How much should I charge for Rails programming?

Question

I have been asked to quote an hourly rate for freelance programming for a Rails project. Although it would be my first paid project on Rails, I know the technology well from personal projects and have a decade of professional programming experience. This would be my first freelance project ever, so I have no idea how to find out what the going rate for my services should be. Obviously, if I quote a rate that is too high, they may choose someone else - too low and I may feel cheated later on. Any suggestions?

Update: I am in NYC and the project is scheduled for 6 months to a year (but this seems unrealistic - I think it will be a multi-year project). I would develop on site (at a corporate location) with one other developer and the project would consist of about 200 custom-built pages initially. 10 hour days with weekends and additional overtime as required. The customer has given no information about how much they will pay - "a competitive rate" - they want me to start the discussion.

Answer 1

You will never get a correct answer to this, there are too many variables:

• Your experience in Rails
• Your experience in other things
• Where you are based (rates vary from region to region, country to country -- where are you?)
• How long is the contract?
• Is it fixed priced, time or time and materials?
• How much does the customer WANT to pay?

I'd personally be wanting a figure that makes me feel happy with the deal I negotiated, even if later I feel I could have gotten away with charging more...

Answer 2

Start with $80/hour. You can increase your rate by $20/hour every three months but first you need to get your foot in the door and make them dependent on you.

Answer 3

Given that you're in NYC and it sounds like it could be a big project, I like Patrick's recommendation but I think you could start higher - maybe $100/hour and go as high as $200 or more eventually, depending on the depth of the client's pockets the and value of your contributions.

Answer 4

First of all, know your competition. What are the alternatives for your customer? I would guess another contractor, or a consultancy, so it would make sense to find out what other Rails contractors are charging and what consultancy companies are charging. Ask a few consultancy companies for quotes, see if you can get some quotes for work from individual contractors.

Then, think about your alternatives. How much would a permanent job pay? How much could you get in another contract? Ask a few job agencies to quote you some sample rates (these may be a little inflated in order to secure your interest). Then decide which rate would satisfy you for this contract compared with these alternatives.

As per Ray Hayes post, there are a lot of variables so it's incredibly difficult to state what rate you should aim at. In the end it's market that decides your rate, and the mechanism is the comparison of the competition, both for your customer's contract and for your time.

Answer 5

I'm not really sure on what to advise you :) . Since it's your first paid project you should take a couple of things into consideration :

• the other developer may not be able to keep up with you

• 10 hours/day is a bit too much work ( my opinion )

Here's a bit of advice :

• tell them that for the first month you'll charge less ( so that they can have the opportunity to see how you work/code ) - this way , if you are not satisfied with the work conditions , you haven't wasted that much time ( yours and theirs ) on this project . If after the first month , you discover you can keep up with their requirements , renegotiate your fee .

Answer 6

25$/hr. Why? Because working 10hr/day seven days a week will make you tired as hell and your productivity won't be worth more than a junior pay after a couple of weeks.

Then again, you might be a marathoner -- I'm speaking from my own experience. When I work 10 hours a day for more than four days I just sit and stare into the code, not understanding what the hell is going on there. And there's some more overtime as you said it!

Common! You most likely can't code efficiently for more than 4-6 hours a day. Don't be a hero, be a professional and ask for a high rate on quality hours.

Answer 7

Some other things to take into consideration. Do you have health benefits, and will you need to buy them on your own? Will you be self-employed - hence having to pay the self-employment tax that your employer normally matches? What are you making now?

The rough rule of thumb would be to double what your hourly rate equivalent would be now. However, it also comes down to how much you want something. I've had offers where I really didn't want the gig (involved flying out to the site) and I quoted a pretty high rate (I think for one I quoted roughly $350 per hour).

If you really want to do this, and are using it as a stepping stone, then figure out what you need to make and propose that. Don't think you'll be able to increase later on if you don't write that in from the beginning. Now is the time to negotiate.

Answer 8

How much is the other guy getting?

