying to quantify a qualitative aspect of delivery.

Not easy to do, and Finance/Procurement doesn't like it.

Disclaimer - I work in large enterprises. YMMV


You, absolutely, nailed it.

The benefit with the value based model is you need to know your stuff to price it right for everyone. It's easy to consult a client once, hard to do it over and over. You're only as good as your last few projects and the best you can do in business is win some favor, loyalty rarely exists. Most of my clients have been with me for 4-10 years. They do my intros and referrals.

Pricing wise, sometimes when I'm asked to do something, I find out how long the task is taking an employee right now. Other times I come across a waste myself. Employees are quick to tell you their biggest mundane pains.

I estimate how many hours per week/year it takes, estimate their percentage of yearly salary towards, cut it down by 20% and use that as my value estimate on what to base it off.

It's realy compelling when you can walk in with a conservative cost of $X,000 a year for a particular task in a department and offer to get rid of it forever for 20-30% of it. It takes writing up a business case, having managers and employees sign off on it, and the trust and a track record to get it done. The customers that I've earned the trust of typically just tell me now to make sure I have a business case signed off on file and quit wasting the management's time with approval, and just report what I got done.

Screw that up once, and I'm toast. Keep it right, and it's good for everyone. Kind of like hiring a Lawyer and Accountant to get the details right. Would you lose your mind if your lawyer or accountant forgot a detail on your mortgage or accounting? Probably not. I just try to remember that's how much I'm being counted on and it definitely can have it's ups and downs.

I have worked Small up to medium enterprise (low billions) and nothing makes them happier when you can talk their language -- getting more done with the same staff.

My heart, though, is in SMB, there's nothing quite like it.


Great post, j45. My experience too.

You sound like someone who others may want to follow up with off-line. Please put some contact info in your profile. (Hint: the "email" field in your Hacker News profile is invisible. You also have to put it (in some form) in the "about".)


Thanks for the kind words Ed.

I recently discovered the collection of your posts and find myself nodding like a bobble-head. The like-mindedness on HN is a great feeling to be a part of and contributing to after lurking for far too long.

I have added publicly viewable contact info to my profile. Slowly but surely learning how things work around here. :)


SMB?



SMB definitely means Small/Medium business as mbesto already clarified.

Sorry, for all the writing I did I totally should have not used any acronyms, lame of me. :)


I'm not sure if I agree with your terminology; I call myself a consultant, and have been doing it full-time for more than 15 years.

However, I'm mostly intrigued by the idea of value-based consulting. I've spoken with colleagues about it in the past, and the concept makes sense to me, and is much more attractive than billing out by the hour or day. But it's not at all obvious to me how I would price, in a value-based way, the work that I do for my clients.

It seems to me that some jobs are more appropriate for value-based pricing than others, but if people could give some examples of how it works, that would be really helpful.


This is a large topic, but I can recommend the book Million Dollar Consulting by Alan Weiss as a good starting point.

More immediately, you might ask whoever is buying your services for some insight into how your tasks fit into their business goals and the ROI they expect to get from the $ they spend on you. Someone at their org should have this. If not, you get to help them develop such a model which will likely be favorable to you.

Note that you will have to work with the business side to make value-based pricing work at all.


A few books that helped me keep my soul and be productive in consulting:

Crack my head open for re-flashing

- An open heart - Dalai Lama

- Love is the Killer App - Tim Sanders

- The Man who mistook his Job for a life

Consulting:

- High Impact Consulting - This book taught me to only do tiny but really painful items for new customers to build momentum. By getting short term, high impact/pain point items out of the way, it clears the table to say "This consultant has learnt my business and why we do things the way we do". Big projects land themselves. I call it dating before I get married.


+1 for the dating before getting married metaphor


If we're wanting to call the categories something else I can respect and probably agree with that.

All I know is most people start as freelancers, become contractors (more focused in an area), lead into consultants (enough focused experience to give advice and oversee it).

I've included one way I value based price above. It's simple, makes sense for everyone, and is measurable.


Thank you counteracting the notion that "ideas are worthless, execution is all that matters"

.. it takes a lot of time and experience to know the ideas that should be executed (and how), and if you can be rewarded for that, then all the better.

To run is easy, but to run and obtain health and not illness is the key.


Agreed. From what I've learnt (so far)...

Knowing which ideas to execute, when is the key.

Knowledge isn't power, acting on that knowledge is.

Similarily, Ideas are worthless without education.

There's a funny email I saw once about a consultant finding a faulty gauge amongst hundreds in a nuclear plant or something. He charged $10,000 for finding the bad gauge. Customer got outraged. So he modified the invoice. Fixing the gauge - $1, Knowing which gauge to fix, $9,999.

The flip side of this is when knowledgeable consultants don't get things done quickly. If you're going to hire someone at $5 overseas for 1000 hours, why not just pay someone more capable $5000 locally to get it done in a month (160 hours)?


http://www.snopes.com/business/genius/where.asp The point is a good one though.


