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It might be easier to think of $200k as -only- $100 an hour. That is not a very high rate for a contractor. Anyone here who has been through a contracting company has probably been billed at that rate.

The most successful that I've seen has always been one of three things. All of these can be traced back to people I know making over $200k in the software industry.

#1) Knowing a niche technology and/or industry, finding a company that needs to staff and going in as a self-employed contractor instead of an employee.

I had friends making $200 an hour in 1999 because of this. I'd like to say they were working in Lotus at the time, but I don't really remember.

Find a company and say "I live right down the street, you need X and it is hard to find, you can either have me show up every day or have someone a few thousand miles work on it" - for some companies it is easily worth the extra $40-$60k to have someone local.

#2) Working on a well known technology but having something important on your resume - and still going in as a self-employed contractor.

Being able to say that you are a major Spring contributor will open doors. Being able to point to your name on the list of authors of Hibernate opens more doors. It doesn't even matter if all you did was help update the docs. It's just a selling point, and it works.

Most enterprise shops will think about it like this; "Either we hire Bob who did some spring work for x-corp, or we pay an additional 40k and we get Lisa who helped write Spring. If you ask me it's worth it to get Lisa".

#3) Biting the Enterprise Application Architecture Bullet - and going in as a self-employed contractor

Can you confidently whiteboard the entire Oracle Enterprise Suite? Can you talk about JMS queues, BI managers, the E-Business Suite and all that, ahem, stuff? There's plenty of companies who have built very complex solutions to simple problems and they need someone that knows how the wiring is supposed to work.

...that's the extent of how I've seen it work. All three share the same trait; find a company in need and pitch yourself as a contractor.

So I missed the whole advice thing. Here's what I'd say:

If all you want to do is make money then get yourself in as a contractor for a specific industry. Let's say that is shipping, or distribution, or something along those lines. The more time you spend doing X work for X industry the more valuable you become. If you can walk into X-Shipping-Corp and you can name-drop things like "Parcel Size Distribution" you'll probably be fast-tracked into compensation discussions.

To give you a real world example, I did lots of travel software work years ago, just being able to walk in and say "I worked with Sabre Worldspan and Galileo" was enough to get me to an offer. Hell, I didn't even need to explain what I knew about them (which wasn't much!).

That's really if you just want to make money. It isn't glamorous work, and it pushes you into a very specific bucket, but you will most-likely be well compensated.

Careful! Consulting hourly rates and salary are apples/oranges comparisons. Even in a really well-run consultancy your utilization might not break 80%. You're responsible for your own benefits and for self-employment tax. And you're doing all the work (or paying to outsource it) that your employer would have been doing for you --- sales, marketing, bookkeeping, receivables, payroll.

The extra work that comes with consulting is well worth it. You earn more, are able to expense much more and at the end of the day you feel like you are running your own business (because you are). Understanding the basics of payroll, bookkeeping, client management, etc helps you grow as a professional. It may not be for everyone but its worth doing for at least a few years.

I hope you're not expecting me to disagree with that. :)

They are apples and apples from the client's perspective though and as an independent consultant it's quite possible to consistently achieve 100% utilization.

Well, in the consulting engagements I have done (about half of my career has been as an independent), all of my clients were aware of an important distinction, and that was that I was 1) there for a short time 2) did not incur the large overhead that a full-time employee would.

To achieve 100% is moderately difficult and would involve a bit of luck, or some kind of compromise.

From experience, it's quite possible to achieve 150% utilization...

For an entire year?

I have 2-3 clients that put me well over 100% utilization for a couple years going strong now. I have to routinely turn down work. Don't even really have to look for it, and this is in the Midwest!

The one key I have found is not to sell yourself as a freelance consultant. Form an LLC and pitch as a business. If you need to find a couple other guys to help out for a large project do it. But you can command much higher rates this way.

> The one key I have found is not to sell yourself as a freelance consultant. Form an LLC and pitch as a business.

Can you explain your reasoning for this?

I can answer it for him: They pay more.

Depending on the variety, sure.

