[Unosolo]

I regularly see developers going out of business because they are not charging enough. I have been doing software consulting for the past six years and I charge higher rate than anyone else I met in the niche.

The ex-contractors I had a chance to talk to don't describe becoming a permanent employee as "going out of contracting business". The reasons they usually cite for ceasing consulting: - anxiety about not being able to get a next contract - additional paperwork, unpaid administrative overhead - dwindling of contract work stream - unpaid travel

They tend to underestimate the volatility and added overhead of contract work compared to permanent positions and they do not charge enough to cover the risks and extra expense. A lot of the newly born contractors stay in the business as long as the initial client keeps extending them and fail to build a business.

The nature of their business is opportunistic and the business dies once the first serious obstacle is met. In my opinion they fail to realise the importance of negotiating a thicker margin that serves as a tool and motivation to overcome many hurdles that are otherwise smoothed by employer. A thicker margin provides business continuity and a long-term win for the customers.

I can see clear parallels with selling apps. Sexy apps might be given away for free, as there are plenty of competing developers some of whom are attracted by vanity. However, charging more means getting higher quality customers who self-select based criteria you set and advertise and will help build a more stable, healthy business.