Skimming through the comments here it seems a lot of you work the corporate area of things in the contractor and consultant roles.

I'm curious how many people are like me and handle home users and small businesses in the freelancer role.

Basic break/fix situations, software and hardware maintenance, and navigating the minefield that is consumer level equipment.


I started entirely where you were. It was the only skill I really had that people were willing to pay for. I could diagnose, fix and permanently repair/prevent future issues, whether it was software, hardware, networking, IT support/consulting, fixing viruses. Back then the tools weren't so good, though.

One of the big 'aha' moments I had was when I didn't have to bill my customer minimum 1 hour to drive to their site if they were in town. I offered to bill in quarter hour increments if I could try addressing it remotely, and if it didn't work, I'd come in. Having the keys to everyones offices is something I didn't enjoy, remote access made it a bit easier.

The other key 'ahas' that helped me transition from IT work to more software work were:

- Work to always replace myself. Most IT / developer types are of two categories. The ones that make you dependant on them, and the ones that make you independent. The consultants that charge you to do windows patches every month on purpose do it because that's often the ceiling of their talent. The consultants that are bored to tears by doing windows patches but do it to get other work with the customer often automate it to a point that they can say "spend the money you would on patching on other projects with me instead and I will always automate IT as much as possible".

- Solid Email based Case manager - This is the only piece of software that changed my life. One item per case number, tie it to a billing system. If you do go this route, make sure you use a solid email based case manager like Fogbugz (or anything) that is well suited to keeping your work visible in their inbox since they don't see your face much. For me, Fogbugz found me when I juggled too many things manually and I've been loyal since. There are several other capable tools too, find which one speaks to you the best.

The toolsets for managing things centrally (remote access, antivirus, firewalls) are so much more polished and integrated, if you can get your business doing remote IT support/maintenance, there is a good business there.

If this is a field you enjoy and want to continue growing, feel free to hit me up, I'll totally give you everything I've ever learnt or known about this so you can scale up to a .5-1 million/year revenue business pretty easily.


Out of curiosity, what is your niche/area of expertise?


Short of it:

I don't have just one because I was all over the place until the last few years.

Long of it:

I've worked in tech sales, hardware, networking, repair, warranty, manufacturing, and software development, spending at least a few very focused years in each since the mid 90's. Some things, like web apps, I've been doing since the mid/late 90's.

My niche/expertise is learning why someone does something a certain way and make sure the software amplifies that competitive advantage. Otherwise I go about learning the business/need to find "how it should be."

Being able to understand and connect the dots from top to bottom is my drug.

The only title/position I've found some lasting comfort with is System Architect/Integrator.

I'm now in custom software development and transitioning into my own products.

I'm converting my consulting practice into into an automated business that lets my team be well paid for self-managing, and only uses me where I add value (customers hire our attention to detail, rarely our talents beyond that).

I want to be free to find the next great startup adventure I'll be a part of, but don't want to dishonor the customers that have supported me to learn what I have about myself and where I want to go in my life.


Great stuff. When you say "freelancer" do you include contracts for BigCorps? Obtained through Recruiter'du'jour?


Without more context this poll is kind of meaningless. Are you editing up a wordpress site for a pizza shop or overseeing the setup of the intranet for a fortune 500 company?


That's an important point. I've done small projects where the total budget was less than $1000, the billing rate per hour was also small, and larger projects for which we billed more than that for a single day of work.


I charge 115 € per hour ex VAT (or roughly 900 € per day of 8 hours). I do mostly remote work (ruby, rails, etl, agile project management, sysadmin, devops, css/js, technical/org coaching).

If a client can give me visibility and ensure eg: 10 days per month for some months in a row, then I provide a discount on that rate.

I never do fixed-price projects and instead, provide best-effort estimates and bill by the hour.


I never do fixed-price projects and instead, provide best-effort estimates and bill by the hour.

So far this is the best advice I have seen in this thread. So +1 :)

I used to give fixed-price quotes and it burns you more often than not.


Thanks :)

One way to put it is (and how I explained it to a client once): if you do fixed price and estimate 100, but end up having 120 of work, then you'd need to quote 140 (40 padding) to the next project estimated at 100, just to make up for your previous loss. In the end the uncertainty costs everyone.

For people willing to find how to do better estimate, I can warmly recommend following Mike Cohn training:

http://www.mountaingoatsoftware.com/agile-estimating-plannin...

(and related books), as well as acunote which I use to estimate, plan and manage my projects:

http://www.acunote.com


I do something similar, in the middle of a fixed price and a best guess estimate (I can go back for an increase of hours).

The key to either is being accurate at estimating, which in turn means being able to find the number and size of potential unknowns/gotchas in an estimate.

Get good at that and it's a lot easier, especially on projects you have built from scratch, which lend themselves a lot better to fixed-price quotes.


