Keep losing freelance work
I have a day job, but I'm looking to break into doing some freelance programming. However, I keep losing potential jobs because my price is too high. I have been saying my price is $50 an hour, which I don't think is unreasonable considering my experience. Should I lower my rate, is there somewhere I should be looking for work?
18 comments
You could consider raising it. I did some freelance work several years ago and offered my services for what I thought was a very reasonable price-- $50/hour. I was losing a lot of jobs at that rate.
A friend told me how his father had been in a similar situation. He was offering a superior service that was, in many cases, lower than what the prospects were already paying. After being turned down repeatedly he finally asked why. He was told that he couldn't possibly be able to deliver the quality promised for the price he was asking. The low price created a perception of lower quality-- lower than what people were willing to accept for that price. So, they'd tell him it was too expensive or they just weren't interested.
I doubled my rate and not only got more work but better work. You could try it. The worst that will happen is people will still say no and you can always let them negotiate down a bit. Still, like others have said, it depends on the going rate where you're doing work.
A friend told me how his father had been in a similar situation. He was offering a superior service that was, in many cases, lower than what the prospects were already paying. After being turned down repeatedly he finally asked why. He was told that he couldn't possibly be able to deliver the quality promised for the price he was asking. The low price created a perception of lower quality-- lower than what people were willing to accept for that price. So, they'd tell him it was too expensive or they just weren't interested.
I doubled my rate and not only got more work but better work. You could try it. The worst that will happen is people will still say no and you can always let them negotiate down a bit. Still, like others have said, it depends on the going rate where you're doing work.
"After being turned down repeatedly he finally asked why."
This is the key. Don't guess. Find out.
Notice that his father didn't solve his problem until he actually found out what it was. Why don't you do the same?
This is the key. Don't guess. Find out.
Notice that his father didn't solve his problem until he actually found out what it was. Why don't you do the same?
You're right, and I think that's exactly what the submitter tried to do by asking here. Still, it's probably a better question for the people turning down the work.
Wow, harsh.
Hardly, its good advice.
I would add thought, that when asking remember that the person may not be telling the truth. They may actually want to hide something if they are doing it out of some personal prejudice they don't want to admit or because they have already made up their minds about the winner but are going through a bidding process for show.
Also, they may think they are telling the truth but actually being influenced by something they don't realize. For instnace, if the poster were unusually young they may feel he is immature or lacking experience even in the face of evidence to the contrary.
One way to at least mitigate this is to solicit opinons from many people that originally turned him down.
I would add thought, that when asking remember that the person may not be telling the truth. They may actually want to hide something if they are doing it out of some personal prejudice they don't want to admit or because they have already made up their minds about the winner but are going through a bidding process for show.
Also, they may think they are telling the truth but actually being influenced by something they don't realize. For instnace, if the poster were unusually young they may feel he is immature or lacking experience even in the face of evidence to the contrary.
One way to at least mitigate this is to solicit opinons from many people that originally turned him down.
A lot of people like things as cheap as they can get it, but I've noticed a lot of small business owners have learned that you get what you pay for.
When I was freelancing on the side, I used to think that $50/hour was on the high side, but it's actually on the low side. You should charge at least $75/h if not $100/h.
Don't believe me? Consider: Barely anyone works 40h/week of billable time. Most full-time freelancers bill 4-5h/day and do non-billable work the rest of the time. That's 20-30h/week of billable time about 50 weeks of the year. Say you bill 25h/week for 50 weeks, and you want to make about $80k. That comes to $64/h, and that doesn't even account for your expenses!
Here are some resources on freelance benchmarks and rates.
http://www.freshbooks.com/reportcards/all-industries.php
http://freelanceswitch.com/rates/
(Disclaimer: I work for FreshBooks.)
Don't believe me? Consider: Barely anyone works 40h/week of billable time. Most full-time freelancers bill 4-5h/day and do non-billable work the rest of the time. That's 20-30h/week of billable time about 50 weeks of the year. Say you bill 25h/week for 50 weeks, and you want to make about $80k. That comes to $64/h, and that doesn't even account for your expenses!
Here are some resources on freelance benchmarks and rates.
http://www.freshbooks.com/reportcards/all-industries.php
http://freelanceswitch.com/rates/
(Disclaimer: I work for FreshBooks.)
I'm a freshbooks customer who's also an ex full time freelancer. I agree with sunir. If you can follow through on your work, you're ahead of the game. Consider your target demographic and how they consider paying for things. I do mostly systems administration and web programming these days, but I have a strong IT background, if I have a client that I want who's on the fence about if they need me, I ask about their monthly costs. Usually they're paying way too much for telephone, internet, email etc. I can usually get them to leverage my price against a year of overpaying for services, but that's just part my pitch. Which is a slightly different topic.
The point is, you're worth spending the money and if they're paying you enough they're worth putting in extra effort. It's mutually beneficial.
The point is, you're worth spending the money and if they're paying you enough they're worth putting in extra effort. It's mutually beneficial.
