Ask YC/HN: What are some reasonable rates to quote for technology consulting? | Hacker News Reader

Ask YC/HN: What are some reasonable rates to quote for technology consulting?

15 pointsMystalic22 comments

Hey everyone.

I'd like to gather the great HN community's opinion on technology consulting rates.

In the span of two days, I was approached by two people in my network, one to help with ad and site monetization and testing, one to help with making sure a new web-based start-up is built optimized, help with social media/networking marketing, search, etc.

I was asked about my rates, and I had none (since I've never consulted in this fashion, I'm just out of college after all).

What are some rates you've heard of or used for your consulting or work, both non-programming and programming?

Thanks

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Well, to start, if you really know these people, ask what their budget is and set something in that range that you think is fair. If you're not sure about the people, then you ought to consider things like rent, food, etc...

One great place to go is the http://freelanceswitch.com/rates/ calculator. It was designed to help answer questions like these. If this is your only source of income, this calculator is invaluable, but don't use it as the only determinant of your price, rather as a guide. You might break even at $50, but if the place you live in pays more in general, don't be afraid to ask for it.

One last thing, don't back down on a fair price. You would be amazed how easy it is (especially on your first jobs) for someone to talk you down below fair market for your work because you're afraid to lose the lead. Know what you're worth, and charge it.

Good luck!

Ask them about their budgets? That's like saying "oh, ok, how much do you have?". Even if they tell you, they're not going to like it, which may lead to probelms in the future.

As I mentioned, it's for people you know (and would be comfortable having that conversation with). I've worked for friends, and I'm clear up front that I'm not free, but I'm also more willing to work with them on price for stuff (as it's usually small and fun). Also, it can help you to determine if the customer is serious (Make me Facebook, $200) or not.

It's not always a great way to approach things, but sometimes (and you'll know when) it is a decent approach.

In major metros in the USA $100/hr is entirely reasonable for someone who gets results directly.

If you're performing a specific task you're very comfortable with, or will be on call, bill the full rate in 15 minute increments.

If you're venturing outside of your comfort zone and/or providing soft consulting such as advice, discount appropriately. Likewise, if they'll be providing you work in bulk (some number of hours per week, or a long project), consider discounting fairly aggressively as well.

Freelance hours (1099) are different than employee hours (W-2) from a tax perspective, so be sure that your income is equivalent to what you'd want to have as an employee at least.

In particular, you will have to pay an extra 7.5% in soc sec tax. That's not even talking about insurance issues, which you can (hopefully) ignore for a while if you are healthy and single and living in a state where you can legally do so.

Don't be afraid to ask for what you're worth. On the other hand, you don't earn anything if you price yourself out of the job.

For reference, the going rate in Minneapolis for competent contract software engineers seems to be in the $100/hr neighborhood.

If you can't come to an agreement on an hourly rate, you might try negotiating a price for the job as a whole. If you're especially productive, you might even come out better this way than if you had done an hourly arrangement.

If you do negotiate for the job as a whole, try to be very explicit on what is deliverable. It's easy to get stuck in a trap where you keep adding just one more thing and it takes forever without you getting more money.

The factors to take into consideration are the expertise you bring to each of these projects, other folks that can do something similar, how quickly do you need to complete these projects, are these one-off's or is there a potential for on-going consulting, how badly do you need the money from these gigs, how much will you learn from these 2 gigs, can you use what you learn to market yourself for other similar gigs, etc.?

Since you are just out of college and you have probably not negotiated consulting rates, assign what you think is a fair hourly rate for each of these projects and then double it -- that should be the rate you could look at charging.

Once you gather enough expertise, and can showcase clients & portfolio, double your rates again.

good luck!

Right out of college you should be looking for $30 to $50 for tech consulting.

I usually work at 2 rates depending on the project or engagement. I have a "developer" rate where I'm looking at an every day engagement for longer than a month. Essentially I'm guaranteed work for a considerable period of time so I charge less.

Sometimes I get called in for one of consulting gigs, maybe just a day to a week of training or consulting. I usually charge about 50%-100% more for these types of gigs, this is common - you incur a lot of overhead on a gig like this. I'm up front about this with potential clients as well, they know my rate goes down for a longer engagement.

