[leknarf]

Great article overall. I particularly liked the three mistakes you pointed out:

I nickled-and-dimed a client on change requests, alienating that client and making myself appear less professional. ... I would have been better served by her loving me than making a little more money.

I completely agree. In fact, this is part of the reason new freelancers often regret setting their hourly rate too low. It's important that you set a high enough rate that you can throw in unbillable work now and then without destroying your earnings. The best freelancers consistently under-promise and over-deliver.

For pricing my services, I need to start high and work my way down. I generally start client conversations on my hourly rate at what I would consider a reasonable ultimate number, and then allow myself to be driven down from there — generally because the client wants a long-term contract and expects to save on my hourly based on the length of the engagement.

Constant haggling will make every new project a frustrating experience. I usually recommend setting a fair rate and then holding the line when clients ask for a discount. That's tough to do with your first few projects, but becomes easier once you're more confident about your rate and abilities.

More projects, less hourly. When starting as a consultant, I was really selling only my hours. Now Symonds & Son is a business in its own right, and I’ve hired designers and developers to help with my workload. Working with other talented individuals makes much more sense on a project basis, where I can package their (and my) hours together.

This depends on what type of projects you're looking to take on. Landing pages and presentation work will probably pay more if you charge per project (since clients won't believe you can more 10x faster than cheaper devs), but building new product features for startups is probably better at an hourly rate (since startup clients always change what they're looking to build).

If anyone is looking to get started as a freelancer/consultant or just looking to expand their existing business, take a look at our startup: http://getlambda.com.

[dworin]

Great additional advice, two other thoughts building on it:

1) Make sure the client knows that you're doing work that's out of scope, but that you're not charging for. Otherwise they just think it's part of the package, and will expect it next time. I've seen consultants get upset that clients didn't appreciate all the extra work they were doing, when the clients didn't even know it was extra.

2) Stay firm on your rates, but offer discounts to clients for things that cost them nothing and help your business. Knock 10% off if they pay up front: it gives you cash in hand, saves you from having to follow up with accounts payable, and makes it harder for them to cancel the project. Offer a discount as part of a retainer or an ongoing support contract. Show them where there are opportunities for someone on their team to do the work, rather than engaging you. If you show them that you're a partner in helping them reduce costs, they'll value your services more.

[elemeno]

Your second point is also a good way to deal with late payment penalties - something which it can be hard to add to a contract (as in, $x if you pay within 30 days $x + 10% if you're late).

Selling it as a discount for paying early is generally going to be easier to get a client to agree to - who doesn't like a discount? So it's $y normally, but $y - 10% if you pay within 30 days.

It's no effect on your bottom line, but it does make for happier clients!

[rmc]

For the record, some regions have "late payment" (with interest & charge) laws. Notably the European Union. http://ec.europa.eu/enterprise/policies/single-market-goods/...

I agree with your general point that an early-discount, as opposed to a late-fee, is an easier sell.

[leknarf]

The US also has usury laws, which I found fairly surprisingly when I was just starting out. I previously thought usury was a strictly a historic crime, like adultery or eating bacon on the sabbath. But some people are very much offended by the idea of lenders charging too high an interest rate.

They actually become relevant for late fees, since you usually do want your fee to be punitive enough to encourage timely payments. The usual practice is set your fee to 1.5% per month or the highest percent allowed by law (i.e. just below usury if that's applicable in your state).

[fizx]

IANAL, so ask one first if that's your thing, but what I've done is offer 20% off if paid within 15 days. Set your billing rate higher to compensate.

[rmc]

Usury is a different thing to do with charging high interest rates on loans. Many places have limits. This is default late payment fees.

[mgkimsal]

> I completely agree. In fact, this is part of the reason new freelancers often regret setting their hourly rate too low. It's important that you set a high enough rate that you can throw in unbillable work now and then without destroying your earnings. The best freelancers consistently under-promise and over-deliver.

I agree with your agreement, but... it's hard for new clients to understand that you will not nickel and dime them. My rate is rather high for my market, but I do not nickel and dime. But it takes people a while to learn that, no, I don't bill for that 10 minute phone call. No, I don't itemize parking costs when I come to a meeting downtown. No, I don't charge them double time for tackling an emergency on the weekend.

And... some times clients end up going with someone else with a 'cheaper' rate, and I know they end up paying probably just about as much as I'd be charging them with an hourly or daily rate (I have both, but most people still prefer hourly, and I don't turn them down yet because of that).

EDIT: "nickel and diming" on things I outlined above I don't do. Full on changes - "we need 3 new forms" - still get charged for.

[cageface]

I nickled-and-dimed a client on change requests, alienating that client and making myself appear less professional.

One of the many advantages of charging a daily instead of hourly rate is that you avoid this kind of nickel & dime haggling with clients that nobody enjoys. If you batch up change requests into day-sized chunks and you've both agreed on the daily rate then it's a non-issue. It's just important to make sure that you and the client are in sync about the number of days spent.

[emeraldd]

Your company looks interesting, do you limit yourselves to a particular region or are your services open to other areas?

[leknarf]

Most of our clients have been in NYC or the SF Bay area and they usually prefer local developers. Even if someone is working remotely, it's helpful to be able to meet once a week or so.

We're happy to take applications from developers elsewhere, but we might not be able to get back to you for a while.

[ollysb]

Are you working with remote developers or on-site only?