240/hr is a lot of money, especially outside of the valley.
That's not a custom dev rate, that's a you have a track record of doing something very niche and valuable and usually domain specific. I.e. you have a portfolio or set of recommendations that you delivered successful financial plug-ins for oil and gas ERP systems.
Don't believe that shit. I worked through an agency once where I was the subcontractor for several projects. One time the account rep was lazy and sent me the customer's contract and failed to remove the rate he was charging for my work. I was charging $150/hr. He was charging the client $400/hr.
People will pay a premium for something they value. In that instance I actually won out eventually. It turns out the agency was really shitty at managing projects and that particular client got in touch with me directly. He agreed to pay me $400/hr if I gave him priority. I did, and he started referring me to other businesses who would also pay that rate.
So don't kid yourself about how much people will pay.
The naive answer I would have given at time was: "I'm a software developer who builds ecommerce and CMS sites."
And it's funny that you ask "What do you do?" At the time I had starting taking on projects from a friend who had been doing development contracting for about 4 years. One time when a client told me my proposal was priced too low and passed on my bid I was baffled.
I told my friend about it and he asked me the same question, and I gave the above answer more or less. He corrected me and said "No! You're businessman enabling a national sales channel for a local or regional business who wants to increase their revenue."
So never define your price by what you do, rather define it by what the value of thing is you're delivering to the client. This requires some research on your clients and a realignment of your thinking. When you're contracting as a developer, you have to start considering yourself as becoming a successful businessperson and not (just) a successful software engineer.
I started charing on a per week and per month basis, which was good because I stopped getting bothered with tiny projects.
Also I could choose how much hours per week I was willing to work, as long as the clients are happy they don't care if it took me 40 hours that week or 20. This also increased my effective per hour payment and my work life ballance.
It is also important to sell yourself with a higher value proposition. If you say "I'm a freelancing front-end dev who does JavaScript" they won't pay you as good as when you say "I'm a mobile consultant, who designs and implements apps", even if you do basically the same thing, people suddendly realize that you are a specialist and not some code monkey...
> And I'm not kidding myself. Most companies know they can get good devs for significantly less than 400/hr.
You can get a great dev for much, much less than $400/hr. You're right. However, should I charge less than that to do a few hours of work for you? Absolutely not.
If I'm doing a small project for a few hours for you I have to charge a lot to cover the business costs.
Yeah, the projects I'm pricing out are usually 200-1400/hrs. I can totally see that rate for smaller projects. I imagine utilization rates are a lot harder to keep high with work that granular.
Yes absolutely. If I have a client that's going to drop a thousand plus hours into the project they're getting charged a quarter of what someone who just needs me to log in once and a while gets charged.
I know there's an international tax lawyer in SF charging $1250 hour. If you want the big bucks, law's one of the places to get it (provided, presumably, you work hard and are very smart).
I think they mean that that's the estimated time allotted for the project. What they're implying is that they charge less because of it, but if they worked shorter projects, they would likely charge more.
"240/hr is a lot of money, especially outside of the valley."
Nope. It is close to what I just paid a plumber. The plumber wanted $5000 for 16hrs of work to redo my piping ~$300/hr. (The cost materials: plastic PEX was probably $40, small house a one guy job). Remember this is a residential plumber - not a commercial electrician. WHY SO EXPENSIVE? You might ask? Try outsourcing my plumber.
You have a plumber that charges by the hour?? That is awesome. I have only met plumbers that charge per project. Still, your plumber makes 200k a year!
Yeah I think the other guy is right. That's definitely a premium plumber.
I had my plumber fix a pipe that broke inside the foundation for a $1100. And that involved 8 hrs of 4 guys digging a long and deep ditch, as well as chiseling out foundation.
Not really, I'm trying to hire anyone, even mediocre developers and designers and simply can't get anyone right now on a short term basis even at $300/hr. We're going up to $500/hr soon.
It's really really hard to get people right now. As bad as I've ever seen it.
"Short term basis" being less than 6 months / 1000 hours?
Yes, you will pay a premium. If you can stretch it to 1k hours or 6 months, you will be able to get cheaper prices. I doubt you'd be paying over $200/hr.
Very very hard for me to imagine. I know good designers who'd be willing to work for $40/hr. CAD. Developpers are a bit pricier, maybe 60-70... Can't find mediocre ones for 300? Maybe we don't have the same definition of mediocre. And btw, one year full time at $500/hr is in the vicinity of one million. Where do I sign?
I just quit my job as a Software Architect for one of the biggest hosting providers in the US. I am available for short term projects if you are still looking.
I think a lot depends on who your clients are and what your business is. If you're talking about a real professional services engagement (Accenture, Oracle Consulting, whatever) then $300+/hour for an architect-level resource is pretty standard. Hell, junior business analysts get charged out at $175/hour.
As a one-person shop the value you can bring is probably lower because you don't have the synergies of a team and you will have to spend some of your time doing junior BA-type work. You can't charge yourself out at the full rate of an architect-level resource because you're not spending all your time doing architect-level work. However as a one-person shop your overhead should be lower (e.g. no HR people or other cost centers to support with your billings).
$75/hour seems awful low as a 1099/consultant, so it's no wonder businesses are happy to pay that.
IEEE consultant surveys indicated ~$150/hr for a well trained consultant in software is median last time I checked. But what you get depends on how you get your business and what your approach is to selling your services.