Agreed. I can't remember the last fixed-price project I did in which the client and I were both satisfied.


funny, its almost exactly what we do. we price 110€/h remote, 140€/hour onsite and we only do time and material.

After working in this space for many years this is still a problem to 'sell' to many customers in our space (entrepreneurs (especially 1st time) and startups building web applications). Many people still think in terms of "how much this project will cost with this exact but not-really specified feature-set and deadlines".

There is this expectation for a consultant to assume the business and development risks.

Recently I think I found the explanation that seems to 'click'. When a client comes to us their primary problem is not having sufficient in-house r&d capacity and thats the exact problem that we can solve.

If they had the in-house r&d capable of delivering the project most wouldn't be looking for any outside help.

But with the in-house team no business risks would go away, scope and budget would still have to be tightly managed.

The fact that instead of the internal r&d team an outside company is handling the development will not somehow magically remove the risks from the picture.

and the fact that client would happily use in-house team means that removing those risks was never the real need.


We structure our projects fixed-time fixed-cost, works well for us.


I bill $60/hr. When I start to reach capacity, I multiple my rates by 1.5 for all new clients. I can see myself starting to bill out at $90/hr by June, 2012.

An interesting follow-up question for the freelance community could be how many of us employee freelances beneath us.

I've added a freelance copywriter and designer to my team and it's a joy to be able to work with and support another freelancer as they develop their practice. It's also a joy to have some of the capacity problems resolved by the addition of another set of hands. (:


What do you do? $60/hr sounds low for Rails, iOS, Python, or serious database work.

If you can see yourself billing out $90/hr in June, 2012, why not try this experiment: bill yourself out at $90/hr (actually, $720/day, please) in January. See what happens.

If there is one thing HN people get wrong about consulting, it is that they relentlessly undercharge. It's easy to see why: the stuff they do seems easy to them. It's not easy. There is a worldwide shortage of real, viable talent. Companies are falling over themselves to attract and retain dev talent. The stuff you are doing is not cheap.

If you are billing at a rate that matches what a good full-time Google employee makes, you are wildly undercharging; freelancing is expensive (you are responsible for all your own taxes and your own benefits, and for providing a cushion for yourself for dry spells) and the service you provide (flexible, on-demand work without bringing a full-timer on) is extremely valuable.

CHARGE MORE.


Oh, quick sidenote: you'll find that people are arbitrarily consistent around particular price points. $720 is a bit weird for a day rate, so just bump it to $800, since you'll have exactly the same resistance to $800 as you would to $720. Oh, BTW, you'll have exactly the same resistance to $1,000 as you will to $800. (Not much, incidentally, from good clients.)

There, you just more than doubled your income and your customers will not perceive you as being more expensive. (I know I know I know trust me on this. If they were mental math experts then they would be programmers and you would have money.)


"There is a worldwide shortage of real, viable talent. Companies are falling over themselves to attract and retain dev talent."

I have to say I find that hard to believe.

Now, to be fair I don't actually know if I am talented or not. It is impossible to accurately judge oneself, though I like to think I am. I've had the opportunity to play lead on some pretty big and successful projects for some major businesses using many of the technologies that are said to be hot right now. A present co-worker said something to me along the lines of "I have worked with a lot of programmers, and you are by far the best of them" and it seemed genuine. Take from that what you will.

Anyway, I've entertained the idea of working with some other organizations. Some have not been interested in me at all, and the rest were no longer interested after a short chat. Nobody has been interested in seeing the actual quality of my work. I'll accept that I just don't have that talent, but given the above, it seems to me that it is really just my marketing skills that are lacking – Which makes sense; I spent my spare time becoming a better programmer, not becoming a better marketer.

Given that, I remain skeptical of the talent shortages. How much comes down to companies just having no clue about how to hire people?


I'm sure you're great, but I've been hiring people nonstop for almost a year now, and networking with people who are also hiring, and the fact is: it's a tight market for dev talent.

Is the market efficient? I'm sure not.


But if you are passing over good talent because of external reasons (such as poor marketing skills), is it fair to say there is a technical talent shortage? The talent is there, you're just not interested in using it.

And it is completely fair for a business to seek a well rounded person. If you want someone who is good at marketing and development, you are more than welcome to look for that. You are under no obligation to hire anyone less. But it is not the technical talent that is tight.

Anyway, hopefully I don't come off as sounding bitter or something. I have an amazing job already and respect anyone who feels I am not a good fit for their organization. I just have to wonder if the shortage of talent is real, or if companies are passing over real talent for other reasons unrelated to the lack of skill in technology.


It's not a tight market for dev talent at all. There are so many programmers out there and not nearly enough positions. Those that do exist now will be rapidly drying up due to industry slowdown and consolidation.


... in Outer Zambonia.


No, in the Bay Area. There are tons of programmers here who can't find jobs. There simply aren't enough positions available for even talented programmers to find work.