Answer 9

Honestly, I look at it from a different standpoint than these folks.

I look at the following factors:

1. How badly do I need the money right now - less cash flow right now means I'll charge less if the market is slower so I can get some income.
2. How 'fun' is the project? If it's something that I find very tedious and boring to do - I might flat out say no or charge more.
3. How well do I know the person? Some people I'll charge less (or more) depending on the relationship. How difficult are they to work with? how often do they change requirements? How well do they communicate? Etc.
4. How much of my time is it going to take? If it's a long term project I might charge a bit less because of the stability it provides. On the other hand, if it's a very short project like a week or two - I might charge more for the 'nuisance' factor of switching gears often.
5. Is it likely I'll get repeat work from this client?
6. Does the client have resources I want to use. Not necessarily hardware resources but people...I.E. Does he have some people that I want to meet and work with in the future?
7. How restrictive are the contracts the client wants you to sign? If he wants to stop me from working in the field for a particular period of time, sure I'll do it - at a cost...
8. Do I know the material well? Do I want to learn it? I'll charge them less if I can get some on the job training.

Those are just a few of the things I consider when I'm looking at what to charge. I've often found that comparing my rates to others rates just doesn't work for me.

Answer 10

I wouldn't charge anything less than $75/hour.

I would recommend watching the following presentation from Obie Fernandez that he gave at RubyFringe.

http://www.infoq.com/presentations/fernandez-sales-do-the-hustle

Summary
Obie Fernandez will leverage his experience successfully selling consulting services for both Thoughtworks and Hashrocket to help you with the following questions: How do I figure out how to price my services? How do I figure out the kind of work I want to sell? How do I write contracts and statements of work? What about proposals? And RFPs? How do I close the deal?

Bio
Obie Fernandez is Founder and CEO of Hashrocket, a boutique web consultancy and product shop headquartered in Jacksonville Beach, Florida. He has a blog http://obiefernandez.com/ and speaks at conferences and technical user groups on a regular basis. He is a series editor and book author for Addison-Wesley.

About the conference
RubyFringe is an avant-garde conference for developers that are excited about emerging Ruby projects and technologies. They're mounting a unique and eccentric gathering of the people and projects that are driving things forward in our community.

Answer 11

So the folks quoting numbers are probably in the right range if they say $75 to $200 an hour. But that's not probably the right way to think about it.

You've been doing programming 10 years, and you already live in NYC. So you know much you've been paid on full time work. Take that number, divide it by the number of hours you've worked, then double that number.

So if you make $140,000 USD Per year on salary, that's 50 weeks a year at 40 hours, which is 2000 hours per year, which is $70 per hour. Double that and you've got a base for hourly consulting, $140 per hour.

Now because this is a long term contract, with a lot of hours, and not much unpaid prep work, you can give a discount on that if you want. But here's the deal, they're expecting to pay double per hour what they'd pay a salaried programmer. So if they would pay a full time staffer $140k per year, then they'd expect to pay you $140 per hour.

Remember by having you on contract they are saving a lot of money, and you are getting overhead and tax burdens. If you want, you can say the rate, then if they have questions, followup with how you arrived at the number.

The highest rate i've heard for a multi-month project basically full time rails dev is a 3 month project which was at $200 per hour in silicon valley.

Answer 12

This has come up in the Rails Biz mailing list a few times. Check the archives, you'll find some sound advice on how to calculate your hourly rate.

Answer 13

Additional good general FAQ on setting rates in various service industries:

http://www.hwg.org/resources/faqs/ratesFAQ.html

Answer 14

Remember that when you don't like the job, 10 hours a day becomes very heavy.

Answer 15

Hourly billing isn't transparent, it's unethical. The longer the client waits, the richer the consultant gets (if you consider a couple of hundred bucks "riches"). If you want to be a commodity, bill by the hour and suffer price competition. If you want to be a consultant, bill according to the value of the results you help generate. Helping a client in five minutes is far more valuable than five weeks, so why not believe in yourself and charge for your talent not your time? I'm outta here!