<rant>
It comes down to one simple thing:
You cannot know how much a project is worth to a client. If they're
willing to pay you $5000, it's worth $5000, wether you think it's worth
$500 or $50000. If I buy a pack of basketball cards for $2 that has
ten cards in it, then they're worth 20c each. If suddenly some
collecter says "ohmigod you have a jordan rookie card in there, i'll
give you $3000", it's now worth $3000, because that's what
he is willing to part with to own it.
In short, any skill, service, or product, is "worth" the amount of money
you can exchange it for" this is how the stock market works
(sometimes), it's how just about everything works. If they're willing
to pay it, you should charge it. They can go somewhere else, noone
is holding a gun to their heads.
Everything is a game. You want the most money possible for it, they
want it for the least amount of money, you compromise on something
you can both live with, or you don't do business, and next job, you
have to start over.
Some people won't look at you if you charge less than $150/hr, some
people won't look at you if you chargre more than 40.... it's just the
way it is.
</rant>
Gfunk - http://www.gfunk007.com/
I sense much beer in you. Beer leads to intoxication, intoxication to
hangovers, and hangovers to... suffering.
----- Original Message -----
From: "Steve Werby" <[EMAIL PROTECTED]>
To: "Shane McBride" <[EMAIL PROTECTED]>; <[EMAIL PROTECTED]>
Sent: Friday, February 02, 2001 3:20 PM
Subject: Re: [PHP] Pricing for PHP programming???
> "Shane McBride" <[EMAIL PROTECTED]> wrote:
> > I was wondering what other PHP people charge to write PHP?
>
> There's no magic answer. And no offense, but if you categorize building
> business solutions delivered via the internet as "writing PHP" then your
> services probably shouldn't be priced at the higher end of the spectrum.
> There are so many factors - size of project, complexity, reusability of
> project components, turnaround time, your reputation, your speed,
geography,
> etc. And there are many ways to price a project. We use a combination of
> flat rate pricing, estimates with a cap, hourly rates, retainer
arrangements
> and some more creative terms depending on another long list of factors.
>
> As a PHP programmer and COO of a development and consulting shop, the
> emphasis on hourly rate is something that really amazes me. Not all
> programmers are created equal. A lot of clients don't recognize that.
Some
> mistakenly believe that a $120/hr. programmer is 20% more productive than
a
> $100/hr. programmer. Yet others think that a $200/hr. programmer must be
> twice as good as a $100/hr. programmer. I find that there is *no*
> correlation between hourly rate and the quality, productivity and value of
a
> programmer. Sure, in other non_knowledge_based occupations, there may be
a
> correlation, but in our biz I don't see one. Some say "you get what you
pay
> for", but b/c this industry is new there are a lot of unscrupulous
> developers out there talking with naive uneducated clients. This is a
> dangerous mix. We've talked to a number of prospective clients who were
> charged $100,000+ for projects we could have done for $5,000. I couldn't
> sleep at night if we gouged clients like that and in the long run I think
> gouging clients will come back to bite you. We try to emphasize the total
> cost to the client along with the benefits of our proposed solutions. We
> try to state these benefits in terms of time savings, exposure,
value-added
> capabilities, revenue and process improvement. When you can put what you
> can bring to the table in these terms the hourly rate becomes less
critical
> and it makes it easier to compete with inferior competitors that compete
on
> price alone.
>
> So, in general what should you charge based on your skills, experience and
> the types of things you are building? At a mimimum you should charge
enough
> to cover the cost of your operation taking into account the risk of not
> staying fully utlized and adding on enough to make an acceptable amount of
> profit. If after arriving at that number it seems that your target market
> can't support that rate, reassess your strategy. As a rule of thumb, a
> consulting biz needs to charge 2.5 - 3 times the hourly rate payed to its
> employees. If you're a one person operation, you might think you need to
> charge less, but I wouldn't look at it that way. Unless you have clients
> breaking your door down and your clients aren't aware that there *are*
> others like you, you'll probably have to spend a significant amount of
> non-billable time dealing with running the business, doing marketing,
sales
> and other business functions. And if you're alternative is working as an
> employee of another company and earning a steady paycheck (unless you just
> don't want to work for anyone else) you should plan on at least making
> enough to earn more than this alternative.
>
> If I was trying to gauge my value I would probably start low, build up
word
> of mouth, client referrals and long term relationships and then increase
my
> rates gradually over time if the market allows you to do so. In my area a
> green PHP programmer working part time might be able do contract work for
> $15 an hour while a seasoned guru might be able to command $150 an hour.
> Over time your programming skills, productivity and business knowledge
> should continuously increase. As a result your margins should increase,
> even if your so called "hourly rate" remains flat. Unless of course you
> hire other people. That may make your operation much more complex and
> difficult to manage than you may think. Plus, any development firm that
> hires a PHP programmer is reducing the pool of PHP programmers available
to
> my company and I just can't have that. <grin>
>
> --
> Steve Werby
> COO
> 24-7 Computer Services, LLC
> Tel: 804.817.2470
> http://www.247computing.com/
>
>
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