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charlesju
Jul 30, 2008, 12:40 PM
Hey Guys,

I'm thinking about doing some consulting work next year (I haven't learned the iPhone SDK well enough yet). What do you guys suggest as a target hourly rate for a consultant? And is it worth it to apply for some sort of limited liability company?

- Charles



Jeremy1026
Jul 30, 2008, 12:45 PM
Hey Guys,

I'm thinking about doing some consulting work next year (I haven't learned the iPhone SDK well enough yet). What do you guys suggest as a target hourly rate for a consultant? And is it worth it to apply for some sort of limited liability company?

- Charles

Depends on experience, skill, negotiating skills, and nature of the project. I think that for someone starting out about $20/hr would be a good starting point. On average full time professional computer programmers are making about $45/hr. So you just have to gauge where you are at.

iShater
Jul 30, 2008, 12:45 PM
Are you specifically saying consulting to do iPhone development? or more than that?

ayasin
Jul 30, 2008, 01:39 PM
Depends on experience, skill, negotiating skills, and nature of the project. I think that for someone starting out about $20/hr would be a good starting point. On average full time professional computer programmers are making about $45/hr. So you just have to gauge where you are at.

Where are you looking that embedded/mobile developers are making 45 an hour? We charge $110/hr and we have lots of work at that rate. Also 20 an hour is WAY too low. 45 an hour is a starting rate if this is your first gig.

iShater
Jul 30, 2008, 01:50 PM
There is a difference between what a company charges a client and how much the consultant gets. But I agree that $20 for any programming gig is waaaaaaaay too low, starting is probably in the $40s and goes up with experience.

Jeremy1026
Jul 30, 2008, 01:55 PM
Where are you looking that embedded/mobile developers are making 45 an hour? We charge $110/hr and we have lots of work at that rate. Also 20 an hour is WAY too low. 45 an hour is a starting rate if this is your first gig.

http://online.onetcenter.org/link/summary/15-1031.00

"National
Median wages (2007) $39.97 hourly, $83,130 annual
Employment (2006) 507,000 employees
Projected growth (2006-2016) Much faster than average (21% or higher)
Projected need (2006-2016) 300,000 additional employees"

firewood
Jul 30, 2008, 02:02 PM
I've heard that the typical rates for someone with experience in big U.S. cities ranges roughly from $50/Hr to $200/Hr, depending on the developer's experience and any special expertise that is required for the project.

For specific expertise (legal forensics and such), I've even heard of much higher consulting fees. And you might be able to get a hungry CS student with minimal experience, and away from high tuition universities, for less than that range.

That's a wide range, but a developer's ability to deliver a complex app can vary by an even larger ratio.

Note that most consultants charge around 1.5X to 2X the rate of hourly employees in order to cover taxes, benefits, and other costs of doing business.

.

AvSRoCkCO1067
Jul 30, 2008, 02:02 PM
http://online.onetcenter.org/link/summary/15-1031.00

"National
Median wages (2007) $39.97 hourly, $83,130 annual
Employment (2006) 507,000 employees
Projected growth (2006-2016) Much faster than average (21% or higher)
Projected need (2006-2016) 300,000 additional employees"

Doesn't that assume that these guys are working 8 hours/day, though?

I'd say start with $40/hour.

caldwelljason
Jul 30, 2008, 04:29 PM
Avg. hourly wage is different than average consulting rate. A consultant buys his own tools, has no benefits, pays for his own vacation, pays his own building and power overhead, has marketing and sales responsibilities which are not billable, and on and on.

A good rule of thumb is that as an independent, you should charge three times the hourly rate you'd get for the same work at a full-time job. So if you would make $40K, $50-60/hr. is fair. If you would make $100K, then $150+/hr. is fair. If you're really good, you can get much more than that. But remember that you probably won't actually bill anywhere near the 2000-2200 hours/year that your salary is based on.

If you are a company of multiple people billing a consulting rate, it is usually higher than the 3x markup because you (should) have more stability, more scalability, more expertise, and more overhead expenses.

Beau10
Jul 30, 2008, 05:18 PM
A good rule of thumb is that as an independent, you should charge three times the hourly rate you'd get for the same work at a full-time job. So if you would make $40K, $50-60/hr. is fair. If you would make $100K, then $150+/hr. is fair.

If we're talking about a long term (ie. 6+ mos out) contract at 40hrs per week, you can expect about 30-50% more as a consultant. If you're working for 2 weeks, yeah, maybe 3x more lol.