I think I'd find it impossible to charge more than $200/hr for embedded firmware (Boston), but could probably get $400/hr for systems engineering or industrial design to develop an integrated complex solution to a business problem that they don't have the in-house expertise to deal with.
I think a lot depends on the situation. There are a lot of companies who would pay a lot of money to have a technical person on their team who follows best practices, doesn't slack off, and is reliable. This is a low bar, but many engineers don't live up to this and end up causing as many problems as they solve, including being hard to manage.
If, as a contractor, you are professional, easy to get a hold of, and treat your work seriously you'd be invaluable to any company who could hold onto you and a lot of hiring managers secretly know this.
They also know they're paying a lot of devs 80-150/hr who are hard working, don't slack off, are reliable, and follow best practices.
And they have an HR/Invoices department who would constantly harass them about paying that much for a dev, if they even approve it in the first place.
Ok, but in this case the contractor should make at least 2x as much the in-house staff, considering they're bringing all their own tools, paying for their own health insurance, paying their own taxes, and having a more flexible schedule.
And then there's the question of why hire a contractor in the first place if you already have a strong team of devs — why not just hire another full-timer? Most likely you're having trouble filling out your team or filling a crucial role. That would probably be worth a little extra to you.
Plus, there are tons of companies out there who don't need a full dev team of a dozen people, but know they could benefit a lot from hiring contractors for 3 months at a time for one-off projects. These companies are more than willing to pay a little extra to get a job done well on short notice.
FWIW, I charge $300 / hr as a mobile/full stack developer (and I'm based in TX). My clients are mostly startups. I have more work than I know what to do with, and have for quite a while.
Most of my inbound comes through referrals. I've been at this for about 8 years, so my referral network is pretty healthy. First few years were rough though!
In general, the real "trick" to a successful network (as least for me) is just to be friendly and do good work. Lots of coffee meetings, phone calls, and lunches. :)
Not at all. I've been at this for a while, so most of my work comes from previous clients or others in my network. It took a while to build that up, but now that it's in place, it's a pretty steady source of work.
Most people who are referred to me know what I charge, so there's not much haggling. People want results and I have a reputation for delivering them.
Agreed. $400/hr outside of SF Bay, 10 years ago, for CMS and e-commerce websites?? I've hired lots of devs and other agencies in the bay and that does not match my experience at all. For very niche stuff maybe. For freaking WordPress and Shopify, anything more than $175/hr and you are being robbed. For generic custom dev work (iOS, react, backed) $250/hr is near the top for very reputable studios.
People are charging $175/hr for WordPress? This makes me wonder what the hell have I been doing with myself for the past 8 years. My agency charges $50/hr for WordPress devs who know what they're doing. (My email is in my profile!)
As an Art Director we used three large agencies to cover needs, ranging $140-175/hr. Given this was a finance company, they didn't know creative as much. The issue I discovered was these agencies were inflating service hours. One example was the need to modify a four page powerpoint. Invoice came back as $6,800. So the issue wasn't rate, but durations..
Having worked with agencies through a client, I have seen their billing process. They might not have inflated hours.
Assuming you have a creative, a project manager, delivery manager, and a sales manager in the agency, each task/project has to go through each of their hands.
That's an hour each for the managers and how ever many hours for the actual work itself as the base delivery price. Then the internal back and forth between the delivery manager and the creative to insure that everything is "to spec". Then the project manager to report on status each day and the sales manager to take you to lunch and discuss the how amazing everything is with the project, and that the BEST people are working on it.
So 3-4 hours of work can turn into 20 hours of billing (plus expenses).
Thanks for this. It's true. Our main agency had a process of the Account Exec telling the Art Director who delegated to his team of designers. That is at least three people at varied costs.
Trying to nail this down can be a hair-pulling experience. I know estimations are a ridiculously hard thing to do, but that's kinda the reason I'm engaging them as an expert.
I also know they want all the work you can throw at them, but just getting a sense of whether this is a 1 hour or 5 hour gig so I can evaluate the ROI before briefing it in is impossible.
This is one of the things I want to address (my side-gig doing marketing consultancy) - one rate, whether that's strategy or design work, up to the client how to use it (and telling them to use someone else if not good value).
Can confirm. Im in Houston and do what you mention with said track record. I cant get 240/hr, but can get around 175-180 most of the time. I base my rate on 85% utilization of myself. meaning Im working 10 and a half months per year.
I interface with SAP quite often, but the name is a different initialization. I also do movie/tv scoring under the moniker Stupid American Pig. Its a juvenile name that I came up with 20 years ago in college, but Ive not bothered to come up with anything else.
As for the hourly rate, I would always accept more but have no real complaints. Getting back to the original post that made me comment, 240/hr for a freelance web designer seems unrealistically high, especially in Houston. I dont know the market well enough in other parts of the country though.
It's not that extreme. I was a "big data" consultant a couple of years ago and our bill-rate for gigs I went out on went as high as $200/hr at times. Our clients were all over the US, not just in the SV area, FWIW.
I'm not sure, exactly. Partly because A. that was a few years ago and I don't remember everything and B. our compensation there was a mixed model that included a base salary along with hourly "bonus" money for billable hours, which varied depending on whether the gig was onsite or remote, etc.
But suffice it to say, if I went out on a gig that was being billed at $200.0 / hr, I wasn't making anywhere close to $200.00 / hr personally.
That's not a custom dev rate, that's a you have a track record of doing something very niche and valuable and usually domain specific. I.e. you have a portfolio or set of recommendations that you delivered successful financial plug-ins for oil and gas ERP systems.