By the way where are you? Do you have some unique skillset?

> By the way where are you?

This is probably the most important question. Good luck getting $30 an hour in a small market, and you could certainly ask for more than $50 if you know what you are doing in New York City. So where are you?

It really depends on two factors. What level of value do you offer company that wants to work with you and what is your level of need for income?

The more value you can off and the less you need the work the more you can charge. Generally internet marketing consultants can charge between $50 and $200 per hour.

The more details you can provide the more specific I can be on what competitive rates might look like.

I charge $100/hr for consulting relating to video encoding and compression. I'm a college student, but I can get away with it because its such a great niche (and there aren't very many of us compressionists out there who aren't covered in dozens of NDAs and noncompete agreements...)

Ironically, I only get paid about half that for my actual coding contracts, which quite honestly are much more work.

What do you actually do and how do I get into a market like that?

Jerry Weinberg has a great statement on this: set your price so that you're happy either way.

In other words, set it high enough that if they say yes, you feel good about how much money you're making, and if they say no, it's a relief because you wouldn't have wanted that deal anyway.

I found this helpful because you can answer it yourself (without any market info, which can be hard to get sometimes) and it's optimized for making you feel good.

As a hardware consultant during college, I was able to charge $20 - $30 per hour. Naturally more is better. If you have experience, it is easy to justify $100.

It really depends on the level of specialisation involved.

I would say $125 - $150/hr is a reasonable rate, but my consulting work could not be described as IT generalism. It also depends on your overhead, firm size, whether there are subcontractors involved, etc, etc.

I do consulting every now and then, and my hourly rate is around $100, which I'm told by clients is very fair.

I primarily do business/IT strategy, business models, etc. but also some programming and a bit of usability.

I'm placed in Copenhagen.

if your clients think your rate is "fair", doesn't that suggest you're undercharging?

i would guess when a client subjectively feels your rate is "a little on the high side" then it's probably fair. they prefer low rates.

I've actually been thinking about upping them a bit, so yes they are probably a bit too low...

There's an old story about a guy calling in a plumber to have a look at his washing machine which he said. "It just stopped working....."

The plumber looked over the the washing machine, pulled it out fro the wall a little, peered down the back, lifted the lid and took a peek inside then closed it, turned it on then off then back on again then paused thinking a little. He then proceeded to dive into his tool bag, bringing out a soft faced rubber mallet and gave the washing machine a firm tap somewhere on it's behind. It then proceeded to start filling with water and going through a cycle. This all took about 8 minutes.

The bloke who called him was pleased until he got the bill. The first thing he looked at was the figure at the bottom. $120!!!!!

$120 the man exclaimed!!!! But it only took you 8 minutes......

The plumber then gestured to the itemised part of the bill.

"Hitting part of washing machine with SF MALLET - $20" "Knowing exactly where to hit it - $100"

============================================= Old story (and in many guises floating around the net) but a goodie.

If you save someone $10000 with an hours work - technically if they paid you up to $9999 then they would be better off. If you're good - then you may always be on the low side.

Better yet, just become a social media consultant and charge $300 an hour to overhype Twitter!

I charge $250 an hour for interaction design and general consulting (e.g. pure advice), and my husband charges the same for his expertise in JavaScript.

But I'm booked solid so that must mean it's time to raise rates.

Lots of good people undercharge because they know how much they don't know. Consequently, lots of bad people overcharge, because they are overconfident (or simply shysters). The trick is in knowing which you are.

I follow 2 key pricing rules:

1. Tell the potential client your hourly rate, then slap them in the face. If they're not more shocked by the rate than the slap, you're not charging enough. (Figuratively. Haven't slapped a client yet. Although some have deserved it.)

2. Remember it's about value and not about cost, just like those tire pumps at gas stations charge you a buck or more for air -- the air compressor doesn't cost anything like that much to run and maintain, but boy is it economical when you consider the wear it saves you on your $150-a-pop tires. Does an hour of your time only generate $50 of value going forward? Well, there you go.

FWIW I am in the midst of writing a short ebook filled with advice on consulting aimed at designers & developers, that I've developed over the past 11 years of consulting. Watch this space, kinda thing. Or if you'd like to "beta test" it for me, email me at amy@slash7.com.

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