An entry level engineer, fresh out of a good school with a CS degree, would start here in San Diego ~$55-60k. On full-time contract they would get $40-45/hr. Someone like me who's senior level makes about $90-120k can expect $60-75.

This is not speculation or theory. This is real world talking to hundreds of recruiters, job postings, giving interviews, being in the freaking industry, for a dozen years now in southern California. So take it FWIW.

caldwelljason
Jul 30, 2008, 05:34 PM
If we're talking about a long term (ie. 6+ mos out) contract at 40hrs per week, you can expect about 30-50% more as a consultant. If you're working for 2 weeks, yeah, maybe 3x more lol.

An entry level engineer, fresh out of a good school with a CS degree, would start here in San Diego ~$55-60k. On full-time contract they would get $40-45/hr. Someone like me who's senior level makes about $90-120k can expect $60-75.

This is not speculation or theory. This is real world talking to hundreds of recruiters, job postings, giving interviews, being in the freaking industry, for a dozen years now in southern California. So take it FWIW.

Agreed on the length changing the rate. If you have a 6 month+ contract, that minimizes the amount of time that you won't be billable. You have less sales and marketing work and less potential downtime.

At the same time, even on a long-term contract, you are paying your own benefits, paying a higher (self-employed) tax rate, buying your own tools, and taking a higher risk. The client has the benefit of not paying unemployment insurance, workers' comp, or FICA on you; not buying hardware or software licenses for you; potentially not paying for space for you to work, phone service, internet access, etc; not having to pay IT to support you and any problems you have with your computer; not matching your 401k contributions; not having you participate in any company ESPP; and not having to lay you off and rehire someone else when their IT needs and finances cycle up and down. A 30% price difference barely makes you the same price as an in-house person (if that) and leaves you with all the risk over the long term.

I am also speaking from experience, both as an independent contractor and as an employer.

But you're definitely correct that you can't get 3x on a long-term contract. No one would be able to afford to keep you around very long. :D

iShater
Jul 30, 2008, 05:37 PM
You are both correct. :D

Time for me to get back into the permanent, after that list of all the benefits I a missing out on, I think it is definitely time. :cool:

Beau10
Jul 30, 2008, 05:57 PM
I am also speaking from experience, both as an independent contractor and as an employer.


Curious, where do you find work like this? Is it primarily reference based? I have to ask as I've never seen rates like this before.

The record I've seen coming my way (ie. something I'm qualified for given my skills/experience primarily as a Sr. .NET developer) from a head-hunter/job posting was $80/hr for a 3 month gig. A couple years ago I was the lead on a Windows Mobile product and used a consultant agency to get three developers on for a little help. They billed the regular devs at $100 and the sr. dev at $150, they were with us for 3 mos each working about 10 hrs/week. So short term work from an agency. Maybe we got a stellar deal?

EDIT: btw, I won't argue there isn't highly specialized work out there that can command very high rates. I knew a guy at the turn of the millenium that would command $1500 to translate NT Core dumps, something that would actually take him less than 30 minutes to do. But he used to work on the NT kernel team, which makes him part of a very limited talent pool, and at the same time would only get a few of these a month.

caldwelljason
Jul 30, 2008, 06:09 PM
Curious, where do you find work like this? Is it primarily reference based? I have to ask as I've never seen rates like this before.

The record I've seen coming my way (ie. something I'm qualified for given my skills/experience primarily as a Sr. .NET developer) from a head-hunter/job posting was $80/hr for a 3 month gig. A couple years ago I was the lead on a Windows Mobile product and used a consultant agency to get three developers on for a little help. They billed the regular devs at $100 and the sr. dev at $150, they were with us for 3 mos each working about 10 hrs/week. So short term work from an agency. Maybe we got a stellar deal?

I don't know if that's a stellar deal. It sounds like the very top end of what I suggested a rate could be for a person like that on a short-term gig.

Granted, you were going through an agency, and they took a cut. But if you needed more work done on that project in the future, and found out those developers had left the agency and were independent, wouldn't you call those same people back (assuming they did you a good job) and pay them a little less than that to deal directly with you? (This assumes neither you nor they have a contract with that agency preventing such a thing.)

iShater
Jul 30, 2008, 06:11 PM
Are you sure you paid THEM the $100-$150 vs. their contracting company?

caldwelljason
Jul 30, 2008, 06:19 PM
I didn't mean to start a holy war on consulting prices. I was just trying to provide my experience as one measure.

Obviously, the nature of a market economy is that you are worth what you can get in the market. If you try to get $100+/hr and can't, lower your price. If you try to get $40/hr and are turning away work, raise your price.

