I wish I was given this advice last year when I got a part time job working for an app development company making “apps”.
I knew beforehand the project wasn’t interesting as it involved making very low quality apps, but I thought to myself “hey, at least I’ll make a few extra bucks, and I’ll charge by the hour!“.
Back then, I had no clue how much to charge to this company, so I thought best way to charge for the work, was to take my day-job’s monthly salary, calculate my hourly rate ( 5 days per week, 8 hours per day), and then use that as a base to charge this company.
Fast forward 6 months later, I ended up hating the day I decided to do contract work for this company, so I quit and left a lot of work unbilled.
From the advice given by Will Terry I can see I made the following mistakes:
I shouldn’t have taken a job that wasn’t interesting, unless the pay was really (extremely) good to justify working on it. The less interesting the job, the more money I should’ve charged.
Billing by the hour was an illusion. I initially thought that I would be able to charge the same amount of money I was making at my day-job, but if you think about it, you are never working 100% all the time (we always have improductive meetings, distractions, lunch, breaks, etc). That means, that my effective hourly rate at my day-job was significatively higher than what I calculated. In order to earn the same amount of money from my day-job, considering an average of 50% effective work time, it means I should’ve charged at least twice the rate I gave them.
Will is correct, different things have different values depending on the circumstances, and even more when dealing with creative work like coding or designing, so charging a flat fee without taking in consideration soft factors like interest, fun and experience makes no sense. So from that perspective, Will’s chart above is very useful at the time of making the decision of whether to take a job or not, and how much to charge for it
Here is Will Terry’s video: