ebendogan

This was about 10 years ago.

The naive answer I would have given at time was: "I'm a software developer who builds ecommerce and CMS sites."

And it's funny that you ask "What do you do?" At the time I had starting taking on projects from a friend who had been doing development contracting for about 4 years. One time when a client told me my proposal was priced too low and passed on my bid I was baffled.

I told my friend about it and he asked me the same question, and I gave the above answer more or less. He corrected me and said "No! You're businessman enabling a national sales channel for a local or regional business who wants to increase their revenue."

So never define your price by what you do, rather define it by what the value of thing is you're delivering to the client. This requires some research on your clients and a realignment of your thinking. When you're contracting as a developer, you have to start considering yourself as becoming a successful businessperson and not (just) a successful software engineer.

Don't believe that shit. I worked through an agency once where I was the subcontractor for several projects. One time the account rep was lazy and sent me the customer's contract and failed to remove the rate he was charging for my work. I was charging $150/hr. He was charging the client $400/hr.

People will pay a premium for something they value. In that instance I actually won out eventually. It turns out the agency was really shitty at managing projects and that particular client got in touch with me directly. He agreed to pay me $400/hr if I gave him priority. I did, and he started referring me to other businesses who would also pay that rate.

So don't kid yourself about how much people will pay.

Edit: These clients weren't in the Bay Area.

At the beginning of my contracting career I neglected to think about all the time I'd spend on non-coding tasks. It wasn't insignificant. I also found that the 4x full-time hourly wage is about right. A few other things I learned:

Almost never take a fixed bid contract. They're pretty much always a net negative.

Give clients discounts for paying early. Everyone loves a discount. Never discount your hourly rate though, because once you do that once for a client they'll never stop arguing with you about it. There's a line on Schedule C for recording discounts.

If you turn over raw source code to a client, stress (in written, contractual form) that if any other contractor/employee changes the code, then you will charge them a premium rate for any changes or fixes.