The Business of Software

Hey all,
I'm about to start part-time freelance consulting and am a bit unsure what hourly rate to charge.  I have approx 5 years of experience overall (numerous technologies) with a master's in CS from a good school, but barely any outside project work (e.g. open source).  From what I've seen lately, it seems like the pay structure is about $35-45 for entry-level, $45-70 mid-level, $70+ senior.  Does this sound about right?  Am I way off?  I know alot of this depends on the technology, but just trying to get an idea.

Thx.

$35-45 sounds about right....but then again, that's what I charged for developing small-scale database solutions using MS Access and VBA....

It's been my experience that hourly rates depend alot on where the work is being done.

$70/hr seems about right to me

Cheers
Chris

The rule of thumb is, your annual rate divided by 1000.
So, $75,000 a year -> $75 an hour.

The bigger challenge, you will come to discover, is the definition of billable hours. This varies from client to client, project to project, and also by time of day. Not consistently, mind you, it just varies.

And be clear what your minimal billing increment is.  Since I use dotProject for all my tracking, it automatically tracks down to the nearest 0.02 hours (about 1 minute), but some organizations - especially lawyers - have a minimal billing period of 15 or 30 minutes.

It depends what field and location you're in, but for engineering software for aerospace and defense in the DC area the going rate is $120-$150/hr for general on-site long-term work and $200/hr for smaller projects.

Yes, as John implies... the more speciailized you are, the more you can charge too.  If you're a master of COBOL on AS400 - I know two - they both *started* at $200/hour in DC.

www.realrates.com

(Sorry, forgot to put spaces...)

 www.realrates.com

I guess it's needs http too...

 http://www.realrates.com/

John:

What exactly kind of work is that?  Long term contracts at $120/hour? Is that 40 hours per week using a specific tech?

Anon:

As everyone here has said, "it all depends".  For longer term contracts, it's unlikely you'll see $200/hour UNLESS you're doing work for a large company in a specialized area.  However, if you're doing J2EE, don't expect to get anything near that.  I'd say $70+ is pushing it for most places, especially for long term (6 months+) contracts.

Again, though this is all very general. Location, skillset, type of company, etc basically determine your going rate.  If you look at realrate.com that BillT linked to, I'd bet it'd be rare for you to find many people making much more than say, $50-$60 /hour long term doing "regular" stuff, regardless of experience.

Like many had already stated, it depends (location, length/size of contract, specialization). I agree with Robby's advise of your annual salary / 1000 per hour. That should be the minimum (more if you can :), any less wouldn't be worth your time, don't short sell yourself.

Yet some managers say: "If we are successful, we don't need consultants. If we are unsuccessful, we can't afford them."


William Marsteller, of Burson-Marsteller public relations, once said: "A consultant is a person who knows nothing about your business to whom you pay more to tell you how to run it than you could earn if you ran it right instead of the way he tells you."

I run between to 100 and 150, but I charge per project on a tight spec with clauses for change control at a higher rate.  Depends on your audience and expectations.  And also on the length of contract and the specialization of the area.

"What exactly kind of work is that?  Long term contracts at $120/hour? Is that 40 hours per week using a specific tech?"

Yes, on-site, 40 hours a week plus or minus like a regular contractor, doing regular software development. The technologies vary but usually they have core legacy products and libraries and the projects consist of modifying those to specification. If you can get on one of those legacy projects you can ensure they'll keep you around longer because it's cheaper for them to give you more work than ramp up someone new. But I used to do various tasks, modules to calculate fuel flow (along with creation of the module GUIs and all copious documentation), standalone utilities for data import and conversion, porting existing code to new platforms, general debugging work... it varies. The problem they have is the procurement process in Aerospace/Defense is so long that the time from when they bid to actually kick it off can be a year or two and they can never guess what staff will be available (or what projects they will end up winning). When they get overloaded it's easier for them to call a temp agency (at $180 an hour) or individuals they already know (like me, $120 an hour) instead of ramping up to hire new people. But like somebody said in this or maybe a different recent thread, you need to have contacts, friends or former associates you still keep in touch with, because they don't just search google or the newspaper for some generic "consultant", they either use established agencies or people they already know directly or from trusted references.