The 3x benchmark was given to me when I was in business school 15 years ago and isn't IT specific. It's the benchmark I've tried to use ever since then and have been relatively successful, although I am not a rock star. It is a rate based on short-term, high-value services, rather than long-term contracts.

I just had a guy bid me $124/hr last week to help me get my feet wet in Mac programming. I can't afford that right now on this project, so I didn't hire him. If I'm typical, he'll lower his rate.

iShater
Jul 30, 2008, 06:21 PM
I don't think anybody started a war guys, this all very useful information to the OP and to me! :D

Beau10
Jul 30, 2008, 06:24 PM
Granted, you were going through an agency, and they took a cut.


Isn't that cut very sizable? Last fall I interviewed for a 6 mos contract at $70/hr, represented by an agency. I asked the recruiter what the agency's take would be. He said $120.


But if you needed more work done on that project in the future, and found out those developers had left the agency and were independent, wouldn't you call those same people back (assuming they did you a good job) and pay them a little less than that to deal directly with you? (This assumes neither you nor they have a contract with that agency preventing such a thing.)

Of course I would. But that's a unique situation and shouldn't dictate how the market operates.

Beau10
Jul 30, 2008, 06:33 PM
I don't think anybody started a war guys, this all very useful information to the OP and to me! :D

Yeah, no war, no harm or anything intended :D

I'm totally open to learning something in this discussion. If I have a dissenting attitude it's just because I haven't seen something in an industry I've been around in for awhile, so my natural inclination is to question it. That's all.

iShater, invoices were paid to the agency.

iShater
Jul 30, 2008, 06:45 PM
I'm in the middle of a negotiation to extend my current contract for different type of work, so will call the agency tomorrow to see their response to my rate hike. Should be an interesting discussion. :)

gauchogolfer
Jul 30, 2008, 07:07 PM
I'm in the middle of a negotiation to extend my current contract for different type of work, so will call the agency tomorrow to see their response to my rate hike. Should be an interesting discussion. :)

I hope that the negotiations go favorably for you. :)

iShater
Jul 30, 2008, 07:08 PM
I hope that the negotiations go favorably for you. :)

Thank you sir! I am only asking for a few extra bucks an hour. :o

JNB
Jul 30, 2008, 08:53 PM
Remembering that you won't be able to actually bill 40 hrs/wk, I think that up to $50/hr would be fair, depending on your skill and demand. Considering, though, that I bill out at $337.50/hr right now (it's "after hours"), you only owe me $287.50. I can PM you my PayPal info... :p

ayasin
Jul 30, 2008, 11:26 PM
http://online.onetcenter.org/link/summary/15-1031.00

"National
Median wages (2007) $39.97 hourly, $83,130 annual
Employment (2006) 507,000 employees
Projected growth (2006-2016) Much faster than average (21% or higher)
Projected need (2006-2016) 300,000 additional employees"

These types of databases are almost useless. They include VB.NET programmers, Web developers, and embedded developers as if they were one group and billed out at the same rate. We're much more specialized than that, just like a doctor...if you want to see a GP (web type developer etc) expect to pay around $45/hr...if you want a specialist (embedded/C++ guru/device driver dev) expect to pay much more.

El Pato
Sep 4, 2009, 12:27 PM
Where are you looking that embedded/mobile developers are making 45 an hour? We charge $110/hr and we have lots of work at that rate. Also 20 an hour is WAY too low. 45 an hour is a starting rate if this is your first gig.

>> Which geo area? In the SF area, that's probably true.

wlh99
Sep 4, 2009, 02:23 PM
Where are you looking that embedded/mobile developers are making 45 an hour? We charge $110/hr and we have lots of work at that rate. Also 20 an hour is WAY too low. 45 an hour is a starting rate if this is your first gig.

It really depends on where you are at and your skill level. $20/$45 could be right in a lot of areas of the country.

But also your skill. It sounds like you are just learning the SDK. Are you highly skilled in other programming languages, and is the project for a speciallized business other programmers won't know?

If you are a beginner and looking for someone to fund your learning, then $20 may be spot on-and great for you.

I don't program for money, just fun. But in my technical field I get $1200/ month to do nothing, then $150 hour once I get called by my client. They are more than thrilled to pay me that because they know it would be much more expensive if I didn't do the work.

That's what really sets the rate. How much will the project cost to complete, and will the return on investment justify that cost? For a project that won't increase revenue by very much, you won't command a high price. If it will generate millions of dollars for your client, your rates go up appropriately.