If they are talented, tell them to email me (my first name at identified dot com). We're trying to grow our dev team rapidly at Identified, but we're limited by the number of good developers we can find. If they're good, we'll hire them.

Edited to add: We're located in the SOMA district of San Francisco.


This is of course counter to everything everyone else ever says about the job market in the Bay Area.

Edit: not to say you're necessarily wrong btw, just that there may be a higher standard for "talented" out there. Local maxima and all that.


Do you currently need a good remote Node.js/MongoDB developer? (That's my current preference. I do everything except Ruby/Perl/.NET. Sizable experience with AWS, App Engine, Linux admin, SQL, you name it.)


Which makes sense; I spent my spare time becoming a better programmer, not becoming a better marketer.

Good. You need to be a problem solver, not a programmer. You need to listen to your customers and find solutions. That's how you show up the value you make.


I agree with you entirely. However, that is not a deficiency in a technical skill. You cannot really say there is a shortage in technical skills while at the same time passing over technical people because you find them lacking in non-technical areas.


If you can't make use of your technical skill (solve the problem) you definitively don't have it. That's why you need to be a problem solver in the first place.


I'm not sure I agree with that.

I farm as a hobby, so I see lots of unique problems. In typical programming jobs you're just stringing together the work of others. There's lots of book learning to do, but not much actual problem solving.

There are people solving real problems, but those kinds of jobs are fairly rare, and often not very well paying when done in academia. Implementing working implementations based on those already found solutions are where the jobs are.


Listen to this!!!

I need to remind myself of it more often than not, but it was once again driven home to me last week. A new (prospective) client wanted something (an electronic design) so trivial I couldn't believe he was even asking. But the point was that it represented real value to him (read: stuff he can resell for lots of $$$) for me to connect two simple parts together with a bit of wire.


Suppose you make $100k as a salaried developer, which works out to about $50/hr. What would be an appropriate, approximately equivalent rate to charge as a consultant?

Edit: For an American at least. I guess what I am more curious about is, what is the overhead for things like taxes, decent health care coverage, and insurance against dry spells?


You should end up grossing 30%-50% higher than FTE, because your cost structure is worse:

* You own both halves of payroll tax

* You're out probably $500/mo in benefits

* You have no paid vacations or sick days

* You need to smooth out income for dry months

On top of that, contractors offer companies a huge benefit: getting work done on (relatively) short notice (plan-hire-rampup for an FTE can take 6-9 months) with no commitment (you can't hire an FTE to build a simple CRUD app and fire them when they're done). Your prices should reflect not only the (probably superior) technical acumen you offer, but also the structural benefit of working with contractors and not FTEs.

Long story short, you should be making MUCH more --- on a "per project, projecting the rate over an entire year" basis --- as a freelancer than as an FTE.


Thanks for the encouragement, tptacek.

> What do you do?

Marketing strategy, SEO, Social, Websites, Adwords, Print.

> Why not try this experiment: bill yourself out at $90/hr in January. See what happens.

You're right. There's nothing that will happen that qualifies me for $90/hr in 6-months. All that changes is charging more for the work.

Thanks for the encouragement, tptacek.


You know what's interesting about the comments on this story? You're posting a lot of comments telling people to charge more money because the work they're doing is valuable and the market is tight, and almost all of them are telling you why you're wrong!

You're basically handing people free money and they're too busy adjusting their plastic sheriffs badges to accept it. As if it were somehow dishonorable to charge your value in the marketplace. Craziness.


I'll inflate my ego here, and state for the record that I'm a pretty darned good consultant, with many satisfied clients over the years and lots of projects under my belt.

Regardless, people in Israel totally freak out when I tell them that I want to charge $100/hour. For Web technologies, that's considered an unheard-of high price. If I were to ask people for $150/hour, they wouldn't even negotiate; they would say "no." And I speak from experience.

(In case you think that I've only worked with small startups that are hard-up on cash, I've negotiated consulting deals with large Israeli and multinational firms in Israel. The response was similar.)

Charging more for a valuable skill set is totally OK. But you can't assume that every consultant on HN can simply increase their rates and get what they're asking for.

I should add that one solution I've had to this issue is to get some work outside of Israel, working remotely for people in the US, who tend to be more flexible on consulting rates.


Absolutely. There's no reason to limit yourself to any geographic particularity in this kind of work (especially going up against the "I'm not a sucker" voice in many Israelis' heads).

Rather than viewing your pool of clients based on geography, it's more sensible and realistic to view it based on potential clients' need for your particular skillset or language or system, wherever they are.

US is still likely the main source of work, and some want US-based people only, but I'd say that's a minority. And it sounds like your English is native, which probably helps.


It has also become practical for me to employ a freelancer to pick up some of my freelance tasks. So far, it seems like one of the best ways to scale my work while focusing only on the tasks I enjoy most.


My rates and procedures are the same. Although, when clients expect me to rush design/build their work I bill 1.5 or double depending on the time frame.