60 hours a week really isn't that stressful. You could probably get there with less total stress by outsourcing cooking, cleaning, etc and working in 3 hour chunks with 1 hour breaks in between.

Remember that 60 hours/wk is only about 50% of your waking hours.

edit: Sorry, I somehow didn't understand you were saying it was a supply problem rather than a stress problem. The answer to supply is much simpler: go to tech meetups in the bay area and sound smart.

Agreed. Also, the reason consulting rates are not high is not b/c of the benefits (that makes at most 20% of the diff between consulting and full time rates). The difference is uncertainty! If you freelance, you have no idea where your next gig will come from. If you are long term contractor, you are 1 step away from being the first cut in the budget

If you think that you're going to be 100% utilized, you are saying that not only do you have no uncertainty as to where your next engagement is going to be, but also that your clients have no uncertainty as to their schedules, and none of their engagements are every going to slip, change scope, or get cancelled.

We might be having an issue with the definition of the word consultant here or the Dutch market might just be different.

My contracts generally always come in 3 month stretches. In case I haven't received a signed 3-month extension 1 month before the end of a contract I would start looking for my next engagement.

I also make sure I always take calls from recruiters and let them know when my current contract is up for renewal, so that every three months all recruiters I know will call me asking if I'm already available.

I generally also have a decent number of ex-colleagues already lined up which would be interested in hiring me if I were to become available again.

Now of course I don't get 100% utilization, but in practice my holidays and illnesses have had a much bigger impact on that than availability of engagements has.

A 3 month contract is a huge engagement for us (but then, our bill rates are much higher than the one mentioned in this thread). So, yes, I think we're talking about two different concepts of contracting/consulting/freelancing. You're doing staff augmentation, we're doing consulting/freelancing.

We probably both agree that freelancing is a way to make more money than you would on a steady salaried job. But it also comes with markedly increased risk, which is why it pays more.

I was expecting you to tell me to raise my rates, since after reading my comment it seemed that what I was describing is what you'd expect to happen to an underpriced commodity with limited availability.

I agree with seeing freelancing as a way to avoid paying a third party for doing sales (marketing & negotiation) and finances (bookkeeping & buffering) for you. In many cases and for many people it's also better to outsource those tasks to your employer.

P.S. Do you think you would have trouble staying 100% utilized if you were charging $100/hr as originally mentioned?

Probably not, but since they bill "much higher" than that and get 80% utilization, they would probably be leaving loads of money on the table. I'd see 300% utilization for $10/hr as well.

Not all contractors are consultants. I just walked out of a gig at 100/h where I could, optionally, have billed overtime, worked 60h, and been making over 300k. As a consultant, I've billed nearly 500 an hour, so do your math on six hours a week of that. ;)

The terms didn't feel permanent in this situation, I also couldn't drive myself to work more than 6 hours in a day, so I moved to a position with a salary closer to that which wasn't tied to a weekly timesheet.

What kind of work got you $500 per hour ?

They are apples/apples. You literally just compared them.

Regarding biting "the Enterprise Application Architecture Bullet," if all I wanted was money I think I'd feel less dirty and immoral at the end of the day running a porn site than purposefully selling people extremely complex solutions to simple problems.

I realize that's a controversial thing to say, and I might get downvoted, but screw it. Porn (the well-regulated with paid actors kind) is quite often more honest.


Sorry, I have no idea how I thought 'traditional' should be used as a modifier for the word "porn."

The sentence does end with "... and they need someone that knows how the wiring is supposed to work."

I can easily imagine that the people in such companies are well aware that the system they have is overly complex but they don't have the ability/will/breathing-room to change. In such a scenario, I'd be perfect happy to pay top-dollar for someone who can understand it and patch things up. I might even consider them a knight-in-shining-armor.

I remember a great HN submission from a while ago (can't find it now, I'm afraid), where a guy was making a great living out of making MS Access databases available online (or something like that). His work/software was critical to his customers' businesses -- but he'd gotten to the point where he couldn't stand it anymore (and the technical aspects of the company were quite convoluted).

Contractor != Full time software engineers, which is what the topic is.

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