Ask HN: Ok to ask retainer fee for being avail during office hours?
That's all fine, except that part of the reason I'm freelancing is being able to be flexible in how I schedule my day.
Is it common to negotiate for an upfront retainer fee based on this? After all, I'm committing myself to be available for solely said client during the agreed on hours.
Another way would of course be to try and get a higher hourly wage, but it seems better from a negotiating standpoint to split to two.
Thoughts?
-EDIT- To be clear, the time that I need to be available for them are billable hours, i.e.: to get the primary job done for which I'm hired.
On top of that I need to be available for internal developers during those hours should the need arise. I therefore have to structure my working hours around the office hours of the client.
Therefore a retainer fee would sit on top of billable hours and would compensate for my lack of flexible working hours NOT incurred opportunity costs.
55 comments
[ 5.0 ms ] story [ 137 ms ] threadAs a side note, having flexible hours is great if you need that kind of flexibility in your life. If you don't, consider billing by day/week.
I'd stick with keeping it separate, rather than the higher hourly wage. I'd also try and put a limit on the amount they can contact you (perhaps a maximum number of hours per day), as I had occasions when for weeks I'd have no phone calls, and then on one day spend 6-7 hours on the phone to them.
You could go a step further any have different levels, so for a higher monthly rate you'd respond within 30 minutes, etc etc.
"OK we have three options regarding tech support. First is best effort response time which costs you nothing, next option is 3 day response time which costs $X, final option is 365 X 5 days 9-5 on call tech support which costs $300/week plus $100/hour per call out." Which would you like?
An obligation to answer all phone calls immediately affects other obligations. A one person shop has no slack staff.
1 in 4 is being on call 1 week in 4 though some DBA's where on 4 in 4 and got called about twice a year very lucrative.
Another alternative is to just have an on-demand hourly rate that is higher than your normal rate. You could have pre-scheduled "office hours" at the regular rate, but if they want you at other times, they get to decide to pay you a little more.
I'm not sure I understand why this is something you should be compensated for outside of the gig itself. Communication is a basic part of any business relationship.
You are a freelancer. Yes, that means you have the freedom to schedule your day. It does not mean, however, you can completely disappear and ignore your client's team just because you'd rather work at night. That's unprofessional.
So the communication from one client could be disruptive to other work, i.e. it could make a person lose money. If making a certain agreement with a client would cause me to lose money, it doesn't seem unreasonable to me that I would either charge for it or not agree to do it at all. In my experience, reasonable clients respect this.
It is also reasonable to flat out refuse. A client who doesn't think a designated point of contact is a good way to handle a contract may be a bit if a red flag.
Finally, it is perfectly reasonable to recognize that it is not a service you can provide as a small consultancy and walk away. A high maintenance client can kill the ability to maintain a diverse backlog.
Good luck.
I would work out a flat rate that is as competitive but still makes it worth your while to accommodate their requests. Later they may even relax the requirement and you'll still be getting the higher rate.
Collecting the nickels and dimes is just good business. If the client wishes to avoid being billed for nickels and dimes, they may wish to negotiate terms based on the value of avoiding it. However, any going concern will already have an accounts payable process in place that swallows up all nickel and dime invoices regardless of source.
Any client who complains about nickel and dime invoices is just nickeling and diming. Nickling and diming while trying to make the nickels and dimes as large as possible is the core principle of the time and materials consulting business model. Eating invoices is a way of marketing a company as not-neccessary-to-pay.
None of which is to say that you should nickel and dime your friends. Just your friends' businesses.
It is your life, so you decide what price you want to put on the reduction on your freedom and flexibility. It might also help to understand the full ramifications of what you are being asked for. Unfortunately, I've seen retainer agreements come to grief because the terms and conditions were not sufficiently clearly spelt out.
Many clients ask you to yield an inch and then take a whole mile. Very hard to push back on escalating demands when you haven't set limits clearly.
It is your life, so you decide what price you want to put on the reduction on your freedom and flexibility. It might also help to understand the full ramifications of what you are being asked for. Unfortunately, I've seen retainer agreements come to grief because the terms and conditions were not sufficiently clearly spelt out.
Many clients ask you to yield an inch and then take a whole mile. Very hard to push back on escalating demands when you haven't set limits clearly.
If it simply phone/email, you could consider like @hoodoof said with setting up a tiered support pricing plan. With phone/email only you can still work on other projects you just need to respond to their requests promptly during that time which can be worth an additional amount.