(I feel like this is probably a frequently asked question on HN, but I'm throwing this out here anyway)

As a full-timer working for a big corporation, where would I even begin to start getting freelance work? I'm thinking about a change in my career path and see freelancing as a potential way to go about doing that, but I'm honestly scared about where to even start.


First get one small, but representative project under your belt. Don't focus on rate yet, but keep the scope small so that you don't work for peanuts for too long. Use it and your hobby projects as a portfolio.

Go to a few meetups to build your contact network. Against the intuition, developer meetups can be a surprisingly good place to find new gigs. Startup meetups can work too, there's more biz people there, but in general startup gigs are usually not very good freelance work: high expectations, small budgets, lot of people biz people who know too little about software dev.

Sooner you get to big customers with bottomless pits of money, easier your contracting life will get. This was the biggest lesson for me. For big customers, you can do projects that save them big bucks. Boring, maybe, but pays the bills and you can use the free time to do fun things. So if you want to get your contracting life off the ground, don't focus what is fun, but what is most profitable.


Assuming that you have contacts outside of the corporation where you work, and your name is one that will pop into their heads when they think, "who can I ask to work on this project?", freelance work should start coming to you naturally.

If you don't have those contacts, you need to speak up and get your name out there within the community where you want to find work. Blog about the technology you work with, and show off cool personal projects. Join a local user group. If there is group discussion at the meetings, show that you know your stuff. Go to conferences and make sure you find people to chat with during the day and later on when everyone goes out for dinner and/or drinks at night. In short, it's up to you to show and tell people how great you are before they'll want to work with you.


Thanks to both of you for the input. I've never attended a local meetup before but I think now's a great time to start :).


Whenever possible, I try to do a package price. This works when all the pieces are things I can do, or I can accurately predict my outsourcing cost. It doesn't work when a project gets thorny (damn you google APIs!)

For ala carte or ongoing work, I sell prepaid blocks of hours. I offer 10, 20 and 35 hour blocks; 10 hour blocks are at my highest rate, but if the client buys more then the hourly price goes down. If they don't use up all the hours, then they can bank them for later.


Prepaid blocks are a good idea. It's kind of like a retainer in a way.


for retainer I'll lower my rate even more. Any time spent not having to fill next week's ticket is money in my pocket...

damn, freelancing sucks


I'm curious, what should someone do if they are just starting out?

I'm moving into freelance/contractor/whatever soon, but have zero "official" experience. It's a complete career shift. I code in my freetime and have started to build demonstration projects to throw up on github, but I look new right now.

Should I just charge a "can't beat this price" so I can get some experience and then up my prices to what everyone suggests? Or just pretend I know what the hell I'm doing and charge those rates from the beginning?

I'm already prepared to factor in unbilled, learning time but am not sure what to do on the actual billing side.


- Make a list of the things you will do - Announce this to your friends and colleagues saying you're looking to do small projects to get your process going and will take on larger projects later. - 5 minutes are always free - This is the best rule that has gotten me so much work. Customers can always have 5 minutes of my time for free if they need, just don't string a ton of it together otherwise I have to charge you. - Start your billing around 40-50/hour. When you find the things that pay, focus on those.

If you want to go through what talents you have that you don't think are valuable (but actually are) feel free to connect with me I'd be happy to share anything I know, I started doing the same in 2nd year uni about 12-13 years ago and haven't looked back.


Great, thanks for the tips! I'm going to print these out and stick it on my wall. Going to shoot you an email as well =)


I'm surprised at some of the low points on here... The general rule is to take your desired annual income and divide by 1000 to get your hourly rate. So if you want to make $120,000 year, your hourly rate would be $120.

I think a lot of "freelancers" must end up going through headhunters instead of finding clients directly? You might want to ask what your headhunter is making if that's the case -- I know of one body shop that only offers $50/hr to its contractors, while the client company is paying the headhunter $150/hour.

You can't even get a desktop support person out around here for less than $75/hour...


Previously I was placed by a "staffing" company that took 33% of what the company I was working for was paying.

I only know this because the person who was my supervisor slipped up and told me... I didn't stick around there too long after that and have built up a great group of consistent clients of my own.


So if you want to make $120,000 year, your hourly rate would be $120.

And when you're considering what you think your annual income should be keep in mind that you have to cover your own vacation, insurance, self-employment tax (depending on where you file), and assorted other expenses.


Correct... and that rule of thumb factors that into account.


How many billable hours a day does this assume? Most people won't be doing 8 hours a day, five days a week, like a regular job.

If we assume 4 hours a day, five days a week, 50 weeks a year of billable time you'll need to up the rate to make that amount as in-your-pocket cash.


Some quick math says: ~83h/month = 4.15h/day (conservative approx. - assuming 4 workweeks / month and 5 workdays / week) I think this rule of thumb works pretty well, factoring in some holidays or illnesses.


