Ask YC: What are the going rates for consulting gigs?

[iamelgringo]

I'm wondering if people have any sense of what consulting gigs are paying these days. I'm sure that the pay rate varies by geography, industry, computer language and technology.

My primary interest is in hearing what LAMP, Django and RoR gigs are paying, but I'd also love to hear what DB consultants are making as well.

* edit *

Okay, I just want to clarify my question a little. Despite what people may infer, I'm not asking "How much can I charge?" I'm career changing, and I worked contract work as an ER/ICU nurse for 8 years. Nurses in the contract biz were pretty free and open with hourly salaries and living allowance ranges. I'm assuming (perhaps wrongly) that there is a similar culture in the software world.

I am asking for a rough ball-park. I'm looking for a range that people are making from "Oh, my God, they got screwed and will be eating ramen for months." to "I can't she had the balls to ask for that rate."

Not knowing the tech contracting business too well, I'm just asking for a lay of the land. If this is a taboo subject.... my bad. Please disregard.

[norcalgrrl]

I don't know why people are dancing around this issue. I'll name some dollar amounts for you. As a LAMP consultant, I charged $100/hr. USD take-home and worked W-2. I'm now looking to get into independent (non-W2) consulting and will be charging from $50-$100/hr. USD on a sliding scale based on the type of work and the ability of the client to pay. Not all small businesses can pony up $100/hr., but mid-to-large corporate clients certainly can. Database tuning gigs can see $250-$300+ hr., but that's a very specialized skill set. You'll need to determine the going rate for your market and start out in the middle of it. If you go to low, you sell yourself short and look cheap (which can sometimes give the illusion of poor quality). If you aim too high, you price yourself out of the market.

Good luck!

[mixmax]

Here are my numbers:

I do project management, usability, and generally make sure everything is on track - so it might not be exactly what you're looking for. But for what it's worth I charge $150 an hour, and can be negotiated down to around $100 if it's more than 2-300 hours.

My experience is that you shouldn't sell yourself too cheaply, since your customers then will regard you as being not very good at what you do.

[edw519]

If you do go too low, remember one important thing: your value increases as you get to know their system. After x months, raise your rates. You'll still be a bargain over someone new because there's no learning curve.

Rates go up for everything else, why not you too?

[larrykubin]

I do a lot of PHP work in Austin, TX. I charged my very first client $65/hour. I was pretty excited about that at the time (whoa, someone will pay me $65/hour!). Then I realized that this was very cheap to many businesses, and saw how much many "agencies" were charging to complete a project. I then got a couple more clients and raised this to $75, then $95, and still haven't had anyone turn me down. Most people would say that means to charge more, but I haven't done this yet...

If you can find a few good clients that pay consistently and are really cool to work with, you can make a really good living working about 20 hours/week, especially if you live in a city where the costs aren't outrageous. As said above, you need to talk to a lot of people. As edw519 said above, if you do consulting and talk to enough people, it's surprising how you feel as though you "luck out" and get some good, well paying work.

[gexla]

Sorry, you are not going to get away with it that easy. This is like going up to that hot girl you have been eyeballing and saying "I really want to go through the whole dating process because I really don't understand it, can we just skip all that and get straight to serious relationship?"

This question is nearly impossible to answer and a very personal decision. Nobody here can tell you how much you are worth. For example, am I doomed to crap rates just because I live in the Philippines? No (sorry danohuiginn!)

Figure out how much money you want to make and how many hours you want to work. Remember that you cannot get eight billable hours out of an eight hour day.

As a "consultant" you are running a business. Asking other people how much your rates should be is not a business question, that is a programmers question. You are asking like this is some sort of algorithm you can plug into your code. You need to tweak your mindset a bit.

Edit: How to get consulting work.

Build your brand and visibility. Pick a community (get a bonus for picking one frequented by paying clients) and establish yourself as an authority. Create an open source project which you can point to which shows you know what you are doing.

Network! The area in which I am has more work than there are people available yet there is likely no shortage of people who would love to break in. The reason for this paradox is that I only work with people in my network.