There are a ton of variables here. The only data point I can add is that in SF web/interactive work $125 is a pretty fair average rate.
Some of the variables to consider. 1. Location - NY and SF are going to be more expensive. 2. Type of work. HTML is going to be lower generally the C for embedded devices. 3. Length of contract. My rate could go down if you hired me for more than 3-4 months work. (the more time you have to spend looking for work the higher the premium) 4. The Client. Large corporations are going to spend more money generally then a local restaurant. Note you're not going to get a lot of large clients working only part time.
Some of the variables to consider. 1. Location - NY and SF are going to be more expensive. 2. Type of work. HTML is going to be lower generally the C for embedded devices. 3. Length of contract. My rate could go down if you hired me for more than 3-4 months work. (the more time you have to spend looking for work the higher the premium) 4. The Client. Large corporations are going to spend more money generally then a local restaurant. Note you're not going to get a lot of large clients working only part time.
if your "freelancing" boils down to bidding on stuff on freelance sites, $50 is way too high.
if your "freelancing" boils down to being referred in real life by past clients, $50 is pretty low.
if your "freelancing" boils down to being referred in real life by past clients, $50 is pretty low.
I quote per job, rather than tell them my rate is $100/hour. These are "billable" hours though, not actual hours. Time spent corresponding, etc, doesn't get factored in. So the effective rate is a bit lower.
Most of my projects tend to be as a subcontractor to other developers/designers, so the requirements are very well-defined. If you work directly with clients and quote the whole job you need to make sure the scope is WELL defined and you fully understand the client's expectations or you could get burned with changes and out of scope aspects.
All of my work comes from referrals or directly from conversations with acquiantences.
Most of my projects tend to be as a subcontractor to other developers/designers, so the requirements are very well-defined. If you work directly with clients and quote the whole job you need to make sure the scope is WELL defined and you fully understand the client's expectations or you could get burned with changes and out of scope aspects.
All of my work comes from referrals or directly from conversations with acquiantences.
Where are you located? In Bangladesh it's probably on the high side, but in Copenhagen it's certainly on the low side.
My best advice is to get involved in your (platform here) local user groups. Not only are they a great source for networking, it's a target-rich environment and projects expect to pay a reasonable rate for freelancers.
You don't have to wait for a meeting - most groups have a mailing list / discussion group. You can introduce yourself and tell them openly that you're looking for work. You can also sign up for (your platform here) groups on LinkedIn. I signed-up for a few and received several "cold calls" for work within a week.
You don't have to wait for a meeting - most groups have a mailing list / discussion group. You can introduce yourself and tell them openly that you're looking for work. You can also sign up for (your platform here) groups on LinkedIn. I signed-up for a few and received several "cold calls" for work within a week.
As a small business owner of what is essentially a one-man show, I side with the folks who say that you should raise your rate. Pricing has a way of setting expectations and providing a perception of quality. If you bill half as much as anyone else, the question on anyone's mind is going to be, "What's the catch?"
Sometimes there isn't a catch, and sometimes there is. Unfortunately, in my experience it is a pretty safe bet with most people I could conceivably subcontract my work to that if they are naive enough to work for an obscenely low rate, they are not up to the task because they are also naive in other ways. I hate that this prejudice also hurts people who are just legitimately happy with a lower rate, but that's just how it goes.
Sometimes there isn't a catch, and sometimes there is. Unfortunately, in my experience it is a pretty safe bet with most people I could conceivably subcontract my work to that if they are naive enough to work for an obscenely low rate, they are not up to the task because they are also naive in other ways. I hate that this prejudice also hurts people who are just legitimately happy with a lower rate, but that's just how it goes.
You're price isn't too high if your work is high quality. If anything you can raise it.
I've found its often better to quote per job than by the hour, especially for new clients. $50/hour is cheap if you get a lot done per hour, but expensive if you don't.
I've found its often better to quote per job than by the hour, especially for new clients. $50/hour is cheap if you get a lot done per hour, but expensive if you don't.
In my experience quoting per job will lead to a very bad experience for either you or the customer, and possibly both. By quoting per hour, you will be payed for your work and the customer will only pay for the work done.
Give both. "My rate is $X and I estimate it will take at least Y hours." That way they get an idea of what it will cost in total and also how much it will cost them to make changes.
What I meant exactly is, give an estimate and an hour quote. Let the client know that if you complete the project in less time, you will charge less and vice versa. I've found that in all projects specs change and things take less or more time than estimated. Nothing sucks more than working free because you underestimated a task. Also if you have a fixed price, you will invariantly be motivated to take the quick and dirty solutions everytime. This will not lead to success for the project.
I think knowing your own hourly rate is necessary to benchmark your own tasks and priorities. But yeah, in my experience clients generally want an estimate up front so my rate is more of an internal tool. The art of it all comes from being able to accurately predict the amount of time for the project that will used for the estimate based on my rate, which comes from experience.