The factor of 1000 assumes a 4 hr, 5 day week. The typical way of figuring out your hourly rate (given a fixed salary) is to divide by 2000 = 50 weeks (assuming 2 weeks vacation) * 40hr/week.


The factor of 1000 assumes a 4 hr, 5 day week.

    50 * 5 * 4 * 120  = 120,000.00
That's what the clients will be giving you. Out of that comes insurance and self-employment tax and additional social security (in the USA, as an example).

If you are working backwards from a fixed salary you have to also add in the dollar value of additional taxes and insurance, plus whatever other benefits you might be getting.

$120K salary at a regular job > $120K in paid invoices from clients.

If you're a consultant or contractor or whatever, even if you work 8 hours a day they are not all billable hours. There's the tedious business work to look after (record keeping, business development, etc.)


Depends entirely upon the person buying the work.

Penny pinchers = lowest rate, but only as a discount when buying an hour block in advance. Rates are double for afterhours/emergency work.

Waffles = Project based billing so they have to describe clearly what they want. Then changes are additional, or rolled into the next project.

Rich/Busy/Business types = Hourly rates billed monthly net 30. These will generally just cut a check so long as 'X' problem goes away, and you're not a problem to deal with yourself. Best customer type to have. Just make sure you include the scope of what you've handled with the bill. Even better if you figure out what their approval limits are and stay under that.


I bill $30/hr and slowly increasing my rates with every new client.

Only being available for work two-ish days a week greatly reduces my client pool. Being 8 hours away from most of them doesn't help much either. (I don't like working locally because everyone puts too much effort into trying to rip you off)


I develop iOS applications. Based on j45's definitions I'd be a consultant/contractor. I have one client right now and they take up most of my time. They're a small startup and it was my first development job in nearly 10 years. The first projects were priced according to the scope of the work and what they could afford. I was severely undercutting myself but I Didn't feel I had any leveraging power. Their dependence on me grew and they've come to rely on me to help them shape the direction and future of the company. The last project I charged what I believe is market rate for an iOS developer and I let them make payments while I retain all IP rights until its been paid. Now I have an ongoing agreement with them where I guarantee them a set amount of time per week in exchange for $1,000/wk. How that time is used is up to them. It could go to consulting or to actually writting code. This works out for both of us because my income is fixed from this client, it's not full time, gives them flexibility to use me as best serves the business and keeps us from wasting time on the negotiation table on individual projects.


You make a great point about IP. If the customer wants to save money I retain the IP and license it to them.


I saw this question being asked a lot, so I wrote my policy here: http://gun.io/blog/how-much-to-charge-as-a-freelance-compute...


Regardless of whether you're a freelancer, contractor, or consultant please do yourself a favour and have a lawyer created contract together. If you don't have a rock solid contract you're leaving money on the table, and making yourself extremely vulnerable.

Also highly relevant - Fuck you, pay me: http://vimeo.com/22053820?utm_source=swissmiss


I think that this is a highly Angst-driven approach - I used to feel the same, but I decided that I have to put more trust in people not trying to screw me. Of course, your BS radar has to be finely tuned to not engage with potential troublemakers.


I felt the same way as you. Then we had a client that refused to pay us a month and a half of payroll. Changes the tune of things. The quote for me from the video that solidified this was: 'when you hire a lawyer [to handle contracts] you switch from being a design amateur to a design professional'. Applies equally to programmers.

Having a solid contract doesn't mean that you can't trust people. They just make everything legally binding so that if trust deteriorates (and it will if you do this long enough) that you'll be covered.

Also don't let the title of the video deter you, it's a (mostly) tongue-in-cheek title.


I am new to the freelancing game and I try to bill at roughly USD65. However I tend to work more hours than what I bill for or I charge less per hour because I am afraid of loosing their custom when the project slips in time. I think this is because most of my clients are friends and acquaintances from previous jobs. Maybe I need to get strictly business clients. Also, one of my clients as asked how much I would charge for a retainer fee. I don't even know what to answer to that. Does anybody have experience with retainers? Are these a good idea?


Don't put in a single hour of work beyond the estimate if you don't have a retainer, or you don't at least have good faith that the client has put the check in the mail.

Why? You need some ability to walk away from the client without losing your shirt if the customer decides to go a completely different direction or completely rejects the result of your work. It at least keeps some food on your plate while you're doing the work.

I do 20% retainer of the original estimate upfront, which is on the low end compared to other contractors.


Thanks for you reply. I might have explained myself poorly but the client mentioned the word 'retainer' as a kind of contract where they pay me a fixed income in exchange for my 100% availability for any work they want me to do. They would pay for the work on top of that income as well. If I accept I get a more stable income but I might miss on interesting work opportunities. Is this what you refer to as retainer? Or is there a different word for this concept? It's almost like a call option in financial markets.


I think your definition is the more standard one. I think the parent post meant to say "deposit". Retainer is usually "$2000/month for up to 20 hours of work".


