Comment by gexla | Hacker News Reader

Comment by gexla | Hacker News Reader

Sorry, you are not going to get away with it that easy. This is like going up to that hot girl you have been eyeballing and saying "I really want to go through the whole dating process because I really don't understand it, can we just skip all that and get straight to serious relationship?"

This question is nearly impossible to answer and a very personal decision. Nobody here can tell you how much you are worth. For example, am I doomed to crap rates just because I live in the Philippines? No (sorry danohuiginn!)

Figure out how much money you want to make and how many hours you want to work. Remember that you cannot get eight billable hours out of an eight hour day.

As a "consultant" you are running a business. Asking other people how much your rates should be is not a business question, that is a programmers question. You are asking like this is some sort of algorithm you can plug into your code. You need to tweak your mindset a bit.

Edit: How to get consulting work.

Build your brand and visibility. Pick a community (get a bonus for picking one frequented by paying clients) and establish yourself as an authority. Create an open source project which you can point to which shows you know what you are doing.

Network! The area in which I am has more work than there are people available yet there is likely no shortage of people who would love to break in. The reason for this paradox is that I only work with people in my network.

All the freelancers I know are overworked. Often any one of them need help and I can't help them because I am overworked as well. Get to know other developers who are freelancing and ask them if they know anyone who needs a hand.

It's all about that recognizable and trusted brand!

"Remember that you cannot get eight billable hours out of an eight hour day."

This is an extremely important point. When I was freelancing, I was surprised by just how much non-billable overhead time I had (at least 5-10 hours a week when working with 3 clients). To reduce overhead, work with as few clients as possible. But you'll run into dead time that way, since jobs don't start on a dime.

I know a guy who has freelanced for 5 years and kept meticulous records. He knows what he's doing, but says every year he tops out at about 60% of his time being billable. Make sure you factor that into your rate.

It's really easy to take your rate and multiply by 40, thinking that's your weekly salary. This is pretty much never the case.

Also, don't forget taxes.

Just curious since I haven't done freelancing yet... how do you determine what is billable vs. non-billable? If 60% of your time is billable then what constitutes the other 40%? I know part of it is looking for new work. What else?

Much of this is obvious. Some of it could go either way though. The obvious stuff is regular business tasks such as billing, marketing, distractions (turn off that IM!) dealing with email and things like that. It all really adds up.

In practice this is almost always easy to determine. For any given day, you log the hours against a client that you did something for the client. "Something" doesn't always equal coding - it could be meetings, setting stuff up, responding to e-mails, etc. For any given hour you bill, just ask yourself "If a contractor charged me for this hour of activity, would it make me - as a customer - freak out?" If the answer is yes, don't bill.

Also, I will often not bill some hours for clients that have given me a lot of work over the years.

It depends on how you bill (hourly vs day vs project) -- but there are many things that are obviously non-billable, because they are not for any client (e.g. doing your taxes/administrative for your business, buying office supplies, and every other little thing that isn't directly tied to the end product you're providing to clients).

Another big time sink (that I didn't realize) is all the work that's involved with even setting up a contract or freelance relationship. Depending on the client, you can spend weeks waiting / working out details before the project begins. This is why longer projects are more valuable (and can be billed at a lower rate) -- since there's always some fixed overhead per project.

In addition to what the others mentioned, there's also paperwork (such as my nemesis, filing); the time you spend running to OfficeMax to buy a new chair or a box of paper; the time spent looking for medical insurance (and being aghast at what it costs for an individual); "casual" contacts that sometimes can be transformed into business networking but don't, always; doing your invoicing and bookkeeping (most freelancers I know are terrible at this). And that's just off the top of my head.

I spent years as a sysop of the CompuServe Computer Consultant's forum. I'm kind of familiar with this stuff. <g>

"every year he tops out at about 60% of his time being billable"

Another general guideline is to estimate 1,000 hours of billable work (which makes it easy to calculate an hourly rate for some amount of desired annual earnings).

"Also, don't forget taxes."

Definitely don't forget the taxes, especially estimated payments. Consider that 40% of that money, once deposited, isn't yours and is untouchable, and you'll be better off.

All the freelancers I know are overworked. Often any one of them need help and I can't help them because I am overworked as well.

Not to be obtuse, but if everyone is overworked, why don't they charge a little bit more so that there is less demand and therefore a more reasonable workload?

Is there perhaps a fixed ceiling above which no one will pay? Or do clients get angry if you keep changing your prices to meet market conditions? Or do companies in your line of work only hire consultants for projects in crisis, such that the only work available consists of high work loads over short periods of time?

Sure, they probably need to. I probably need to also. I'm actually somewhat new to freelancing so I am still doing a lot of adjusting.

Perhaps a lot of freelancers have a hard time asking for higher rates. Pricing is a difficult subject.

   Remember that you cannot get eight billable hours out of an eight hour day.

You can (and do) if you go on-site, and you can if you actually work eight hours for a single client in any capacity.

You can't bill for doing your office paperwork, promotion, eating lunch and such, but that's not part of an 8 hour "work" day (like your commute isn't part of your work day either).

Depending on the client, you can bill for commute (or travel) time. Make sure this is clear though before you start doing it, you don't want to create ill will.

Sure, some are able to get a better ratio of billable to non billable hours than others. Dealing with fewer clients in one day helps this. The point still remains. You have to take the down time to maintain your business at some point and you have to plan for that when you are figuring out what you need to keep food on the table.

That is very true. However, I would suggest that anyone in that position would not include this necessary legwork within their "eight hours a day." If you have several hours of non billable maintenance to do, it should not be a central part of your work day, which should be entirely billable.

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