1 2 Previous Next 18 Replies Latest reply on Oct 25, 2016 5:03 AM by beverly

    How much to charge?

    Storganise

      Hi All,

       

      Does Filemaker publish recommended rates for developers to charge? I've been happily charging what I think is a fair rate for the last couple of years, but some of the big companies charge an hour almost as much as I do per day! Naturally as a small enterprise my infrastructure is less complex, but I'd be keen to know if I am missing some important guidelines.

       

      Thanks

       

      James

        • 1. Re: How much to charge?
          ch0c0halic

          No FileMaker does not have a suggested rate or even a recommendation for what any developer should, would, or might charge.

          FMI does not have guidelines, recommendations, suggestions, or anything about how a developer charges for their services.

           

          That would be "Price Fixing" and it is illegal.

          • 2. Re: How much to charge?
            monkeybreadsoftware

            Well, in the UK you must take at least 100 pounds/hour, so you can make a living from this.

            Just to effectively get the same as an employed developer with 20 pounds/hour after tax.

             

            But huge companies have overhead which needs to be paid. So every consultant has to bring money home to also pay accountant, manager, technician and secretaries.

            • 3. Re: How much to charge?
              mike_wallace_rcc

              There are a LOT of factors that go into charging your customers different rates.  One of the major benefits that a large company brings to the table that a smaller one does not is the collaborative effort that can be achieved to solve problems.  There are times that I have not worked with a specific integration or something like that, but I know that one or two others in my company have.  I can get the coaching I need to get up to speed very quickly if there is information that I am missing.  Another benefit of a larger organization is that if something happens to the developer then there are people who can step up in the middle of a project and complete the project.  This may not even be the fact that an engineer was "hit by a bus" but rather load balancing of the customer's projects can be done to shift an "easier" project to a less technical engineer while shifting projects that require higher competency to someone who has more/more varied experience.  The last point on the differences between lower costs and higher costs is that many times a major skill is missing that moves someone from being a FileMaker developer to being a FileMaker consultant.  That skill is the business experience and acumen to be able to get into a business and quickly assess the pain points and bad processes for which FileMaker may, or may not, be the appropriate solution.

               

              With all of that being said, this is a free economy and you are free to charge whatever you feel is a fair price for your time.  My boss frowns on me charging less than our full rate (as a rule) due to the fact that my time is in constant demand and he and I both know that there is a line of people who do want to pay for my time.

               

              If I have a customer that seems like they are unsure about me being worth the hourly rate that we charge, I usually ask them to break off something like 5-10 hours of work and let me do that.  If they are happy with the value that I provided for the money that they spent then they can continue if not then they can feel free to find another developer that fits their needs better.   To date, I have not ever had anyone with whom I have done that, who did not stay and become a regular customer of mine.

               

              If your skill, experience, etc. warrants a higher rate then you should have no issue charging that higher rate.  But be careful because FileMaker is notorious for giving a false sense of skill to developers because very quickly people can get in and know how to do many, many things.  I know the value of my time, because not only do I know how to do something in FileMaker, but I know multiple, multiple ways of doing it and why different approaches are better in different scenarios.  You and your customers both will find that equilibrium of value vs cost as you charge what is fair for the level of skill that you have.

               

              Edit: Adding part of an article from the Smithsonian.com called: Charles Proteus Steinmetz, the Wizard of Schenectady

              Ford, whose electrical engineers couldn’t solve some problems they were having with a gigantic generator, called Steinmetz in to the plant. Upon arriving, Steinmetz rejected all assistance and asked only for a notebook, pencil and cot. According to Scott, Steinmetz listened to the generator and scribbled computations on the notepad for two straight days and nights. On the second night, he asked for a ladder, climbed up the generator and made a chalk mark on its side. Then he told Ford’s skeptical engineers to remove a plate at the mark and replace sixteen windings from the field coil. They did, and the generator performed to perfection.

              Henry Ford was thrilled until he got an invoice from General Electric in the amount of $10,000. Ford acknowledged Steinmetz’s success but balked at the figure. He asked for an itemized bill.

              Steinmetz, Scott wrote, responded personally to Ford’s request with the following:

              Making chalk mark on generator    $1.

              Knowing where to make mark         $9,999.

              Ford paid the bill.


              Read more: http://www.smithsonianmag.com/history/charles-proteus-steinmetz-the-wizard-of-schenectady-51912022/#g5HdPDjDGytBjW4F.99
              Give the gift of Smithsonian magazine for only $12! http://bit.ly/1cGUiGv
              Follow us: @SmithsonianMag on Twitter

              • 4. Re: How much to charge?
                coherentkris

                So you are no longer happily charging your customers what you think is a fair rate?

