Ask HN: How can I get my hourly rate from $65 to $125 in the next 90 days?

https://news.ycombinator.com/item?id=1102594

by ashamed2bepoor • 16 years ago

38 27 16 years ago

news.ycombinator.com

I was inspired by some of the comments on this post:

http://www.zacharyburt.com/2010/02/how-i-landed-a-50hr-side-gig-with-very-little-effort-how-it-relates-to-picking-up-chicks/

I feel like I'm not really maximizing my income potential as a freelancer. I've been programming for 5-6 years and I've been doing it fulltime for about 2.5 years. 100% of the work I do is PHP/MySQL and I've done it all, from MVC (CakePHP, CI, Symfony) to CMSs (Wordpress, WPMU, Drupal, Joomla) to Facebook apps. I generally charge $50 - 65 / hr, mostly because I've gotten almost no response for rates above $65 / hr. But from the sound of the comments on the post linked to above, I should be making quite a bit more? Or is my skill-set just not work more than $65?

So I'd love comments or suggestions for working out a plan to get my hourly rate above $125 in the next 90 days. Please don't post something like "just ask for it" because I just can't believe that it's that easy.

Here are ideas I have so far: a) Clean up my resume and portfolio, which are both out-of-date and a bit light on technical details b) Learn Python/Django/Pylon or Ruby/Rails (I've been dabbling for awhile) c) Build up a little more in savings so I can ride out a bit of time between work d) Find places to find great work (I mostly look on Craigslist right now)

If I make it, I'll write a blog post detailing it all :)

pedalpete• 16 years ago

Well, after reading that blog post earlier, I really wasn't getting anything out of it, so I understand why you would be asking the question.

I wouldn't focus so much on how you can get your hourly rate TO $125, but rather think of it as 'what can you offer to make your hourly rate worthy of $125.

Is anybody really looking for a PHP/MySQL programmer? No. They are looking to get a product/service/feature etc. built. What do you offer in that equation. I suspect that your experience with the language is only a portion of that.

It isn't always easy to figure out what soft skills you bring. Why do you program? What do you really like about it? Do you like creating beautiful code? If so, only so many clients will pay extra for that. Are you able to make systems run with incredible efficiency, so the client could save on server costs? That may be worth the extra $$ to them. Are you good at designing usability? If that is a missing piece, that may be valuable as well.

I've found 'what can I offer' is better than 'what can I get'.

francissson• 16 years ago

I agree with pedalpete's comments.

But would like to add a couple of points.

One, from my experience, sorting through and dealing with all of the spam on craigslist is more work than it is worth. Look else where.

Two, for your potential new client, it is really all about your portfolio. Do you have a good one?

alttab2• 16 years ago

References and referrals.

People in business have friends who could always use an upgrade or need it themselves. Offer superior service, make it feel like you are taking care of them, on top of everything else.

What are they paying you for? Now charge a flat rate. Your total value isn't variable to them because you do a good job consistently.

richcollins• 16 years ago

Get good at charging for results rather than hours. You can get a higher hourly rate if you're good at it.

Find a niche with strong demand but without a lot of competition. New platforms are often good targets (Facebook, iPhone, Hadoop ... etc)

Move someplace where the billing rates are higher. You can almost always clear more in big cities, even after accounting for the higher cost of living.

gexla• 16 years ago

Some thoughts...

Project rates rather than hourly.

Get out of the freelancer mindset. You are a small business, not a roving employee.

Become a full service shop rather than an hourly component added by someone else. You create more value that way. Maybe even partner with a designer and grow your team as you go. Contract out parts of the project your team doesn't have expertise for.

Establish yourself as an authority as a developer by blogging and creating great open code (oh, you are the guy who built that?!) If I haven't heard of you, then you have a challenge on your hands!

Become a better salesman rather than becoming a better programmer. Though certainly keep growing as a programmer.

Move more into niche areas in which your skills are more scarce.

Sell a unique service and build a brand as opposed to taking in nearly ant type of job.

Sell! Sell! Sell!

Indirect ways to raise rates...

Hire cheaper developers to do work for you.

