This is a great reply, and provides a lot of great insights. As Kevin pointed out, about a third of his time wasn't developing the project. In my experience, that's about right. So if you really want to get a target salary at a target of 40 hours a week, there's some additional math to do there. I'd strongly recommend that you take your estimated time to complete the project, factor it up by your "estimate vs reality" ratio (i.e. double it), then add your "safety margin" percentage (say 10%, but may be higher with some projects/clients), and then add in your non-development time. Your if your non-dev time is about a third of your work, then add 50% to whatever you have so far.
This is where you'll find out how much your work is really worth to clients - this takes a project you thought you could do in 10 hours at $75 an hour and turns it into 20 hours (typical reality based on your estimating), 22 hours with your safety margin, and then make it 33 hours after your 50% non-work time bump. That makes for a $2475 price tag on what you thought would be a 10 hour project at $75/hour. If the value of your work in their business isn't that high, you have a few of choices. Lower your price, shrink the scope until you find a happier ROI place, or pass on the project. Obviously, lowering the price isn't a great negotiation tactic, as you'll have a hard time raising it again with this client. Shrinking scope might work, sticking to just the "big bang for the buck" features. Passing on the project is only good for you if you have other projects that will pay what you're asking, and isn't sustainable if you can't keep busy. The framework Kevin proposes below is quite comprehensive and a good starting point for understanding the costs in running your own business. Other places to make some money are by bringing in help: for example, if you sell a project that includes some work that won't be done by you (like design, another dev you can have help you, or hosting services, etc.) there is room to embed some markup there as part of your value-add. Remember that your time planning and architecting the project can often be one of the most valuable parts of the work, because it ensures you're doing the right things in the right way, and solves problems your client probably didn't know how to solve without your help. Don't undervalue it. When I was self employed, we often found it was successful to sell a client a $1000-2000 planning/design package, giving them the option to take the plan we made and bid it out with others, or to have us continue to develop it at that point. It made sure we got paid for our work, whether or not they went with us, and gave them a lower tag to say Yes with and then get to know us and what we would bring to the table. Thanks, Mac On Mon, Nov 20, 2017 at 10:31 AM, Kevin Jensen <[email protected]> wrote: > I've been doing freelance work full-time for the last year and a half, and > I have learned a lot about running a freelance business and I wish someone > would have been up front about it with me before I got into it—so, here > goes. > > I have not worked worked in a corporate environment so I really can't say > if I'm Jr. / Mid / Senior. I've been using PHP / MySQL since 2004. I did > freelance development part-time from 2009 - 2015, then full-time in July > 2016 to present. I've mostly done Laravel / Angular, but am moving to > Laravel / Vue. > > The wage thing is something I worked at for quite some time trying to > figure out. I started out charging $30/hr because I had nothing to base the > wage off and I honestly thought the wage would break down like a normal W-2 > job. I also had not run a business on my own so I really didn't know what I > was doing (the previous part-time freelance I had a partner who handled the > business end). I didn't really figure in the cost of running the business. > So it broke down like this: > > Billed Wage $30.00 / hr > Hours 38.08 > Total Pay $1,142.40 > Retirement $68.54 > Insurance $118.75 > Federal Income Tax $146.71 > Affordable Care Act $4.98 > Federal Health Insurance Deduction $13.90 > Federal Insurance Contributions Act $59.45 > Utah State Income Tax $44.91 > Reserve Pay $78.90 > Operating Costs $20.00 > Net Pay $586.26 > Net Wage / hr $15.40 > Net % of Gross 51.32% > That is an actual one-week pay period for me the end of 2016. > > - Being self-employed you have to pay your income tax *and* your > corporate tax. I decided to get an accountant because trying to read / > understand all the tax laws was time consuming and nearly impossible for > me. I just wanted a number, but the IRS and Utah State Tax Commission > don't > provide a clear answer. :( > - My insurance was through Liberty HealthShare > <https://www.libertyhealthshare.org/>. It wasn't the best insurance, > but > it was cheap at $475 / mo for my family of 4. It was a cash up front > then > get reimbursed by the insurance plan. > - Reserve pay is money saved for vacation and holiday pay. 2.63 hr / > week. That was 80 hours vacation and 40 hours paid holiday. I learned > the > hard way that if you don't save for vacation, you don't get any. xD > - Operating costs $60 / month included (I overspent / under estimated > this category in 2016) > - Quickbooks Online $15.00 / mo > - Accountant Costs $250 / yr > - GitHub $7.00 / mo > - G-Suite $20.00 / mo > - Trello $5 / mo > - Toggl $10 / mo > - PHPStorm $99 / yr (first year) then $199 / yr > - hosting $65 / yr > - Google Cloud Platform ≈$5 / mo > - Misc ≈$15 / mo (includes books, WordPress themes, Laracasts, udemy, > etc.) > - $220 / yr travel > - Business Licensing, state $15 / yr, city $110 / yr ($110 is *very* > high) > > I would recommend not basing your wage off what you think customers will > pay, but based on your personal and business needs. I worked backwards to > get