                Sounds like you have some soul searching to do.

                Don't compare your rates/business with those of others unless you bring the same value to the customer.

                1 of 1 people found this helpful
                • 5. Re: How much to charge?
                  beverly

                  But huge companies have overhead which needs to be paid. So every consultant has to bring money home to also pay accountant, manager, technician and secretaries.

                   

                  Small companies have the same overhead. However the one-two person shop do all the work a non-developer might. If I am not developing, I don't make $$ for answering the phone, for example, or balancing the accounts. My time away from billable developing is a cost!

                   

                  beverly

                  3 of 3 people found this helpful
                  • 6. Re: How much to charge?
                    Storganise

                    Thanks for such an informative and entertaining reply. I respect the notion that Filemaker makes us think we are experts quite quickly. This gets more obvious to me the further down the line I get.

                    • 7. Re: How much to charge?
                      Storganise

                      Kris, you are right of course. But it is more to get a balance. As Beverly says, it's not just development time we need to charge for and I'' increasingly soending up to a day a week dealing with un-chargeable tasks. I don't want to fleece my customer, but I also don't want to be fleeced by them for a service that will save their company many many times my fee.

                      • 8. Re: How much to charge?
                        Storganise

                        Thanks Beverly. Very nicely put.

                        • 9. Re: How much to charge?
                          nicolai

                          I live work in UK as well, and the general culture does not allow asking how much money you make. But this is a small community and I found that just being honest and talking to people does help. Most of the developers operate as small business and do not mind disclosing their fees. The best way to find out about rates is just to get someone to the pub and have a chat.

                           

                          I am a bit better off as I used to work for a few large FileMaker development companies and know their rates. I obviously can not charge anywhere near that amount myself, but I m aiming at a different market - smaller and budget conscious clients.

                          • 10. Re: How much to charge?
                            keywords

                            Some interesting discussion so far. The main point I'd add is that you need to understand your own level of skill and set your charges according to that. I know that there are developers who charge way more than me, but they would also no doubt accomplish what I do in considerably less time because of their much greater depth of FM knowledge and skill. I charge what I think is a fair rate for what I offer. I also don't charge, or charge a lower rate, for time spent on my own education—if a client wants me to do something I've not tackled before and I have to learn how to do it before actually doing it.

                            I enjoyed the Henry Ford story. Reminds me of the motor mechanic who complained to his heart surgeon that he got paid way more than the mechanic did. "We both deal with engines that have pumps and valves and pipes, and mix air and fuel." The surgeon replied, "That's true, but have you ever tried to service those things with the engine still running?"

                            • 11. Re: How much to charge?
                              CarlSchwarz

                              A very rough calculation for what you want to earn is to double the hourly rate that you would get as an employee (e.g. before tax).

                              Consider in your calculation all the regular employee things, e.g. sick pay, holidays, superannuation, equipment/software licensing, 80% utilisation time (~20% overhead doing other things), long service leave accrual.  It will likely work out that what you charge the customer will be double what you will end up earning yourself.

                              The balance is worse if you are renting an office or have other overheads.

                              • 12. Re: How much to charge?
                                twelvetens

                                Remember also that you're not bound to bill by the hour. Recently I've been analysing the implications of moving to a Value-Based pricing model, but I admit I'm not quite there yet.

                                 

                                Have a look at this:

                                Value-Based Billing with Kirk Bowman: FileMaker Talk #31

                                • 13. Re: How much to charge?
                                  fmpdude

                                  If you don't charge competitive rates, or even give some services away (never do that!), that's what clients will think your services are worth. Development and support are not commodity spaces.

                                   

                                  IMHO, assuming you "deluxe" the client with great programming and support, charge deluxe rates.

                                   

                                  Again, IMHO, clients who are "rushing to the bottom" for the lowest possible rates on everything aren't worth working with as they often don't value quality or effort (just low price).

                                   

                                  My two cents.

                                   

                                  HOPE THIS HELPS.

                                  • 14. Re: How much to charge?
                                    beverly

                                    Yes. And you still may need to approximate the hours needed. Factor in down time for all the admin, too. It likely is close to hourly.

                                     

                                    But in any case, the client must know the tasks are what you base the "value" upon. Any changes will add more value and more costs.

                                     

                                    Sent from miPhone

                                    1 2 Previous Next