On the flip side if they want you onsite during that time it becomes a completely new ball game as you are unable to service other clients during that time which can impact your income. In this case I would build that cost into the contract, not necessarily charge a retainer.
Finally, as @y0mbo was saying, if the client just wants to know you are available during their office hours compared to working at night then no you can't charge an additional fee for this. This may be the case if they are in a different time zone and want to ensure that they can reach you to discuss the project and such. Again, if this is the case I would build the cost into the contract.
In other words, you should say something like "$X for office hours availability. I'll give you a discount if you drop that requirement".
Charging separately for that will raise flags at the client's end. Also, many enterprises find it easier to deal with higher bundled rates than with more complicated structures.
That being said, what kind of availability are they asking for? AFAICT, the standard is for "same day" response. If they send a question in the morning, a response of some kind is expected in the afternoon, and vice versa. Much more than that justifies higher rates, IMO.
It's the same reason that as the operator of a small business you can't just walk into your accountant's or lawyer's or bank manager's office and expect to see them without making an appointment. You could probably have a dedicated account manager at those places, and they'll probably be happy to provide one as long as you're paying them some multiple of the corresponding employee's annual salary for doing so.
Remember, you're running a business. You're not a member of your client's staff. That means they're paying you for the product or service you're providing according to your contract, not for being a bum on a seat for some fixed hours. It also means you will have necessarily other commitments in terms of business administration and potentially other clients. Anything that reduces your flexibility to do these other things or particularly that requires a degree of exclusivity for a single client is a big commitment and should be charged accordingly.
Personally, I wouldn't accept a long-term gig with fixed hours or on-site working. I also value the freedom that comes from working independently, and I have no wish to go back to more of an employer-employee relationship. If a client wants to work that way for a sensible reason and over short period (a few days during a crucial period leading up to launching a product, for example) then I wouldn't turn it down automatically, but my rates would be much higher (several times the normal rate I work off for my time, and multiplied up again if the engagement might then be deemed disguised employment and taxed accordingly).
"Freelancing" for 6+ years here. I disagree that this is the case and in fact IMHO you should treat the client as though they are one of the many demands on your time schedule, not as though you need to fit into their time schedule. Our clients have always understood that I fit them into my availability and not the other way around unless we have worked out an agreement ahead of time and they are compensating us for it.
Further, one of the primary determining factors of whether you can claim to be a 1099 worker is if your clients dictate where and when you do your work - if they get to tell you where to be at what time, you are an employee.
My advice is as another poster stated, negotiate the hell out of this with 2-3 pricing options.
If I'm billing substantially less than 40 hours, clients have always been much more flexible.
That may be a good out for the OP. If you want flexibility, perhaps a 20 hour / week contract would be a good option?
One of the key "tests" for contractor status is that you determine when you do the work. It's not the only consideration, but combined with other requirements of the contract it could tip in the direction of you being considered an employee.
Every case where 1099's have complained, is because they are employees where the company tried to shove employment risk to the 1099.
I don't know about the US, but the fixed hours/degree of client control is definitely an issue for employee vs. independent status in some places, and something you need to check in your local rules if you're in this position. Different places have very different rules about when to consider someone a disguised employee and probably tax either or both parties accordingly, and in some places the rules seem to be quite black and white.
The danger here is this arrangement can turn into you being an effectual employee that's getting shafted on everything an employee gets. The proper deterrence here is a sufficiently high hourly rate so that it becomes really painful for them to do that for more than a short time.
So yes, absolutely raise your hourly. The fact that they can ask you to be so available means your rate is too low. So raise your rates such that you'd be really, really comfortable, rich even, if they decide to do that. Then when they do, you won't feel like you're getting shafted.
$250 an hour (or the equivalent in your currency) is a good start.
I'd suggest seeing if perhaps you can reach a compromise where you retain some flexibility, but there's a bunch of your hours that are sure to overlap with the office hours (e.g. always be on-site for 3-4 hours around noon). And maybe you'd even only have to do this part of the week, e.g. mon-wed-fri? With most conflicts, the solution is usually to have both parties answer the question "what are you trying to achieve?" and then working together to find a third solution that satisfies both parties, instead of focusing too much on the schism between the two proposed solutions that the parties had come up with individually.
If all this is a big hassle for you then by all means, charge accordingly, and in the future think more about what kinds of gigs you take on and how much face time they are likely to require. Maybe 'remote only' is a better fit for you?