my current rate: > > Target Salary $80,000.00 > Monthly $6,666.67 > Weekly $1,538.46 > Daily $307.69 > Hourly $38.46 > > Billed Wage $30.00 / hr $50.00 / hr $75.00 / hr $100.00 / hr $120.00 / hr > Hours 38.08 38.08 38.08 38.08 38.08 > Total Pay $1,142.40 $1,904.00 $2,856.00 $3,808.00 $4,569.60 > Retirement $68.54 $114.24 $171.36 $228.48 $274.18 > Insurance $118.75 $118.75 $118.75 $118.75 $118.75 > Federal Income Tax $146.71 $289.79 $435.44 $581.10 $697.62 > Affordable Care Act $4.98 $4.98 $4.98 $4.98 $4.98 > Federal Health Insurance Deduction $13.90 $27.46 $41.27 $55.07 $66.11 > Federal Insurance Contributions Act $59.45 $117.43 $176.45 $235.48 $282.70 > Utah State Income Tax $44.91 $94.70 $142.30 $189.90 $227.98 > Reserve Pay $78.90 $131.50 $197.25 $263.00 $315.60 > Operating Costs $35.00 $35.00 $35.00 $35.00 $35.00 > Net Pay $571.26 $970.15 $1,533.20 $2,096.24 $2,546.68 > Net Wage / hr $15.00 $25.48 $40.26 $55.05 $66.88 > Net % of Gross 50.01% 50.95% 53.68% 55.05% 55.73% > > So to meet the $38.46 / hour I decided I needed to average $75 / hr billed > to the customer. Depending on the project my rate will vary, but as long as > I average $75 it seems fine. Some customers will just not be happy seeing a > price like that, others are totally fine with it. > > When it comes to quoting projects, I've found I'm terrible at it. I > apparently have no concept of time. So I started doubling what I *think* it > will take and adding 10%. What I've found doing this is it starts > conversations with the customer. They become a bit more vested in the > project because they see the big price tag and it gives you a chance to > really talk about what they want and refine the estimate and ultimately > become more involved. It is really hard developing something with an > ambiguous vision and a small budget. > > The biggest thing though is understanding how much time you will actually > be coding. I assumed I would be spending like 90-100% of my time > developing, but it's probably more like 60-70%. I spend a lot of time > talking to and meeting with customers, invoicing, bank reconciliations, > asking customers to pay their bills, finding new customers, attending > business conferences, meeting with marketers, etc. And none of that time is > billable, so this is just on top of the 40+ hours of development time > needed to meet my desired income requirements. > > As for where to find clients, there are lots of resources: > > - Word of mouth (awesome once word gets around, not so good when first > starting) > - Business to Business conferences - Sit at a booth and hand out > business cards and talk to other business owners > - Your local Chamber of Commerce - Chambers end up being very click-ish. > If you join many of the other members may come to you for support > - Marketers - They are working with people who are (or want to be) > online. The customers seem to understand the need for a developer, > whether > it is developing a website or a web application. > - Your local SBDC <https://utahsbdc.org/> - They work with small > business locally. One downside is that most of these are startups and > they > don't always have funds and may default on payments. :\ > - Y Combinator <https://news.ycombinator.com/> - It's a bunch of tech > start ups and they are looking for help > > Sorry if this was a bit of a ramble. Hopefully some of it is helpful. If > you have questions, feel free to ask. I've loved doing freelance work. It's > hard and stressful, but I find it to be worth it. > > On Sun, Nov 19, 2017 at 2:41 PM Frank <[email protected]> wrote: > > > Well I don't know anything I provide to the mailing list gets moderated. > I > > guess I am blacklisted. > > > > Frank Yingst > > > > -----Original Message----- > > From: [email protected] [mailto:[email protected]] On Behalf > > Of > > Patrick Curl > > Sent: Sunday, November 19, 2017 14:34 > > To: UPHPU General Discussion > > Subject: [UPHPU] General Inqury: How much is an Intermediate PHP/Laravel > > Freelancer worth hourly? > > > > I just got off working for a corporate contract that lasted about 15 > > months. > > > > I liked the 40 hours/week but was only paid $30 an hour. I'm wanting to > get > > into freelancing for the flexibility and hoping I can fit in some side > > projects between working on client work. > > > > Lately I've been going for and in some cases getting 40-50/hour. Though, > if > > I quote 15 hours and go over I have just been eating the extra hour or > two. > > > > I definitely have imposter syndrome like most devs, but I do feel more > > confident after working the long gig on a team of 10 devs using scrum/git > > every day. > > > > My question: What level (Jr / Intermediate / Senior) do you feel you fall > > into, and what do you feel is a decent freelancer wage per hour? Any tips > > or > > suggestions on freelancing in general to improve my business? Also where > do > > you find clients - reddit has been my best lead source so far. > > > > Thanks for participating. > > Patrick Curl > > http://patrickcurl.com/resume > > > > _______________________________________________ > > > > UPHPU mailing list > > [email protected] > > http://uphpu.org/mailman/listinfo/uphpu > > IRC: #uphpu on irc.freenode.net > > > > > > _______________________________________________ > > > > UPHPU mailing list > > [email protected] > > http://uphpu.org/mailman/listinfo/uphpu > > IRC: #uphpu on irc.freenode.net > > > > _______________________________________________ > > UPHPU mailing list > [email protected] > http://uphpu.org/mailman/listinfo/uphpu > IRC: #uphpu on irc.freenode.net > -- Mac Newbold [email protected] 801-694-6334 <http://www.codegreene.com> _______________________________________________ UPHPU mailing list [email protected] http://uphpu.org/mailman/listinfo/uphpu IRC: #uphpu on irc.freenode.net