Sure, give an estimate, but then stay in close contact - if you're slipping, alert the client as soon as possible.
The keys to billing per project are clearly defined specifications, signed contracts, and down payments. Give your hourly rate in addition for work that goes beyond the spec.
Both you and your client benefit from knowing exactly what they're getting and for exactly how much. Plus, a concrete spec and price will help them get the expenditure approved, when applicable.
Both you and your client benefit from knowing exactly what they're getting and for exactly how much. Plus, a concrete spec and price will help them get the expenditure approved, when applicable.
Here in the States, I charge $60/hour doing mostly HTML monkeying for a good friend. If I'm not doing friendly or non-profit work, I'll charge at least $75 for non-programming work, and upwards of $100 if it requires actual coding.
I couldn't see where you mention how you are looking for work. The various websites have never worked for me. Too much competition from low living cost places.
In my experience if potential clients know that you are working at a day job, then they will try to beat you down. So better not to tell them that.
The best rates come from person-to-person contact that comes from networking. The more you understand the clients' area the business the more you can charge. Charging by the project also works well, especially when you translate that into a value proposition that is appealing to your prospective client.
In my experience if potential clients know that you are working at a day job, then they will try to beat you down. So better not to tell them that.
The best rates come from person-to-person contact that comes from networking. The more you understand the clients' area the business the more you can charge. Charging by the project also works well, especially when you translate that into a value proposition that is appealing to your prospective client.
If you are going to use a freelancing site like rentacoder.com you'll finish working $10/hour until you get good feedback. But I'm not sure if you got good feedback your rate will raise. The median is $20/hour for all freelancers in Odesk.com (which is much more better than rentacoder.com)
A solution that work: build something and make it open source and free.
For example build a Wordpress template (a premuim one) add SUPER functionnalities, good silk design...
People who will love your design, will hire you. You'll get a lot of requests, then choose the best.
A solution that work: build something and make it open source and free.
For example build a Wordpress template (a premuim one) add SUPER functionnalities, good silk design...
People who will love your design, will hire you. You'll get a lot of requests, then choose the best.
Keep your hourly price as high as possible. Like other people have pointed out it tells the client that you're good, but it also filters out dead-beat clients that only care about price.
Depends where you are, and what you're doing. That seems like a reasonable rate to me for a lot of things, but it's low in the bay area, and maybe it's high for other places.
I'm in New York, everything is expensive so I thought it was pretty reasonable. For example, one job I gave an estimate on, would easily be a 100 hour job. So I gave an estimate of $5000. They wrote back to me and said they got another offer for $1500.
I'll defintely try raising my price.
Any thoughts on good places to look for work. I have been primarily using Craigslist. I've been getting a good amount of replies. I do not like the sites that make you bid for the work. Seems like that requires a lot of effort, for low prices.
I'll defintely try raising my price.
Any thoughts on good places to look for work. I have been primarily using Craigslist. I've been getting a good amount of replies. I do not like the sites that make you bid for the work. Seems like that requires a lot of effort, for low prices.
Craigslist is practically the bottom of the barrel for freelancing.
There's a ton of other services and non-traditional sources including tech blogs like Techcrunch and GigaOm (sounds nuts, but biz people go through them).
There's a ton of other services and non-traditional sources including tech blogs like Techcrunch and GigaOm (sounds nuts, but biz people go through them).
In NYC, $50 is definitely too low, I think. Of course you didn't say what it is you're doing (reworking PHP scripts, or writing financial models in OCaml, or whatever), which makes a difference too.
i'm curious, what kind of software are you developing / what kind of companies are you serving as a freelancer?
Mostly PHP using CakePHP and some Python.
Quit charging per hour. Start charging on a per project basis.
In the long run - you'll make more money. And will find clients who won't quibble if you take an hour more to get the job done. No time pressure - better output - and better pay.
In the long run - you'll make more money. And will find clients who won't quibble if you take an hour more to get the job done. No time pressure - better output - and better pay.
As a Norwegian developer, $50 sounds incredibly low. You can't get a lot of contractors to do something for you for under $150. But the cost of living is higher in the metropolitan areas here than in the U.S.
The rule i usually use is take your yearly salary and divide by 1000 (not 100) and add another 10% to 15% to it.
That does not sound right.
100,000 / 100 * 1.15 = 1150$
At 1/4 time 1150$ * 20hours a week * 25weeks = 575,000.
PS: I would say current salary / 500 for part time work ( < 20 hours a week for less than 1 month) and around salary / 1000 for full time work for 6+ months. With a sliding scale between those numbers.
100,000 / 100 * 1.15 = 1150$
At 1/4 time 1150$ * 20hours a week * 25weeks = 575,000.
PS: I would say current salary / 500 for part time work ( < 20 hours a week for less than 1 month) and around salary / 1000 for full time work for 6+ months. With a sliding scale between those numbers.
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I think you mean divide by 1000.
or double your hourly rate + 10-15%
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