Since I left school I have had to jump into application design on my own because I am finding it difficult to find work without 1 to 3 years of experience typically required by the current job market. This leaves me without any gut feeling for how to charge my customers. Charging by the hour is difficult to do fairly because I am not as efficient as more experienced programmers. Charging by the form, query, report, macro, or module, however, doesn't accurately capture the time variable associated with extensive scripting. Any guidelines offered in regards to charging and possibly ballpark rates would be hugely appreciated!!!
Guidelines Needed Regarding Charging Clients
- Thread starter Sonny Jim
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In the job market, going your own way as a consultant requires you to be able to work fast enough that your customer prefers to purchase your services rather than hire someone who is on the clock. The cold reality of the world is that until you are able to make this economically feasible, you aren't ready to go it on your own.
The guideline is that you have to be able to demonstrate higher productivity by the same proportion as the difference between your hourly equivalent rate and a full-time employee's hourly burdened rate. Otherwise it is cheaper for your prospective customer to just hire someone.
The other side of the coin, contract for events rather than time, ALSo has its pitfalls if you aren't fast enough. You get money only by producing software and selling it. Either you have to work fast to get enough paydays to maintain your existence or you have to somehow find a saleable product so you can make up on volume what you can't make up on speed.
The rule of thumb is that you have to have enough money to live for at least 18 months (and some say 2 years) with limited or no success in order to make a business last. Even then, 80% of all small business fail in that time period.
I don't want to rain on your parade, but I would be doing you a disservice to not lay it out for you to see. It is your decision. You should be fully informed before making it.
Having said all that, good luck.
Now... how do you charge? You have overhead to consider including taxes, some minimal type of insurance, a place to work, and equipment. You therefore have to back-compute things like rent, amortization, insurance, taxes - and the salary you need for the standard of living you can accept (at first) to get started. I recommend that you visit your nearest library for topics on small business startups. They will help you far better than I could, including formulas and points of contact for figuring out taxes, insurance, etc. Also, spend a little money to consult with a lawyer to incorporate yourself in a way that protects your personal things. Otherwise, if you fail you'll lose your shirt. Literally.
The guideline is that you have to be able to demonstrate higher productivity by the same proportion as the difference between your hourly equivalent rate and a full-time employee's hourly burdened rate. Otherwise it is cheaper for your prospective customer to just hire someone.
The other side of the coin, contract for events rather than time, ALSo has its pitfalls if you aren't fast enough. You get money only by producing software and selling it. Either you have to work fast to get enough paydays to maintain your existence or you have to somehow find a saleable product so you can make up on volume what you can't make up on speed.
The rule of thumb is that you have to have enough money to live for at least 18 months (and some say 2 years) with limited or no success in order to make a business last. Even then, 80% of all small business fail in that time period.
I don't want to rain on your parade, but I would be doing you a disservice to not lay it out for you to see. It is your decision. You should be fully informed before making it.
Having said all that, good luck.
Now... how do you charge? You have overhead to consider including taxes, some minimal type of insurance, a place to work, and equipment. You therefore have to back-compute things like rent, amortization, insurance, taxes - and the salary you need for the standard of living you can accept (at first) to get started. I recommend that you visit your nearest library for topics on small business startups. They will help you far better than I could, including formulas and points of contact for figuring out taxes, insurance, etc. Also, spend a little money to consult with a lawyer to incorporate yourself in a way that protects your personal things. Otherwise, if you fail you'll lose your shirt. Literally.
I hear you completely, however I haven't had much trouble getting work and the folks whom I have created databases for have been pretty happy. I think it has a lot to do with the fact that many companies, particularly small ones, feel that investing in IT personnel is still an unnecessary burden and that if they have someone to initially come in and set up their computers and a simple network that they will be alright.
My wife brings in an income that sustains us for the time being, and I can afford to find business this way. It can be anxiety provoking, however, when a scheme that seemed to be well constructed mentally needs to be reinvented at the last minute, particularly when there is no mentor to fall back on with questions. The legal bit also brings me some concern. In your experience, what kind of liability challenges are unprepared contract professionals risking? Do you have any examples you might be able to share?
Thanks Pat, I will definitely check out guru.com, right not my goal is to get experience and I am not expecting to make a lot doing this.
(It is funny that you mention the Quickbooks thing, I have run into that exact experience already!!
)
(It is funny that you mention the Quickbooks thing, I have run into that exact experience already!!
)What you could do is get a small customer base and service this customer base well. and build on this -
A little investment in say remote back up software - adn offer this as an extention to your design work - you need to work out the routine -
givne the market you pitching at - if you can offer an offsite backup storage solution it might give you that edge . and a monthly income ??
A friend of mine does websites - has a customer base of 100 or so.. and services these customers very well - has a retainer of 10.00 per month so 1000 per month income just for hosting services the customerbase - any design work is extra - .
so you need to look at what you can offer that the big boys cannot and at a price thats attractive(and affordable to you)
A little investment in say remote back up software - adn offer this as an extention to your design work - you need to work out the routine -
givne the market you pitching at - if you can offer an offsite backup storage solution it might give you that edge . and a monthly income ??
A friend of mine does websites - has a customer base of 100 or so.. and services these customers very well - has a retainer of 10.00 per month so 1000 per month income just for hosting services the customerbase - any design work is extra - .
so you need to look at what you can offer that the big boys cannot and at a price thats attractive(and affordable to you)
You might want to consider applying with a IT consulting firm, the one that I went through did its own in house skill assessment of you so experience wasn't the only thing they looked at. They do the hard part of finding jobs and if you aren't looking for permenant employement opportunities you can pick up a lot of short term projects. The money varies but in my area I've been offered anywhere from $18-$44 per hour, I'll let you guess which job I took