Move to an area with lower living costs.

kieransmith• 16 years ago

Yes, yes, and yes! Another important point, in my opinion, is that while charging higher rates, you may get fewer clients, but they will be better quality clients. Would you rather do 10 hours for one company or one hour for ten companies?

patio11• 16 years ago

Freelancing isn't quite my baliwick but since when is lack of knowledge a barrier to commentary on the Internet.

1) You need to focus on marketing/selling yourself to better clients. I don't know what your current strategy is, but hypothetically say you're primarily getting your work from Craigslist. You're generally going to get mostly cheapskates that way. If clients were coming to you because you were identifiably the best in the field and they felt We Are Willing To Pay For The Best, then they'd be offering rather substantially more.

2) Its fine to describe yourself as a PHP/MySQL programmer when you're with friends like us. Never talk like that in front of a client. You aren't a PHP/MySQL programmer -- that is just the tool you use to solve the problems that keep them from making stupid amounts of money. Code monkeys are cheap, people with strategic vision/soft skills/industry expertise/etc who also have the ability to knock together a DB when required are expensive.

3) In service of #1 and #2: get a blog if you don't have one already. Start solving the problems that people who have money have. They'll soon start coming to you with their problems and offering you money.

4) Some folks have already mentioned OSS contributions here, which is great if you want to brand yourself as The Man to do X. That could either be customizing your OSS for their needs, adding a few feature for it, or doing something related.

5) Find folks to mentor you. I learned more about freelance rate setting from five minutes talking with Thomas than I had in the previous five years of working at two companies which do consulting as their business model.

alttab2• 16 years ago

Absolutely right. Especially #1 #2.

wushupork• 16 years ago

Related to what some of the people are saying here, focus on what problem the customer is having. No small business needs a "PHP developer to create an e-commerce system" - they need a solution. If you can show them that you can solve their problem and help them MAKE MONEY, it's a much easier sell.

It sounds very infomercial-ly but I think it's true.

Also if you sell yourself as a PHP/MySQL developer, clients might not know what that means or what you can do, so you'd be limiting your clientele who are knowledgeable enough to know that PHP developers can do X. What you should be doing is to say you can solve X, Y and Z problems, and that you've done that for A, B, C clients.

rwhitman3• 16 years ago

I've been a freelance-only web developer for 10 years.

Honestly with only general web dev skills and mostly PHP you'll be hard pressed to get over $65/hr. I know Django and I still strike out at getting Django projects pitched at $65/hr. But I think it has mostly to do with the economy.

Once you want to cross a certain threshold you need to have more structure in place as a business (with project rates and lots of time spent coddling clients and doing documentation), some really specialized and in-demand skills or a long-running career with some impressive success behind you.

I've pulled in $100/hr+ in the past, but it was due to a complete package of project management, design and creative direction and oodles of documentation and meetings etc. Operating almost as a shop, not freelance

I don't know who all these folks are that claim they're getting $125/hr rates but I suspect they have more up their sleeve than just run of the mill web programming. You take what the market will give you or you lose projects its that simple.

volomike• 16 years ago

As a fulltime and fairly successful freelancer now going on my third year, I completely agree with rwhitman here. However, I have something else to offer. The original poster needs to stop thinking of freelancing as the only thing he does. He needs passive income and affiliate marketing projects. But that requires free time. My suggestion on getting free time is to take those periods where you do sales/marketing/advertising stints for new gigs, and outsource that to offshore virtual assistants. That gives you a little bit of free time to slip in the start of a project, and then in the next month you can finish it. For ideas on what to do, visit mixergy.com and let your mind wander from there. As for affiliate marketing, just start with the advice on affbuzz.com and move from there.

silencio2• 16 years ago

> But I think it has mostly to do with the economy.

I don't think so. The majority of my freelance work is web development, and I bill at least double that - $100 to as much as $300/hr if I can get away with it, and only web development, because I know nothing about design and other things and will freely admit to it. I don't really do anything specialized, I just have a list of former and current clients from the past few years who are all very happy, and nothing fancy there either. New clients are often through word-of-mouth, which I've very much enjoyed as many clients referred to me by a former client that I enjoyed working with are usually a joy to work with as well. Oh, and not so much PHP, but mostly Rails, occasionally weirder stuff (Java, perl!). Note that the hourly rate is not what I usually offer to clients, I give them a project rate based on what they want. People seem to be fine enough paying five figures for a completed project, not so much billed specifically by hours (unless the situation demands such a thing).

