I've only recently joined the group (and only recently started working professionally with ruby), so I had to dig through the archives to read the other responses.
I've had a lot of discussions with game developers on this topic, as they're also in the class of people who routinely undersell themselves. Nicholas' post contains some great advice for cost-based pricing, *but*, personally I think this is a terrible approach and you should aim for value-based pricing instead. Two very smart and wealthier-than-most-of-us people agree: - Patrick McKenzie (patio11 on hackernews) - http://www.kalzumeus.com/2012/01/23/salary-negotiation/ - and Ramit Sethi (the iwillteachyoutoberich.com guy) - http://www.kalzumeus.com/2012/09/21/ramit-sethi-and-patrick-mckenzie-on-why-your-customers-would-be-happier-if-you-charged-more/ Both of these guys have some great blog/video content on value-pricing. Put simply, work out how much your effort generates for your clients, and charge a percentage of that. There's a few good reasons this works. First up, if your client already knows the value you're likely to deliver and you can also work this out and agree with them, it's much harder to underpay you. At the very least they'll feel very guilty about paying you $75/hr for a 2% increase in conversions on a $15M revenue application. If you can deliver that result, you're making them near 2% of $15M year on year, and deserve a butt-load more than $75/hr. Second, if you conclude that the value you're adding results in a billable rate close enough to or below what you'd charge in a cost-based pricing model, you've just learnt that your client's business isn't scalable. This tells you, for example, not to discount your rate based on a possibility of future work, because they'll probably go out of business soon enough. Thirdly, you'll be better off if you only work for people who understand the monetary value of your work. People who don't understand this hire people who don't understand this. People who *do* understand it hire people who *don't*, at very cheap rates, and people who *do*, at what they deserve. Two caveats with this. Firstly, I'm in full-time employment, so maybe my advice is complete bullshit in the consulting world. I doubt this. Secondly, to pull this off, you need to be very clear about your skills and ability to deliver the value you calculate. At any rate, even if you don't buy my argument, read those blog posts above for a more thorough look at this stuff. Cheers, Tom -- You received this message because you are subscribed to the Google Groups "Ruby or Rails Oceania" group. To unsubscribe from this group and stop receiving emails from it, send an email to rails-oceania+unsubscr...@googlegroups.com. To post to this group, send email to rails-oceania@googlegroups.com. Visit this group at http://groups.google.com/group/rails-oceania?hl=en. For more options, visit https://groups.google.com/groups/opt_out.
