By the job or by the hour?
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I've just started doing a little free lance web development work between my classes and 'real' job. My question is this - How should I charge for my services, by the hour or by the project? And should I include a clause in the contract for maintenance? Basically all that I'm doing is setting up basic web pages with limited database interaction, but in talking with the clients these small projects could increase substantially into full blown applications/web sites. The client never knows all the requirements he/she wants at the beginning.;)
An American football fan - Go Seahawks! Lil Turtle
If I am super confident in how to do a project, i.e. I've done one just like it before, it is fairly short in time scale and the specification is exact, then there is a very slight chance I would consider charging by the job. Otherwise, I only charge by the hour plus expenses. This is especially true when the client doesn't know all the requirements. (I haven't done contracting in seven years, but nothing fundamental has changed. In the mid-90s, I did a set fee contract which required an unexpected expense on my part. I broke even on that project and haven't done a set fee contract since then.)
Anyone who thinks he has a better idea of what's good for people than people do is a swine. - P.J. O'Rourke
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If I am super confident in how to do a project, i.e. I've done one just like it before, it is fairly short in time scale and the specification is exact, then there is a very slight chance I would consider charging by the job. Otherwise, I only charge by the hour plus expenses. This is especially true when the client doesn't know all the requirements. (I haven't done contracting in seven years, but nothing fundamental has changed. In the mid-90s, I did a set fee contract which required an unexpected expense on my part. I broke even on that project and haven't done a set fee contract since then.)
Anyone who thinks he has a better idea of what's good for people than people do is a swine. - P.J. O'Rourke
What is a fair hourly rate? $15/hr....$20/hr. I am very new to this contract base work, I have been writing web pages/applications as an intern for about a year now so I am fairly confident about undertaking these projects, but I want to be fair with my fees. Thanks for the input, BTW.
An American football fan - Go Seahawks! Lil Turtle
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What is a fair hourly rate? $15/hr....$20/hr. I am very new to this contract base work, I have been writing web pages/applications as an intern for about a year now so I am fairly confident about undertaking these projects, but I want to be fair with my fees. Thanks for the input, BTW.
An American football fan - Go Seahawks! Lil Turtle
It depends on the client and the job. For quick calculation of hourly rate, divide the average yearly salary of people of your skill level doing that job by 2000, then add 10% for taxes you have to now pay. This is the minimum you should charge. Increase that according to how much the client needs to the project done, how many genuinely unique qualities you bring to the project and so forth. Be wary of clients asking you to charge less to prove yourself then they will pay more in the long run. Odds are very high they are lying. This is one of the biggest challenges when contracting; being willing to walk away when you really need the work. Also be prepared to never get paid. The only time that happened with a client, I was being fronted by a temp agency so I still got paid, but they never did.
Anyone who thinks he has a better idea of what's good for people than people do is a swine. - P.J. O'Rourke
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I've just started doing a little free lance web development work between my classes and 'real' job. My question is this - How should I charge for my services, by the hour or by the project? And should I include a clause in the contract for maintenance? Basically all that I'm doing is setting up basic web pages with limited database interaction, but in talking with the clients these small projects could increase substantially into full blown applications/web sites. The client never knows all the requirements he/she wants at the beginning.;)
An American football fan - Go Seahawks! Lil Turtle
Lil Turtle wrote:
My question is this - How should I charge for my services, by the hour or by the project? And should I include a clause in the contract for maintenance?
A) charging by the hour, when possible, is the best possibility. Some of us do not have that choice, which means we have to estimate in buffers, because the money is pre-allocated. But this takes a LOT of practice to get right. And the money has to be spent, so if you finish early/cheaply, then you have to add to the project to make it come out even, which means you have extensions in mind for the design from day 1. B) Charging by the project means the customer has the ability to work you to death for almost nothing. This means you have to have a REALLY good relationship with your customer, and a lot of trust. Without that trust (both ways), the client will destroy you financially. C) clause in the contract for maintenance? as in forcing them to return to you for maintenance? no. As in additional maintenance is possible, but not covered under the initial contract, that the hourly rate can be used to extend the project as long as time is available. Remember also that if a customer wants to extend the work, it could affect other projects, so you have to be careful not to give so much freedom to the customer to think that they can push all other customers out of the way.
