Freelance Rates - What Should I Charge?

A colleague asks "Are there any resources that help freelance developers determine a fair rate to charge for their time?"

The "fair" rate in an efficient market is, by definition, the rate that a willing client will pay a willing contractor. Determining the fair rate for labor is no different than determining the fair rate for a movie ticket or martini in Manhattan.

The best resource here is your eyes and ears. If you are getting more business than you can handle, then your rate is too low. If you are getting turned down for jobs for which you are qualified, then your rate is probably too high. A client or employer won't tell you if the reason you were not chosen is illegal, such as prejudice. But they should be willing to answer direct questions such as "Was my hourly rate the deciding factor?" or "What were you looking for in the portfolio of an applicant?"

Your real question might be "How do I maximize my income as a contractor?" This question refers to the elasticity of demand for your particular skill. If you charge $100/hr, you might be employed less often and therefore make less income than if you charge $80/hr. On the other hand, your free time has some value to you, so you might be happy working fewer hours at a higher rate if you goal is, to some extent, to maximize your hourly rate (or similarly, to maximize your income in, say, 1000 hours of consulting a year).

Regardless, you can usually maximize your chances for contracts and especially higher paying contracts in the usual ways: * Promote yourself * Upgrade your skills * Improve your portfolio

I won't go into details on the above here, but, for example, promoting yourself might entail sending out more resumes, putting your resume on a job site such as craigslist.com, attending trade shows, building a web site, etc. Upgrading your skills might mean taking a course or getting a certification. And improving your portfolio might entail doing some low-paying or volunteer jobs to gain entry into the market. If your question is "How can I charge high rates without feeling guilty or evil?," the answer is easy: Charge what the market will bear. Send any excess to your favorite charity. You can better decide what to do with the money than the client can.

If the question is "What rate can I charge without the client expecting more of me than I can deliver?," you are also in a common boat. The answer is that if the client hires you at $x/hr, she thinks you're worth it. If you prove not to be worth it, she will fire you. If you don't handle rejection well, or if you aren't sure (the client seems ambivalent), ask the client if she is happy with your performance. If not, you can offer to bill the client for less hours than you worked. This preserves the ilusion that you are worth the same $x/hr in the long run, even if in the short run you need to get up to speed or bring more focus to your work. Another way to preserve an illusion of a high hourly rate while giving yourself time to get up to speed is to offer a flat bid on a project. If you can do it for $1000, the client doesn't care if it takes you one hour or 100 hours. That said, flat bids can be fraught with hazards, so they shouldn't be prepared lightly. That's another topic I'll save for another day.

Top 17 Tips to Stop Procrastinating

Procrastination need not be a lifestyle or permament condition. Simple exercises can reduce your procrastinating tendencies and improve both your productivity and outlook. Here are my top 17 tips for procrastinators:

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Freelance Rates - What Should I Charge?

Top 17 Tips to Stop Procrastinating