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Ask HN: I can do the work but how much do i charge?

3 points by gaspoweredcat ↗ HN
after an unpleasantly long period of unemployment i was contacted by a former colleague who knows my skill set well, he is expanding his business and wants me to handle the IT side as well as providing some specialized documentation and training.

Thing is while im good at the tech side of things im by no means a businessman, ive always worked for a company before and as such ive never had to consider what to charge ive just received a wage or day rate. Ill admit that in my zeal to get back into work i jumped in head first but i am woefully under prepared for the business side of it.

i have estimated that i can complete the whole project within 25 days, it entails everything from installation and setup of the network and servers, cabling, installation and setup of 10 new PCs, building an internal wiki and writing documentation for business procedures, pen test the company website both public and intranet and other basic IT tasks as required

as it stands i dont really even know where to start on such things but when ive done bits of freelance work in the past ive usually been told ive under charged

2 comments

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davidscolgan
Freelancers generally charge higher rates than employees because you don't get benefits, don't usually work 40 billable hours a week, have to do a number of the things your boss was doing behind the scenes, and have to pay the taxes that your employer was paying (self employment tax). If you want some specific numbers, I started out charging $50 an hour when I was right out of college. Then I raised it to $70, then $90 after 3 years. I just recently got $125 an hour for the first time after 8 years.

But I've never been an employee, and I'd count any time you spend at a company as years of experience.

In general my thoughts on rate:

$10/hr - you need to be told exactly what to do $25/hr - some self-direction, you can do some things yourself $50/hr - you are inexperienced, but can get things done on your own $70/hr - you have middle experience and can usually get things done on your own $100/hr - you are a professional and can get things done on your own and figure things out on your own. You actively take away stress from the client instead of adding to it.

If you think that in this job you can in your professional experience do everything your colleague wants (and it sounds like you can and have years of experience), I'd say that your rate is now $100/hr. If you want to charge by the project, for now just estimate how many hours you think it'll take and multiply that by $100. Add a multiplier based on how much uncertainty you think there is in the project.

If those 25 days are 5 hours of work each, $100/hr * 5 * 25 = $12,500. Let's round that up to $15,000 because if you are anything like me, your estimate is probably a best case scenario. Adjust the numbers for your situation.

But, if you've been an employee and a consumer your whole life/career, you may be surprised at just how much money flows through an established business. Numbers you might be very uncomfortable charging for may be completely reasonable. From what I've seen, $100/hr is completely reasonable for a competent professional freelancer.

And the fun part is, the higher your rate (to a point) actually increases your credibility in the eyes of the client. I once actually had someone say to me after I recommended a freelancer to him, "Is this person you recommended not any good? His rate is only $60/hr." Ha!

Charge more, especially in a B2B context. Happy to discuss this with your further, my email's in my profile.

brudgers
Ask your friend "What is your budget?" Your job is not to save your client money on your services. The budget determines what is practical without cutting corners. Twenty-five days might be 1/10th of what the budget anticipates. Twenty-five days might be 10x more time than the client thinks the work should take (it happens).

To put it another way, money/budget can proxy expectations on scope, level of service, and trust.