Lil Turtle wrote:
The client never knows all the requirements he/she wants at the beginning.
This is common, which is why you want to avoid being charged by the project, instead charge by the hour. Explain it as an advantage, once they see the result they will get more ideas, and the two of you can flesh it out into new capabilities to add to the system. Even though we charge by the project, because we must, there is flexible portions in some contracts to help the customer flesh out some of those ideas. But customers who have tried to take advantage of the contract, and abuse the relationship, don't get additional work, or everything gets written in B&W and nothing gets abstracted ever again for our protection.
_________________________ Asu no koto o ieba, tenjo de nezumi ga warau. Talk about things of tomorrow and the mice in the ceiling laugh. (Japanese Proverb)
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It depends on the client and the job. For quick calculation of hourly rate, divide the average yearly salary of people of your skill level doing that job by 2000, then add 10% for taxes you have to now pay. This is the minimum you should charge. Increase that according to how much the client needs to the project done, how many genuinely unique qualities you bring to the project and so forth. Be wary of clients asking you to charge less to prove yourself then they will pay more in the long run. Odds are very high they are lying. This is one of the biggest challenges when contracting; being willing to walk away when you really need the work. Also be prepared to never get paid. The only time that happened with a client, I was being fronted by a temp agency so I still got paid, but they never did.
Anyone who thinks he has a better idea of what's good for people than people do is a swine. - P.J. O'Rourke
Joe Woodbury wrote:
calculation of hourly rate, divide the average yearly salary of people of your skill level doing that job by 20 (divide by 10 then by 2) then add 10% for taxes you have to now pay.
Eh? :confused: That doesn't make sense. Say someone's on a salary of £20,000 / year then by your calculations ((20,000/20)*1.1) = £1,100 / hour! That's not what people on £20k get paid per hour.
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Joe Woodbury wrote:
calculation of hourly rate, divide the average yearly salary of people of your skill level doing that job by 20 (divide by 10 then by 2) then add 10% for taxes you have to now pay.
Eh? :confused: That doesn't make sense. Say someone's on a salary of £20,000 / year then by your calculations ((20,000/20)*1.1) = £1,100 / hour! That's not what people on £20k get paid per hour.
It'd be nice, eh? Only working 10 hours a year.:laugh:
An American football fan - Go Seahawks! Lil Turtle
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It'd be nice, eh? Only working 10 hours a year.:laugh:
An American football fan - Go Seahawks! Lil Turtle
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Lil Turtle wrote:
My question is this - How should I charge for my services, by the hour or by the project? And should I include a clause in the contract for maintenance?
A) charging by the hour, when possible, is the best possibility. Some of us do not have that choice, which means we have to estimate in buffers, because the money is pre-allocated. But this takes a LOT of practice to get right. And the money has to be spent, so if you finish early/cheaply, then you have to add to the project to make it come out even, which means you have extensions in mind for the design from day 1. B) Charging by the project means the customer has the ability to work you to death for almost nothing. This means you have to have a REALLY good relationship with your customer, and a lot of trust. Without that trust (both ways), the client will destroy you financially. C) clause in the contract for maintenance? as in forcing them to return to you for maintenance? no. As in additional maintenance is possible, but not covered under the initial contract, that the hourly rate can be used to extend the project as long as time is available. Remember also that if a customer wants to extend the work, it could affect other projects, so you have to be careful not to give so much freedom to the customer to think that they can push all other customers out of the way.
Lil Turtle wrote:
The client never knows all the requirements he/she wants at the beginning.
This is common, which is why you want to avoid being charged by the project, instead charge by the hour. Explain it as an advantage, once they see the result they will get more ideas, and the two of you can flesh it out into new capabilities to add to the system. Even though we charge by the project, because we must, there is flexible portions in some contracts to help the customer flesh out some of those ideas. But customers who have tried to take advantage of the contract, and abuse the relationship, don't get additional work, or everything gets written in B&W and nothing gets abstracted ever again for our protection.