The only thing that may make a difference here is that I live in Los Angeles, where there are lots of potential clients, the cost of living is cringe-worthy, and to ask too little is to ask for trouble as a freelancer. I very much doubt my web dev skills could pull in that kind of money in, say, somewhere in Montana. And the very extremes of my rate are extremes. $300/hr, if you want me to pull allnighters to get something done in one week. $100 for those super long projects that just drag on forever and you're not actually doing anything significant..

Anyway, if I had a useful suggestion, it would be to stop looking on sites where most of the projects are ridiculously simplistic or skills are undervalued...like craigslist. I used to eye the local jobs via rss of craigslist's software jobs and such, and ugh, it was all listings like "oh we want 10 years exp with x" and offering some ridiculous pittance at best, and "will trade (your skills) for (my...skills?)" at worst. There's some reasonable contract work to be had on like dice.com, and there is nothing quite like networking with your local community and going from there.

Be assertive about your hourly rate, but not too much. Anyone that isn't coming to the table with a good budget isn't worth working with in the long term, because they're also the same jerks that'll try to weasel their way out of paying for the extra work they want done and such. But you know your skills and your limits, and your clients need to feel that they got their money's worth out of you. Also, keep in mind that charging more than someone else might really does make people think you're worth it. I don't usually get bundled into the "my next door neighbor's kid can do this website for minimum wage" or "what a ripoff" groups, more like the "this person knows what we need and gets it done right and on time and is worth the expense" group. :p

If I lose projects to someone else over the price, so be it. I need to be desperately in need of work to be willing to work on a project while extremely underpaid, and even then I had better still be getting something else in exchange to make it worthwhile. I accept everything from cookies and sushi lunch to some serious credibility gain (i.e. volunteering for a good cause).

rwhitman3• 16 years ago

Interesting, I actually live in LA as well.

Here's the thing with project rates - I'm obsessive with clocking time. I clock everything, every second. Sometimes you bid on a project where you say to yourself "oh yea! I'm getting $300/hr for this" but what happens is as it drags on you try to clock less time to justify the rate and just start guesstimating. In reality if you clock meetings, calls, time responding to emails, documentation, research, project planning etc the rate always ends up being much, much lower. Its not just time coding.

Anyhow not saying that's your situation, but I think a lot of people who claim high rates forget about non-production hours when they make their project quotes.

But having Java and Perl skills are definitely more valuable than just PHP... And yes, having established, stable and valuable clients with big $$ over the long term certainly helps.

My personal big issue was that I deliberately dropped all my clients from pre recession times to work on a startup and then had to find new work in 2009, to my dismay discovering that half my old clients either went out of business or couldn't afford me any longer... Keeping relationships up really matters.

rwhitman3• 16 years ago

One word of advice I'd also like to offer - the pickier you are about the TYPE of project you take the less you're going to make. If there's competition for the project the client can get away with paying less.

If you can suck up doing boring backend work for pharmaceutical companies you can ask for much better $$ than working with a seed-level social media startup or a popular blog. There's a tradeoff where your ego lies - in high rates vs putting sexy names in your client roster...

ddemchuk• 16 years ago

Rather than increase your rate, maybe you can try and increase your bandwidth. Your rate will be able to go up as your portfolio grows and the size and quality of clients increases.

So keep taking on more and more projects, and bring in someone straight out of college to work for $15 an hour to take on the smaller ones with you. That's how I started at my current job, and my boss has taken our company from $1000 sites to $20,000 sites. The more work you do, the more experience you can leverage to raise your rates.

Zak• 16 years ago

Ditto on selling products/solutions rather than your ability to use certain tools.

For some clients though, it is about the tools. They need an X programmer to extend their app that's written in X. I think part of your problem is your chosen X; PHP is popular, and it's easy to find work, so everybody's doing it. The supply of programmers is rather large, so it's hard to get anyone to pay more. Sure - you're demonstrably better than the average contractor, which is why they're willing to pay you $65 instead of $45.

