Anyone who considers a future (or part of one) in consulting or contracting owes it to themselves to find a copy of Gerald Weinberg's Secrets of Consulting: A Guide to Giving and Getting Advice Successfuly. Jerry has been coaching consultants for decades, and has some solid advice on how to establish a price for your time, and how to approach negotiations with clients. (Hint: there's a lot more to the negotiation than settling on a rate.)

Establishing a rate (or a family of rates) can be hard. Some of us weren't raised to think in terms of our time having negotiable value. There are a couple of rules of thumb. One is pretty straightforward: If your (rate x estimate) is higher than what it would cost them to do it in-house, you probably won't get the job.

To figure out their in-house cost, you'll need to know the typical "fully burdened" cost of their engineers. (Fully burdened is salary + the company's portion on benefits + the cost of equipment + the cost of the floor space and furniture). The rules of thumb for this change depending on a number of factors, but a good starting estimate is that burdened cost = 2 * salary. So if you're "competing" against an in-house developer who makes, say, 50K a year, assume that their burdened cost is 100K, or (100K/2000 hours) = $50/hour. If your assignment will be a short one, it's common to charge slighly higher rate. If you have specific expertise that they don't, and that isn't in great supply in the market, you can set higher rates.

Ask around for the area specific region you're in. Rates vary widely. Even with CGI work, rates will vary depending on the degree of back-end SQL skills needed.

In reply to Re: Freelance and Pricing by dws
in thread Freelance and Pricing by bmhm

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