Charge over $200 an Hour ... is it even possible?

okay so you want to charge really high rates i'm talking 200 an hour or more maybe you're trying to get up to the three to four to five hundred dollars an hour range is that even possible it is even though that does seem pretty crazy [Music] so what does that really mean to charge that level well we already know that it's a lot of money that's kind of simple however there is something you have to think about when you want to start charging those rates now i have at the most charged 500 an hour now before you go thinking and that i make 500 an hour let me preface this i have only done that once and here's how long the contract was two hours and this was many years ago i was contracted to solve a very particular problem for a client that was in a lot of pain for a particular problem they had with their app they were getting a bunch of one star reviews i was able to quickly hop in take a look at some of their code run the app see exactly what the problem was instantly kind of did a quick code review and within two hours i was able to determine just through some quick tests how to solve all of their problems and i showed them what they needed to do and then they went off with their developer and fixed all the issues so to them a 500 an hour consulting engagement for two hours was a steal they went from nothing but one star reviews to back up to four to five star reviews from that point forward it was just a simple mistake that the developer had made that he wasn't aware of how to fix uh so i hopped in there and was able to help them now does that mean that i'm charging 500 an hour now no so that's what you have to think about here is is there's a risk versus a long-term benefit that you're going to have when you're building higher rates now the same thing goes for if you're only charging 40 an hour right now and you wanna get to eighty dollars an hour you wanna get 120 dollars an hour there's different ways in which you need to think about this the higher end rates you're going to charge you're gonna find less and less clients the pool of clientele gets smaller and smaller as their pain is going to be much different and the people that are going to pay a lot of money are looking for very specialized talent and for someone who can get in there and complete a project at hand with guarantees and so forth and what you'll find a lot is that a lot of companies that pay these rates will typically contract with agencies and these are very well known consulting agencies that will charge anywhere from 300 to 400 an hour to implement a particular system that helps automate and save the company multi millions of dollars per year now the whole installation maybe even cost a couple million dollars because of those rates yet however their long-term vision is that it's going to save multiples of what the investment it costs to implement said solution the same thing goes for your freelancing and your consulting if you want to charge these exorbitant rates to 3 400 an hour or more you have to realize that your contracts are probably going to be very short the company's not going to want to pay this for a year two years five years long because of how much money it's cost they want that problem solved as soon as possible and they're willing to pay a premium for that if you have a very particular set of knowledge around a specific domain maybe perhaps you're in real estate and you've built something that's very specific to solve a particular pain point you can charge much more based on that because of the value of it however if you're just a general maybe web developer maybe a mobile developer and you're just regular building screens you're not going to be able to charge as much unless you have a particular skill set that a client is looking for and is willing to pay meaning that you can't just say hey my rate is 250 an hour most likely you're not gonna find any clients out there it's just the pool is so small these contracts are going to be very short if you're charging these very very high rates and unless you're working for an agency and you've landed a very big gig they are out there i'm not saying they don't exist yet they're very hard to find so i wouldn't bet on finding them all the time now what does that mean for you does that mean that your cost of living is so much lower that you can have a client every two months for a week at a time and you can live that way if that's the case fantastic i would love that i think everybody would however most people don't live in that world and most people need continual cash flow because we all have bills we have mortgages we have kids we have responsibilities in life and so a lot of time you just need consistent cash flow so one of the things you need to consider is how big is this project going to be and can you continually help this client with other things as well and if you can find other areas of opportunity in which you can help that client so maybe you're going to come in and fix this particular problem but you see there's 10 other things you could help them with you can also sell them on those other services and say hey i can also help you build out your continuous integration server your devops platform i can help you build your cross-platform application or maybe you have experience in android and ios and you can build both maybe you have a lot of experience with python and they have a python backend system that you could also help them with what you could do at this point is offer to lower your rate for an extended contract so instead of maybe a one month gig at a couple hundred dollars an hour you might lower that to 150 an hour maybe 125 an hour if they agree to sign you on to a three to six month contract or longer then at that point what this does is buy you some stability and additional cash flow that's guaranteed through the contract again contracts can be canceled i know but it does buy you that peace of mind that the contract is going to be longer and then at that point in time you can lower your rates it's basically a way of hedging your bets that you're going to have a client long term versus a short-term client that's worth a lot more which one is for you that's something you're going to have to decide a lot of people are very risk-averse meaning that they don't want to have to place a bet on a short and small supply of clients that are only going to be around for a week or less because they're charging absorbent rates if you can live that lifestyle and you can find those clients that's fantastic congratulations you're probably living the dream for most people they're either getting into freelancing or consulting and they want to build a larger pipeline of clients so that they can start living a more autonomous life where they're working remotely they have more time with their family after work they're not commuting and freelancing provides them that ability i mean for me if i'd like to today i could hop on a plane i could go to florida i could work out of the hotel room during my work day get off work and go out in the evenings and afternoon if i wanted to i would still be working full-time for my client my clients don't care where i work from i don't go into the client's office so that's the level of autonomy and freedom that it buys me again depending upon your rates and what you want to do is depend on what your ultimate goals are for how long you want your contract to be so that's the thing you need to take into consideration charge very high rates your contracts are most likely going to be very very short charge rates that are more reasonable then you have more negotiation power to extend the length of that contract over longer periods of time now what you might notice is if you're gonna charge a few hundred dollars an hour maybe your contract might be worth anywhere from three to six thousand dollars just for that short contract maybe ten thousand dollars however what you realize is if there's some way for you to drop your rate down to 125 down to 150 from an exorbitant amount or maybe down to 100 whatever your realm is you might calculate it out and see that this client is actually going to net you a lot more so what does that mean it means the ltv of that client ltv means lifetime value of that client goes up so if you're gonna charge a lot for a short contract that might be let's say five thousand dollars the ltv of that client is five thousand dollars now if you were to drop that rate and be able to sell them on some additional services over a long period of time you might find that the contract goes up from anywhere from fifty thousand to a hundred thousand dollars for that client so if you know if you're charging a hundred to a hundred fifty dollars an hour you can land a three six twelve month gig well just do the math you can find out that the ltv the lifetime value of that client goes through the roof so again depends on which one you want do you want the short term and you don't have to be there that long and don't commit too much or do you want the longer term and perhaps have more revenue again this depends on if you're able to find a lot of these clients they're going to pay a lot of money maybe you just do that for a few months but maybe if you don't want that and you have other commitments and you want more of a stable thing you look for a longer-term contract so again it's up to you what you really want to do i have tried both i usually prefer the longer term contracts as just more stable and doesn't require me to stress out and have a lot of time in my hands to be searching for the next client which is from a very small pool of individuals so final works best for you and if you have any questions feel free to leave them down below in the comments and i'll give you the best help that i can i hope that helps [Music]

Channel: Donn Felker - Freelancing for Software Developers

Views: 283

Keywords: Charge over $200 an Hour, charge more, freelancing rates, freelance rate, charging 200 an hour as a freelancer, hourly freelance rates, paid by the hour freelancing, per hour charge in freelancing, how to charge more, how to charge 200 and hour, charging more than $200 an hour, how to make more money in freelancing, double your freelancing rate, how to increase your freelance rate, charging $100 an hour, $100 an hour, how to make more money, consulting rate, consulting $200

Id: Fn5O1y0SffA

Length: 8min 9sec (489 seconds)

Published: Fri Oct 08 2021