X per month for up to Y hours of work sounds interesting. And if the time is not used it could just accumulate...


I wouldn't let it accumulate. Those extra hours are your profit.


Yes, I guess that makes sense. I need better clients.


Retainers can be helpful, it means they get priority access/response time from you for a fixed fee per month. There are other forms that you can google.

It's fair to increase your rates 2-3% every year for inflation, send out a letter 2-3 months in advance and it teaches your customers that things cost more every year.


Given the extra costs of being a freelancer (health insurance, self-employment tax), if you want to be living in the same neighborhood as your full-time peers you should be charging at least 75/hr.


I'm at $50/hr doing SFDC -- I think a lot of my rate is based on the fact that I'm local and there isn't a large talent pool locally for what I do (Denver, CO)

I'm thinking I could move up to $75, if I didn't get benefits (very expensive and worth it here in the US)

If I thought I was working with a product where there were more people with experience around - I'd ask for less.

ALSO: LOWER RATE = MORE CLIENTS WHOM DON'T KNOW WHAT THEY'RE TALKING ABOUT AND DON'T WANT TO PAY FOR THINGS THEY DON'T UNDERSTAND.


I do software development in the Denver/Boulder area too, but do not know what SFDC stands for. Salesforce something?

I do agree that the lower hourly rate you seek/accept/charge to clients, generally the worse quality clients you get. Clients that want lower rates tend to be more clueless, less experienced, more tight-fisted with cash, more likely to try scope creep on every milestone, and they tend to concentrate too much on rate but not on total hours or quality or other positive qualities. They're more likely to think hard things are simple and simple things hard. This latter point especially is true of most non-technical clients, but in general it's more pronounced with the cheapskate/rate-focused clients, I've noticed in my experience.


This is about as worthwhile as asking "as a human, how much do you bill per hour?" Everyone has a different skillset, caters to different customers, and thus has a different reasonable range of what they can bill. Some freelancers may be doing little more than some simple cut and paste or configuration work, others may be writing operating systems from scratch, the rate they charge for those services will of course vary greatly.


Approximately 200 USD plus VAT. Sometimes more, sometimes less. If the customer doesn't haggle, the quote was too low. I'm based in Oslo, Norway.


How many hours per week does your average contract take up? I charge just under half that, but my contracts are usually full-time hours for months and sometimes years at a time.


My sample size is too small for an average to make sense. Smallest contract was 1.5 hours. Biggest contract is 350 hours so far, with 500+ to go.


What's your skill set and which types of companies do you usually work for?


Full-stack web developer. I'm a mediocre programmer, but know the web platform well. I've just been at this game for a few months, but have spent the past seven years working for å browser vendor. That helps.

My most significant customers so far have been impatient non-profits that want results yesterday. I don't know if that will remain my primary demographic. (c:


It depends on the work. If I'm guaranteed a large amount of ongoing work (something getting close to full-time hours), then I'll usually bill lower. If it's a once-off project, I'll usually bill either a fixed quote, or a higher hourly rate.

Fixed quotes aren't that common, though, unless the client already has a scope set out, or is willing to agree to one.


Regarding consulting cost and value based model, i would like to mention Martin Fowler article regarding Utility vs Strategic projects (http://martinfowler.com/bliki/UtilityVsStrategicDichotomy.ht...). In a really clever manner Martin Fowler distinguish projects depending on whether the business function is a differentiator or not. "This is not a separation of IT by the nature of the technology, but into what technology does for the host business". This point of view should be taken into consideration whenever a consultant/freelancer/contractor have to prepare a quote for a project as the value of the project to the business can influence the cost.


I develop apps for Android (got some good iOS knowledge too), and I currently charge 40€ - I'm constantly raising that number (last gig was my first paid Android project, for 30€, which I now consider a dumping price). I do have to say that I'm still not sure whether Android development is a good sector to earn good money in - maybe I should start consulting or remote working (Berlin and London seem to be good places). Interestingly, there is a culture of undercutting hourly rates in the Austrian freelancer community, or so have I experienced people around me ("What? You're leaving us because 30€ is not enough?" said a web-freelancer when I left).


Looking at these numbers, I am amazed at the inequality bt. different parts of the world. Here in Turkey, hourly rate of a developer is around 10$, maybe 15$ if you are better. Of course, the cost of living is lower, but still...

Time to move abroad perhaps.


Makes you wonder, doesn't it? Throughout this thread I've seen derogatory comments about "overseas" talent, which is to be avoided like plague.

Are the developers in USA really 10x more effective than in Asia/poorer parts of Europe, to warrant the 10x higher salaries? To me the answer is obviously not (I live in Eastern Europe), but perhaps there is some magical quality one acquires upon moving to the US :-)

Once remote, does it really matter that much whether the other party lives on the same continent? http://37signals.com/svn/posts/3064-stop-whining-and-start-h...