All the freelancers I know are overworked. Often any one of them need help and I can't help them because I am overworked as well. Get to know other developers who are freelancing and ask them if they know anyone who needs a hand.

It's all about that recognizable and trusted brand!

[fortes]

"Remember that you cannot get eight billable hours out of an eight hour day."

This is an extremely important point. When I was freelancing, I was surprised by just how much non-billable overhead time I had (at least 5-10 hours a week when working with 3 clients). To reduce overhead, work with as few clients as possible. But you'll run into dead time that way, since jobs don't start on a dime.

I know a guy who has freelanced for 5 years and kept meticulous records. He knows what he's doing, but says every year he tops out at about 60% of his time being billable. Make sure you factor that into your rate.

It's really easy to take your rate and multiply by 40, thinking that's your weekly salary. This is pretty much never the case.

Also, don't forget taxes.

[jcl]

All the freelancers I know are overworked. Often any one of them need help and I can't help them because I am overworked as well.

Not to be obtuse, but if everyone is overworked, why don't they charge a little bit more so that there is less demand and therefore a more reasonable workload?

Is there perhaps a fixed ceiling above which no one will pay? Or do clients get angry if you keep changing your prices to meet market conditions? Or do companies in your line of work only hire consultants for projects in crisis, such that the only work available consists of high work loads over short periods of time?

[petercooper]

   Remember that you cannot get eight billable hours out of an eight hour day.

You can (and do) if you go on-site, and you can if you actually work eight hours for a single client in any capacity.

You can't bill for doing your office paperwork, promotion, eating lunch and such, but that's not part of an 8 hour "work" day (like your commute isn't part of your work day either).

[prakash]

"How to Set Your Hourly Consulting Rate": http://30sleeps.com/blog/2007/09/27/set-your-hourly-rate/

and another one from Michael Hartl, "How I can charge so much":

http://eikonoklastes.org/articles/2007/09/26/how-i-can-charg...

[mfruhling]

I've done consulting on the microsoft stack and I got between $50/hr and $75/hr on short term gigs. I was also considered on the cheap side by the people who hired me. I think price is greatly determined by whether you're coming from a company or you're an individual. Customers will pay a consulting firm $150-$200/hr or more because they are also buying someone to blame if the project goes wrong. An individual is not going to see that amount. My advice would be to market yourself as a consulting company, even if that is just some of your friends loosely affiliating yourselves with one another. You will get higher rates that way. Another way to higher rates is to have a business domain(s) that you can be considered knowledgeable in. Domain knowledge will separate you from the pack when someone is price shopping, and that knowledge or experience really does make you much more valuable and efficient.

[wenbert]

"they are also buying someone to blame if the project goes wrong" ^_^ sorry had to say it again...

[gruseom]

I am asking for a rough ball-park. I'm looking for a range that people are making from "Oh, my God, they got screwed and will be eating ramen for months." to "I can't she had the balls to ask for that rate." [...] If this is a taboo subject.... my bad.

It's not taboo, it's a great question. Several answers already posted are excellent, but I'll add another. In the market I work in, for independent contractors:

"Oh, my God, they got screwed" => anything less than $40/hr

"I can't [believe?] she had the balls to ask for that rate." => $150/hr or higher

Of course it depends, blah blah blah, but you did say ballpark.

For deciding what you should ask, Jerry Weinberg has a great piece of advice: set your rate so that you're happy either way. That is, not so low that you're unhappy if they say yes, and not so high that you're unhappy if they say no.

Now that I think of it, get Weinberg's Secrets of Consulting and read it. It may save you all kinds of trouble. In case you don't know him, Weinberg was part of the very first generation of programmers, and later became known for his work on human factors on software projects. A lot of his stuff is good, but Secrets of Consulting is a must-read, I think, for any hacker who wants to do consulting work to pay the bills.

Good luck!

[estherschindler]

Absolutely agree on Secrets of Consulting. It was a major revelation to me when I was first starting out.

[rockstar9]

Another question is: How do you even find consulting gigs?

[create_account]

This is how recruiters do it: http://computerconsultants.yuku.com/reply/2987/t/A-fascinati...

In other words, it's more about sales skills than technical ability.