Learn some other tools. Find something with a higher barrier to entry, but still some demand. Try to be the guy who never says "that's not possible".

mikeyur• 16 years ago

I have to agree with a lot of the other comments, start thinking on a project basis vs. hourly.

I have a friend who runs a small dev shop and has spent the past few months selling a simple Facebook app she built.

She charged a company around $10k for the app and got that rate by explaining how it would benefit their company. ie. Another form of interaction with customers, better brand recognition online, lead generation, etc etc. Apparently it took her about 2 weeks to build and she had to outsource some design work for ~$500. Assuming she worked 80 hours over the 2 weeks, she made roughly $120/hr.

Now, that's really good money, but that hourly number keeps increasing over time because she realized she could resell it to other companies by simply changing the branding and some design elements. She continues to sell it for $10k, but her investment each time is significantly less because the bulk of the work is done. It just costs her a few hours and the price of the design work.

In the past few months I think she's rebranded and sold it to 4 other companies. There are a bunch of factors into calculating the hourly rate for the project, but she essentially made $500/hr for that work.

Think about your work differently and what you offer, sell a product or solution - you won't get your rates up if you make your clients think of you as just another employee.

bigiain• 16 years ago

'Please don't post something like "just ask for it" because I just can't believe that it's that easy.'

It's certainly not, but keep in mind _not_ asking for it is 100% sure to stop you getting it. You _do_ have to ask for it before anybody will give it to you, but instead of "just asking" you're going to need to ask and have already demonstrated (or at very least be prepared to justify) why you are worth twice as much as some random PHP/MySQL guy off Craigslist.

jonah2• 16 years ago

You're not going to get $125/hr as a "PHP Programmer". You'll get it as a firm delivering solutions.

You'll likely need to partner with/subcontract out to others with the skills you need to offer a complete package. Marketing, design, copywriting, photography, and SEO come to mind.

jonah2• 16 years ago

Above all: Impeccable communication and delivery on time as promised.

ciscoriordan• 16 years ago

Where do you live?

dmhomee• 16 years ago

One thing that I found useful in my craiglist sales pitches, was to get away from pitching yourself as a LAMP developer and pitching yourself as a consultant of popular technologies -- instead of just listing out php/mysql etc, have a section where you emphasize drupal, facebook, mobile applications etc. -- basically follow some of the hot markets that organizations want to break into. This falls a lot in line with selling on benefits and not features. "writes PHP" is a feature; "developing viral media platform for organizations" is a benefit.

Taken with the advice that other people have on here, if you are able to make people think that you develop technology based on thought out, data/fact driven market/product decisions, they will be much more likely to buy from you at a premium.

ErrantX• 16 years ago

> d) Find places to find great work (I mostly look on Craigslist right now)

This is probably your problem. I had a lot more success finding bigger companies with more money to spend. Or entrepreneurial types who work in the "real world" and were willing to spend hard cash on a web presence too.

A lot of my consultancy work comes through my consultancy partner; it's all Jewish clientele (and they are usually big spenders). We got gigs that, really, and less than 3 month old consultancy shouldn't have got - all because my partner is Jewish.

So you need an "in" to a niche market of clientele.

psyklic• 16 years ago

When you get new customers, tell them that you give discounts for the first job so they can see what a good job you do. On the invoice, put your real rate minus a discount. Then, the next time they ask for your services, charge the real rate.

To switch existing customers, just say that due to demand, you're raising your rates. However, for the next x hours of work, since they've been a loyal customer, you will continue at the existing rate. Then on your invoice, do as in the first paragraph! If it's a reasonable increase, I doubt many customers will drop you. And you may want to wait between projects to switch your rate, but the first x hours at the old rate still applies :-)

Good luck!

jacquesm• 16 years ago

The very best way - and the simplest too - to up your rates is not to charge by the hour, but by the job and to work like the devil.

pseingatl• 16 years ago

As a consumer of programming, it's all too easy to compare different proposals merely based on price. Why hire a programmer for $125 if there is one who (apparently) can do the work for $65? Many people buying these services are not in a position to judge the difference. So, don't negotiate on price, negotiate on scope of work. I would also second the comment about working for a project price, rather than an hourly rate.

Ask HN: How can I get my hourly rate from $65 to $125 in the next 90 days?

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