Forum Moderators: coopster
at first sight $35 seems on the low side.
regards
Henry
I charge £30 an hour which seems the going rate around me, especially as people seem to find it very hard to find good PHP developers in my area.
if they need you and you can do a good job then you're worth it. If you under-sell i find people take advantage.
ta,
hughie
The main thing is that the hourly wage sounds pretty good, but you're probably leaving a lot out of the calculation.
Let's say you're used to making, $20 per hour at your regular job. You decide to price yourself at $35 to make a little extra. The truth is, by the time it's all said and done, you may find that you were better off at the $20/hour where you were getting paid for every hour you work (including administrative tasks and coffee breaks or whatever), four weeks of vacation and sick leave, and someone was putting matching contributions into your 401K (or deuxieme pilier in CH, not sure if there's a UK equivalent) and so on. When you add all that in, that $20/hour is more like $25 hour or more (not sure what the "labor burden" is in the UK, but generally figured at 20% to 30% in the US).
I've found that more often than not I have in the past underpriced myself on freelance work. I have no idea if I'm under- or over-pricing based on the market, but I base that statement on an analysis of what I would have made doing other things. No point working my butt off to make less than I would elsewhere.
One main stumbling block is something that relates to the structure of the universe and the nature of time... If you are giving firm estimates, the room for error in one direction is finite, but in the other direction it is infinite. In other words, if you estimate that something will take 20 hours, you could with the help of little elves that do your work at night be an absolute max of 20 hours over (realistically, you are probably a max of 10 hours over and that will be very rare). You could easily, though, be 10 or 20 hours under, even 50 hours under if things go tragically wrong. So if you do two jobs, both bid based on 20 hours, and they actually take you
- 10 hours (off by a factor of 2, probably the max you'll be off this direction ever)
- 50 hours (off by a factor of 2.5, hopefully the max you'll ever be off in this direction)
Your error rate is similar on both ends (a factor of 2 to 2.5), but on an absolute scale, you are now 20 hours behind. Your $35 is now $23.
Then you spent all that time with the proposal, figuring out the scope and specs for the project, dealing with odds and ends. Whoops, now you're down under $20/hour. You could have just done your regular $20/hour work plus benefits and you'd be much better off at that point. One more of those jobs that's off by a factor of 2.5 in the wrong direction, and you might as well go back to flipping burgers, especially if they have sick pay and vacation pay there.
The shorter the job, the higher you need to price. It's easy to by 10 hours over on a 10 hour job, but impossible to be 10 hours under. The same is stil true if being paid on a straight hourly basis. You need to realize that many of your hours will not be billable. The proportion of non-billable hours will generally be higher for 1) shorter jobs and 2) highly conceptual or vaguely defined jobs. You need to price accordingly.