[edw519]

Network, network, network, network, network! (Sorry, I cannot overemphasize this.) You are your own marketing department. All the time. No, you don't have to be one of those Amway pests, but don't be afraid to say what you do and to volunteer your opinion about something computer related. You're not doing it to get business; you're doing it because that's who you are. Even if nothing happens now, it could 6 months later. You never stop networking, no matter how busy you are now.

A few examples:

- Hung out with the same guy at Tuesday night Bible study for 3 years. One day he said, "I heard you tell someone you know something about computers. My company needs software for our factory. Do you know anything about that?" Turned into 50K over the next 6 months.

- Went to an industry dinner/speaker event. The stranger next to me asked what I did. I told him. He asked if I ever did <xyz>. Before I could answer, my partner joked, "That's how we made our first million." The stranger said, "How'd you like to make your second million?" We talked all night and started work 2 days later. 20K in 2 months. All from a joke.

- A contractor friend got a great full time job. She asked me to "take over" her maintenance accounts (3 of them). Many thousands part time over the next 3 years.

- Had another friend who I met for lunch once a month for years. She always talked about her job. One day, she suddenly had to move out of state for personal reasons. I emailed her employer, telling what I did (which was exactly what they had her doing). Turned into 4 years of work.

- Met my aunt's next door neighbor while sitting on her porch. My aunt said, "Eddie's into computers." He said he had a friend who owned a pawn shop with a computer running Windows that "froze" every day at 3:00, their busiest hour. He was going nuts. (Licking my chops), I said I could look into it. A 6 month gig with all new cool software (not Windows).

- Went to a Monday Night Football party. A friend of a friend who owned a small distribution company said the bank wouldn't lend them any more money until they computerized their inventory. After 3 months of me (for $20K), they were able to borrow $300K. Pretty good deal for everyone.

- A friend was offered a 6 month gig in Detroit for $60/hour. He didn't want to move to Detroit. I took it. Got an efficiency for $400/month, drove my own car there, and dialed in to my other clients. 6 months later, moved home. Not a bad deal.

- Had another friend who owned a small software house. (Didn't know it until I knew him for over a year). He coded everything with linked lists because he didn't know anything about databases. I converted all his software to DBMS over a 6 month period. Again, everyone happy.

I could go on and on, but you kinda get the picture. And I haven't even touched on the web stuff.

The demand still far outweighs the supply for good software. If you know what you're doing (a big assumption), there's millions of people who need what you do. So get out there and talk to them!

[bigtoga]

Why threadjack when you could've created a separate thread? This guy made a post and you totally are trying to threadjack. Make your own"Ask YC" thread and post it there.

[quellhorst]

I bill $125/hr for Ruby on Rails development work. If you are the Rails core type that writes books and presents at confs you can charge $200/hr. If you are new and just starting out you may get $50/hr.

In the software world it seems people are scared to talk $. Be upfront about what you charge so you don't waste time talking to those unwilling to pay what you are worth.

[petercooper]

I bill at $800 a day in the Ruby space. It's not that often though, because I'd rather work on my own stuff than other people's!

From my experience, this is not on the high side, though perhaps slightly above average.

[bjclark]

Peter Cooper (like, RubyInside Peter Cooper?) only costs $100 an hour?

Noted.

[subwindow]

Not to sound blunt, but you can charge whatever you feel you're worth. I've never had a client blink when I told them what my hourly rate was. They do a calculation in their head, but it is not "Is this too expensive?" but it is "Do I think this guy is worth it?" Chances are if you yourself feel that you're worth that amount, they will too.

That said, DB consultants generally make a bit more because of the fragility and messiness of what they deal with. I've done some Oracle consulting at $100/hr and that, I realize now, was a very low rate.

[randallsquared]

To provide an anecdote the other way: I do small business software and webhosting in the southeastern US, and I have often had prospective clients seem taken aback when I mention my rates, which are nowhere near the rates being bandied about in this thread. If you choose to sell your services to small businesses, be prepared to fit into a reality where the client thinks $80 an hour is a terribly high amount for a 5-10 hour job, and is prepared to just not have the work done instead. Very little is actually required for most small businesses; some of them are still considering upgrading the old machine running Win98 that's been doing invoices for 10 years, and unless it breaks, it's "good enough".

