> a standard hourly rate for software developers
Maybe in SF or NYC, but even then I don't think $125/hr or $260K/year at 40 hours/week is "standard" even there.
Maybe in SF or NYC, but even then I don't think $125/hr or $260K/year at 40 hours/week is "standard" even there.
1. You're not differentiating between the rate that's charged and the rate that's paid to employees. I am billed out at $185/hr. I make a small fraction of that as an employee, even after benefits.
2. You're not including any time off - you're figuring 40.0 hours for 52 weeks straight which is ridiculous. US employees are much more likely to be 48-50 weeks. Europeans are at what, 20 weeks a year or something now? (I jest)
3. For consultants (who are not employees), if you want to bill 40.0 hours you're going to be working 60-70 when including all the marketing and admin work, or you're outsourcing that which eats into your base rate considerably.
4. When I was consulting a big reason why was freedom and time off. I billed $125/hr but made probably $50k/yr because I only worked 25-30 hours a week all in. That included all my marketing, proposals, billing, chasing invoices, and actual billed work. It was great seeing a direct financial impact to the amount of work I did, but also sucked because if you have no motivation for more than a few days that impacts you financially for weeks.
If you just closed a $40M round of VC financing, $500/hr for a 1-week project ($20k?) from someone you know isn't crazy. If you're a bootstrapped company and that's 6 weeks of revenue it's not as easy of a decision even if you think the ROI is there.