EDIT: Obviously charge western rates if you can :) My point is it's hard to justify the imbalance of market value that you mention, in case of IT freelancing.


I live in the US and have worked with teams that had developers in India and Eastern Europe. The language barrier can be very tough. So much so that the "discount" just isn't worth it.


No, time to stay in Turkey, but get clients that are abroad. Western rates at non-western living expenses is the magic formula...



Quite the same here for me in India. 15$/hr is considered good for a web developer (atleast on oDesk). I have worked with a US based client and a Belgium client. They both say that I am the best they have worked with, in terms of technical skills and communication.(They are both developers) But maybe thats because of their limited price range to begin with. But looking at the rates over here I think we both need to learn to market ourselves better. Or maybe we need to find better source for getting work. From where do you get your work by the way?


No reason why you can't compete with those working for $100+ an hour from turkey if you are able to deliver the same or more value.


As someone who has worked as a consultant and hired them, it's hard to imagine a piece of work that I'd be willing to pay an outside contractor a continuing percentage for. Products,definitely, but that assumes a more or less tu rn key solution that I am not responsible for maintaining. But code rots, marketing is forgotten, and business practices must continually adapt in the face of changing realities on the ground, as it were. If I'm paying you for your expertise, I'll leave the money on the nightstand , but you're not getting half my stuff. ;)


Another tip: Always quote a range not a price no matter the time period. A range allows you to gauge a response and many times allows the higher end. Whether you are quoting hourly or a per job basis.


I very much and often use the "upto 5-7 hours" of work in my quoting.


I charge between 40-50 in Bangalore.

I have been thinking about an interesting idea. Would anyone be willing to relocate to Bangalore for a 1 year freelancing gig? There will be lifestyle compromises to make, but you can save about 4k/month or more. It is insanely hard to find talented developers here, and I am thinking there is a limited opportunity for outsiders to come and work here.

Sort of like outsourcing backwards. I can help set it up if a group of people are interested in this.

(About to get into a plane, so will be replying only after 3 hours)


Funny (or very blind) that you "forgot" the rates with which one is supposed to compete on freelancing sites, like Odesk, Freelancer, etc. Then this list should start with 0-2.99 Dollars, 3-7.99 Dollars, 8-14.99 Dollars, 15-24.99 Dollars, 25-49.99 Dollars - you won't believe how many jobs are being awarded for rates under $4/hour. SCARY! The result of "globalization" in freelancing.

webbeetle - who tries to compete with rates around $30-40


Traditionally when I've freelanced in the past I've billed hourly (varying rates, depending on what the client will bear) but I've read some convincing stuff that billing that way in essence punishes productivity. If you figure out how to do things faster, you just end up costing yourself money, so why bother? I've done agreed per-project rates as well and I think they're both more lucrative and better for your sanity.


To those of you with years of experience:

If I'm looking to start consulting on the side, is it reasonable to charge lower rates at first to attract business and get some experience (something in the $50/hr range)

While I want to be paid fairly for what I'm worth, I also don't want to overcharge clients while I figure out what I'm doing (processes and services etc).


You probably won't get a straight answer to this so I'll say the tough words.

Anyone who's established will be easier to philosophize about why you shoudl charge more.

At the end of the day, no one pays your bills for you but yourself. Getting any work is more important than getting good work. Getting great work is more important than getting good work.

I don't know if I am doing it the best way but I did start ($50/hr in 1999) doing absolutely anything anyone would pay me for at that equivalent rate.

Also, figuring out your processes and services is complete BS. You never stop developing and improving them. I've trashed my entire setup and rebuilt/programmed it from scratch 5 times in 10 years only to finally settle on a happy-ish medium of Fogbugz and Freshbooks.


I charge $40 to do design and WordPress development.

As another example, an ad firm I interviewed with a few months ago were charging $1,000 per day to develop a website, brand, 'strategy' etc. The $1,000 got you a developer (really just a mid-range non-programmer), a copyrighter, a graphic designer, and a project manager.


A few hundred. It varies depending on how much I want to do or don't want to do what they're asking for. Tends to be "consulting" and monthly. I think the last one worked out to about $400-500/hr, but I wasn't tracking time closely.


I charge $300/hour for marketing consulting or a different structure on commitment to budgets.

One thing I've learned is never do a flat rate, no matter what. Projects will always be different than what you estimate so do time and materials only.


You can get away with flat rate more if you can add a zero to your quote ;)


Contractor, i guess? I dont bill by hour because my work productivity highly depends on my mood, so hourly rate would be unfair. A project wise prefixed rte s what i look for.


What I would like to see is this data with geographic distribution. I'm pretty sure it would be quite interesting to see the differences between the global regions.


75 for the first hour, 40 every hour after that.

That's just for general workstation & network support. Other 'projects' come with different pricing...


Any tips on how to start charging more without scaring away new and existing clients


Depends on a country or region.


65


it's all of the above


$150-$300, depends on client, complexity




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