[huherto]

Do not forget to put time in the equation. A consulting job of one month has a higher price per hour than a contract of three months. That is because a one month contract solves your money problem for one month, but then you may spend another month finding your next job.

[andyjenn]

As a boring freelance Oracle consultant, I can bill 450-500 GBP/day... interesting LAMP and Web based roles seem to be around half that.

[sabat]

Considering that's > $1000 per day (probably closer to $1500 -- haven't dared to check the exchange rate these days), and $500/day for a LAMP project ... hey, that's not bad.

[ssharp]

You should consider reading some of Alan Weiss' consulting books. He really advocates project/value based fees instead of time based fees.

Million Dollar Consulting: http://www.amazon.com/gp/redirect.html?ie=UTF8&location=...

Getting Started In Consulting: http://www.amazon.com/gp/redirect.html?ie=UTF8&location=...

Value Based Fees: http://www.amazon.com/gp/redirect.html?ie=UTF8&location=...

I'd recommend these three books and check out his website @ http://www.summitconsulting.com/

[mechanical_fish]

He really advocates project/value based fees instead of time based fees.

This guy is not a software consultant. So beware, beware, beware this advice, because that little detail matters a lot.

It's easy to charge project based fees when you (a) are an expert negotiator and speaker and (b) your project is not built of either hardware or software. If the deliverable is a paper report, a Powerpoint presentation, or a new org chart, it is relatively easy to work around or gloss over any problems that arise and still deliver on time and make the client happy. You have a ton of flexibility. Unless you're drafting legal documents, editing the English or changing the color of a graphic has no wide-ranging ramifications.

If the deliverable is a working machine, you're up against the laws of nature:

For a successful technology, reality must take precedence over public relations, for nature cannot be fooled. -- Richard Feynman

You'll end up running three weeks late because the client makes a "trivial" reinterpretation of the spec at the last minute, and the old library won't meet the new spec, but the new version of the library will, so you upgrade, but the new version has a different API, and one of those new API calls has a bug...

[UPDATE: This link, recommended elsewhere on the page, has a succinct summary of the argument in favor of time-based fees: http://30sleeps.com/blog/2007/09/27/set-your-hourly-rate/ ]

[schlegelrock]

For engineering skills and in the bay area start at $65 an hour then add $5 per year of solid work experience. Add 20% if the company is public.

[estherschindler]

Incidentally, while the earlier link to the "what do I charge" is a good one, most of the computer consultants' discussion has moved to http://openitforum.yuku.com/ -- nice folks, too.

You can also find more data at Janet Ruhl's realrates.com. It is a database where people share how much they're getting for what kind of work. The home page is no longer updated but the database is live with people adding info.

[suboptimal]

You are El Gringo,

Regarding the message in your edit, thanks for your post--this is (mostly) a helpful discussion. Just search for the dollar signs (norcalgrrl had a good response, as did a few others).

And good luck with your freelance career!

[spolsky]

there's a whole obsessive-compulsive website called realrates.com on exactly this subject.

[create_account]

That site is garbage.

[iamelgringo]

Thanks.

[danohuiginn]

"the pay rate varies by geography, industry, computer language and technology."

Mainly, it varies depending on whether you're any good (and whether people know that you're good). If you're asking "how high should I set my rate" - unfortunately, I don't think there's an easy answer to that, without knowing you.

[iamelgringo]

I realize that a lot of this is going to be personal network specific--who do I know that's willing to get me a contract gig. I also realize that it's going to be talent specific.

But, I'm mostly looking for ballpark figures, I'm not really interested in rate setting. I'm career changing, and I should be graduating from school after this summer. I'm mostly trying to get a feel for rates.

[xirium]

> I'd also love to hear what DB consultants are making as well.

I used to be consulted out at 2000 Euros per day.

[menloparkbum]

going rates are whatever you can get. I've seen from $20/hr to $200/hr. The high rates are usually for something horrible like "Oracle Financials." Most LAMP/Django/RoR independents charge somewhere between 50-100.