contractor rates

[Jesse Cooke]

Hey all, I have a question about rates,

What's your low and high rates for Rails work, and for Ruby (non-Rails) work? Doesn't have to be exact if you don't want others to know.

I'm just wondering because I've recently started out on my own and want to establish a good rate, but don't want to consistently ask for too much money, or not enough.

Just today I submitted a rate but was twice as much as the gig was willing to offer, and I was already much lower than the rate I'd like to establish.

thanks, and have a great turkey day!

Jesse

ps: You might enjoy this Ruby project: http://turkeytracker.com

------------------------------------------
Jesse Cooke
N-tier Engineer
http://jc00ke.com
tel: 662.4jc00ke (662.452.0053)

Be sure to sign up for private beta access to our latest project: http://springee.com

[Erik Hollensbe]

On 11/26/2009 1:36 AM, Jesse Cooke wrote:
> Hey all, I have a question about rates,
> What's your low and high rates for Rails work, and for Ruby
> (non-Rails) work? Doesn't have to be exact if you don't want others to
> know.
> I'm just wondering because I've recently started out on my own and
> want to establish a good rate, but don't want to consistently ask for
> too much money, or not enough.
> Just today I submitted a rate but was twice as much as the gig was
> willing to offer, and I was already much lower than the rate I'd like
> to establish.
>

What was the work, precisely? The environment has less to do with the
rate than what you'll be paid to do with it. E.g., a semi-static CMS
from scratch+plugins is going to yield a lot less than quality
cross-domain porting work or a distributed build system.

-Erik

[Moxley Stratton]

On Wed, Nov 25, 2009 at 10:36 PM, Jesse Cooke <je...@jc00ke.com> wrote:

Hey all, I have a question about rates,

What's your low and high rates for Rails work, and for Ruby (non-Rails) work? Doesn't have to be exact if you don't want others to know.

I'm just wondering because I've recently started out on my own and want to establish a good rate, but don't want to consistently ask for too much money, or not enough.

Just today I submitted a rate but was twice as much as the gig was willing to offer, and I was already much lower than the rate I'd like to establish.

Developers tend to conceal their rates, and I'm not going to reveal mine, but I've found that the established consulting firms charge triple or quadruple what a solid independent might charge. For the client who expects to pay half your rate, refer them to those firms, and watch them turn white when they see they charge. Don't be apologetic for your rate. If you ask twice what the client expects, it's because you're worth twice as much, not because you're too expensive.

I don't think it is generally a good idea to adjust your rate to the type of work involved. Even if the types of work are from completely different fields, like data entry versus software development. I expect to be paid my software developer rate, no matter what I'm doing. If a client asks you what your hourly rate is for straight ruby versus ruby on rails, I would say, "My rate is $X. Period." If the technology is new to you and it will require a ramp-up period to learn, find another developer who already knows the technology and share the work with him. That's a great way to learn.

Moxley

[John Wilger]

On Nov 26, 2009, at 8:34 AM, Moxley Stratton

<moxley....@gmail.com> wrote:
> Don't be apologetic for your rate. If you ask twice what the client
> expects, it's because you're worth twice as much, not because you're
> too expensive.
>
> I don't think it is generally a good idea to adjust your rate to the
> type of work involved. Even if the types of work are from completely
> different fields, like data entry versus software development. I
> expect to be paid my software developer rate, no matter what I'm
> doing. If a client asks you what your hourly rate is for straight
> ruby versus ruby on rails, I would say, "My rate is $X. Period."

Well said, and I agree completely. When I do independent consulting,
I'll sometimes discount a rate slightly if I really want to work on a
particular project (because money isn't the only compensation that
counts) or for a long-term contract or retainer, but it's not much and
the client is aware that it is a discount and exactly why they are
getting it.

In general, I'd say that if you are an expert in your field (roughly
10 yrs experience, give or take) and are working on a 1099 basis, a
base rate of at least $100/hr is what I would expect to pay you, and I
wouldn't be surprised by amounts up to $200/hr in some cases. More
than that, and you'd better have skills I can't get anywhere else.
Charge less than that, and I'm likely not interested in you (at the
expert level—if I just need a junior-level contract developer, it's a
different story.)

--
Regards,
John Wilger

[Lennon Day-Reynolds]

I've never really been a fan of the cloak of secrecy around consulting rates -- it puts the power in the hands of the clients, rather than the developers, and incentivizes us to pick rates based on what we think other people might charge, rather than what we're worth.

I pick my rates based on simple formula: if working full time, take my current effective hourly rate (salary / 2000 hours), triple it, and round up to the nearest $10 increment. If I'm not working full time, I do the same math based on my last gig.

In recent years, that has made my rate anywhere from $90-130 per hour. I don't vary the rate based on what kind of tech I'm using -- the variance comes in how quickly I can finish the job.