_________________________ Asu no koto o ieba, tenjo de nezumi ga warau. Talk about things of tomorrow and the mice in the ceiling laugh. (Japanese Proverb)
Jeffry J. Brickley wrote:
A) charging by the hour, when possible, is the best possibility
This is the direction I am now leaning towards, should my quote be variable depending on the complexity of the project? i.e. - Just a basic web form = cheaper, web form/admin application = more expensive. Or should it be just a flat fee per hour?
Jeffry J. Brickley wrote:
As in additional maintenance is possible
This is what I had meant when mentioning the clause. I was thinking something like - 'additional work subject to developers availability and clients requirements' Very informative advice, Thanks. -- modified at 13:37 Monday 15th January, 2007
An American football fan - Go Seahawks! Lil Turtle
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I've just started doing a little free lance web development work between my classes and 'real' job. My question is this - How should I charge for my services, by the hour or by the project? And should I include a clause in the contract for maintenance? Basically all that I'm doing is setting up basic web pages with limited database interaction, but in talking with the clients these small projects could increase substantially into full blown applications/web sites. The client never knows all the requirements he/she wants at the beginning.;)
An American football fan - Go Seahawks! Lil Turtle
That is a decision usually best made with experience. Sometimes there are a lot of little, easy projects, with low risk called gravy. Fixed price is very lucrative on these. Sure a few will bite yo but hey! Personally, I only do hourly now but in the past I did a few fixed price affairs. If your client never knows the requirements always do hourly. Also, reel them in with a low rate for the first few since you are new to the business. Then after a few succesful projects bring your rate in line with market.
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Joe Woodbury wrote:
calculation of hourly rate, divide the average yearly salary of people of your skill level doing that job by 20 (divide by 10 then by 2) then add 10% for taxes you have to now pay.
Eh? :confused: That doesn't make sense. Say someone's on a salary of £20,000 / year then by your calculations ((20,000/20)*1.1) = £1,100 / hour! That's not what people on £20k get paid per hour.
Forgot two zeros. Now corrected. Also note that the tax rate is for US, specifically the portion of Social Security / Medicare you now have to pay. I believe it's actually 9.1%, but rounding up to 10% makes the calculation easier. I'm not sure what the comparable increase in taxes is for people outside the US.
Anyone who thinks he has a better idea of what's good for people than people do is a swine. - P.J. O'Rourke
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It'd be nice, eh? Only working 10 hours a year.:laugh:
An American football fan - Go Seahawks! Lil Turtle
Forgot two zeros. Now corrected.
Anyone who thinks he has a better idea of what's good for people than people do is a swine. - P.J. O'Rourke
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Forgot two zeros. Now corrected. Also note that the tax rate is for US, specifically the portion of Social Security / Medicare you now have to pay. I believe it's actually 9.1%, but rounding up to 10% makes the calculation easier. I'm not sure what the comparable increase in taxes is for people outside the US.
Anyone who thinks he has a better idea of what's good for people than people do is a swine. - P.J. O'Rourke
Joe Woodbury wrote:
Also note that the tax rate is for US, specifically the portion of Social Security / Medicare you now have to pay. I believe it's actually 9.1%, but rounding up to 10% makes the calculation easier. I'm not sure what the comparable increase in taxes is for people outside the US.
To clarify for anyone outside the US, half of the SS/Medicare tax is normally payed by the worker the other half by the employer (a blatant shell game to make it look like a less expensive boondogle), but self employed people have to pay the full amount themselves.
-- Rules of thumb should not be taken for the whole hand.
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Joe Woodbury wrote:
Also note that the tax rate is for US, specifically the portion of Social Security / Medicare you now have to pay. I believe it's actually 9.1%, but rounding up to 10% makes the calculation easier. I'm not sure what the comparable increase in taxes is for people outside the US.
To clarify for anyone outside the US, half of the SS/Medicare tax is normally payed by the worker the other half by the employer (a blatant shell game to make it look like a less expensive boondogle), but self employed people have to pay the full amount themselves.
-- Rules of thumb should not be taken for the whole hand.
Good to know, Thanks.
An American football fan - Go Seahawks! Lil Turtle