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Comment by tdehnel | Hacker News Reader

It used to be $225/hr. But I don’t have an hourly rate anymore and I basically never will.

You need to understand that as a contractor clients value more than just your time and the work you do. They value flexibility in staffing, getting an outsider’s opinion, their own time, working with a true expert, and making progress on projects which they can show off to their boss.

That’s why for all my work I scope project fees plus monthly retainers. The retainers are use it or lose it. Then I focus on delivering the best possible experience for my clients.

By switching to this model I do about 3x my previous earnings. And my clients are happy (I haven’t lost one yet).

It doesn’t make sense to become a contractor just to remain a wage slave.

(Before all the “I can’t do this because my situation is different”: You are full of it. Anyone can do this.)

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Can you describe the conditions of the retainer? Is there any quantity of work included? What benefit it gives to the client on retainer, compared to new client that contacted you?

THIS. If you're not charging per project, you're a salaried employee, only without the guarantees and protections given to one.

If you’re selling your time, you’re a salaried employee. The project fee will, in the end, also just account for the time you need to finish the project + some safety buffer. You’re basically just being both your boss, who would usually transform a client payment to savings and your salary, and you the employee.

> project fees plus monthly retainers

I am new to the contractors game, could you elaborate a bit more on what that means?

Do you charge hourly + some monthly flat rate? Is it for short term contracts?

So the retainers are subtracted from the project fee?

I've been out of the race for about 7 years but had this exact same realization and agree with your position 100%.

Hi, some people need health insurance for themselves and their family, a retirement plan, and predictable financial stability in their lives.

> You are full of it. Anyone can do this.

Your part to whole fallacy aside, in the real world, there are different constraints on people and family units other than trying to make the most amount of money all the time.

To be clear, contractors charge a higher rate exactly because of what you describe. If you make $50/hr as an employee, you'll need at least $100/hr to pay for all the overhead with insurance, accountants, self-employment taxes, FICA, etc. These costs are mostly invisible in bigger orgs.

It may seem like contractor wages are greedy, but know that companies are willing to pay good money for domain expertise. Especially with all the friction of hiring a new full time employee.

That's not how taxes work at all..

It's not just taxes, though. It's the difference between salary and what's called Fully Burdened Labor Costs.

Say you're comparing eg. a FTE with $115k salary, and 4 weeks vacation. Naively, a contractor working those hours is 115 / 48 weeks / 48 hours = $60/hr for the same salary.

But the employer is also paying out payroll taxes, insurance, office space/supply expenses, retirement plans (401k) - this typically adds up to 25-30% on top of the base salary.

Meanwhile, the contractor also isn't expecting their position to be a long-term gig, and (at least if you're not at an agency) also is managing a business so needs to account for business overhead (legal/accounting) and time spent lining up more business, which is un-billable. If they worked 4 days weekly at the contract gig and 1 day as overhead, already they need to bump salary expectation by 25% to keep even. And if you want to account for downtime between gigs, that number gets higher much quicker.

Fully burdened employee costs are normally 150% of salary

yes but that is from the perspective of a big co adding on employee costs and not a consultant that is self employed. you need to make at least 2x what an employee makes in total comp.

I have all of that. I buy it with the money I make.

I think they meant "anyone can switch from hourly to project-based/retainers," not "anyone can switch from full-time to contracting."

Are you working in a specialized field or going on reputation mostly ?

There are probably a half million people who do what I do. I go on reputation and sales ability. Anyone can learn to improve both for themselves.

so how do people find you and how do you convert them? do you do cold calling?

When should I have a monthly retainer? How do I sell it to my client?

You basically reserve time for them. If they don't pay the retainer, they won't have any guarantee that you'll have time for them when they need you.

> When should I have a monthly retainer?

It provides you with a certain amount of income safety, allows you to schedule your time better ahead of time and also prevents you from trying to make time for too many clients at once. (Imagine if multiple clients suddenly have an emergency and ask for your help.)

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