Regardless, I agree with the previous assertions that you shouldn't haggle, or deal with low-ball offers. Know what you're worth, and stick by your rates. Doing otherwise just encourages clients to pit would-be consultants against each other in a race to the bottom.

-Lennon

On Nov 26, 2009 8:34 AM, "Moxley Stratton" <moxley....@gmail.com> wrote:

On Wed, Nov 25, 2009 at 10:36 PM, Jesse Cooke <je...@jc00ke.com> wrote:

> > Hey all, I have a question about rates, > What's your low and high rates for Rails work, and for...

Developers tend to conceal their rates, and I'm not going to reveal mine, but I've found that the established consulting firms charge triple or quadruple what a solid independent might charge. For the client who expects to pay half your rate, refer them to those firms, and watch them turn white when they see they charge. Don't be apologetic for your rate. If you ask twice what the client expects, it's because you're worth twice as much, not because you're too expensive.

I don't think it is generally a good idea to adjust your rate to the type of work involved. Even if the types of work are from completely different fields, like data entry versus software development. I expect to be paid my software developer rate, no matter what I'm doing. If a client asks you what your hourly rate is for straight ruby versus ruby on rails, I would say, "My rate is $X. Period." If the technology is new to you and it will require a ramp-up period to learn, find another developer who already knows the technology and share the work with him. That's a great way to learn.

Moxley

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[Jesse Cooke]

I really appreciate the responses and validation on the thoughts I had on the subject. The rate I'm trying to establish is right along with what you're all suggesting. My "discounted" rate is for friends & non-profits, and is still higher (by a lot) than what was offered in this possible contractor position. You've all corroborated what a friend of mine, a non-technical business consultant, was saying about the rates I should charge.

Thanks, and have a Happy Thanksgiving!

------------------------------------------
Jesse Cooke
N-tier Engineer
http://jc00ke.com
tel: 662.4jc00ke (662.452.0053)

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[Ammon Christiansen]

This thread has gone in the direction of what 10 years experience developers are worth and that sounds about right.  I'm considering doing some contract work on the side or during a 1-3 month vacation to see how it would work for me to consider contract work as a full-time option.  I'm curious, however, what a 2-3year experienced Ruby/Rails/JS/CSS developers should charge - 50-60/hr? 

With that experience grade is it common for clients to trust you to telecommute or are you more limited to local work?  (Or does it just depend on how well you sell yourself to potential clients?)

 

And do some of you do contract work based on a specified full-project contract price or is it still based on a rate per hour?

[Bill Burcham]

What John Wilger said:

I'll sometimes discount a rate slightly if I really want to work on a particular project (because money isn't the only compensation that counts) or for a long-term contract or retainer, but it's not much and the client is aware that it is a discount and exactly why they are getting it.

Is really good advice. It's such good advice that I'd recommend explicitly listing your "regular" price in all contracts and noting the discount and reason for the discount. This comes into play with repeat clients. When it's time for a follow-on contract is puts you in a better position to bargain for your "regular" (higher) rate.

Lennon Day-Reynolds market-based calculation is apt. We could argue the 3x multiplier (I've heard 2x cited often) but in general I think that puts you in the ballpark.

On the other hand. We should be specific about whether we are talking staff augmentation, expert consulting or product delivery here. The 2x-3x salary multiple is a rule of thumb for staff augmentation only. It makes sense for folks renting themselves out as "programmers" on an hourly basis. It makes sense to clients because those clients are familiar with the skill set since they have employees or other consultants with similar skill-sets. 

You're worth more per hour as a consultant (than as an employee) because you pay your own Social Security, Insurance, vacation etc but also because of soft issues like your attitude (versus an employee) and the employers attitude about cutting you loose on short notice if needed. Beyond those simple economic realities your rate will be dictated by your marketability, sales and negotiation ski11z.

Staff augmentation is different from what John Wilger is talking about when he mentions "skills I can't get anywhere else". Forgive me if I'm coining terms here but when I say "expert consulting" I mean folks who bring more specialized (narrower, deeper or more obscure) skill-sets. In that case the client may not have anybody on staff with those skills and may not have experience hiring for them. Examples I'm thinking of here might be "database performance expert", "Internet security expert", "HIPAA consultant". In those cases there may be no good analogue between an employee salary and a consulting rate simply because there are fewer employees dedicated to those (more focused) domains.

Another thing that greatly affects consulting rates, even for staff augmentation, is whether you are doing your own sales or relying on someone else to do it. I've seen "body shops" offering 1099 employees (subcontractors) $60/hr for Rails work in Portland. Compare that to the $90-$130 that Lennon Day-Reynolds cites. You will not make that higher rate working as a subcontractor. You gotta eliminate the middle-man. Eliminating the middle-man means going out and finding your own clients.

Moxley Stratton was right on when he said "don't be apologetic for your rate". Imagine that there actually is a "true market value" for your time. If so, isn't it also true that a significant portion of the prospects will think that's too expensive? That means if you're never hearing "no" then you are underpricing.