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I am an experienced programmer but completely new to the market. Someone wants me to do a project for them, but I do not know how much it is worth. What are general guidelines/advices for finding what a project is worth on the market?

If I can ask here about this particular one, it is a HTML5 site with a login/register form and a video player that has to play a lecture video and powerpoint slides synchronized. They'll give me the video, the audio the powerpoints. I should also do some editting on the video before.

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closed as off topic by gnat, Kilian Foth, Joris Timmermans, Bart van Ingen Schenau, GlenH7 May 23 '13 at 0:06

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Are you experienced? Not only Jimi was wondering. As a novice, just say "I'll do it for 200 bucks". Later you can compute, what you've earned per hour. –  ott-- Sep 21 '12 at 15:42
    
I am very experienced in programming and have been working the last years with what they want me to do; but I have never entered the market because I program for my own clients (players). I can accomplish this really quick but that is because I have the experience. If I charge/hour I will probably be undercharging because I have spent years developing my own tools and skills to do that very fast and it should be a plus, not a punishment. This is why I would like to know the real market value of that kind of project. –  Dokkat Sep 21 '12 at 16:16

3 Answers 3

As a starter freelancer it was really the most challenging thing to do. However, i have adopted some guideline that some-how helped me in estimating my effort.

Here you are some guidelines that i try to stick:

  • Calculate operating cost (like salary, taxes, rent and operation related expenses)
  • Figure out your average billable hours (take into account the holidays, sick days, and vacations)
  • Define your billable rate per hour (operating costs divide by billable hours)
  • Do not forget the profit margin (add profit margin of 10% - 30%, it helps you build a reserve for times when business is slows)
  • Charging by project. This will need a good contract (paper work overhead) laid with detailed requirements and deliverable of the project.
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None of that incorporates the project itself. You can't just bill the same for all projects. Some projects are worth more than others. –  Gratzy Sep 21 '12 at 17:16
    
Well, there is always specific things that need attention, however there should be some general guideline as well. –  Yusubov Sep 21 '12 at 18:09
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Yes I agree, you approach gives you a number you can use as an average bill rate and then you need to adjust up or done depending on project specifics. It also allows you to look at a project and see that it will either bring your annual income up or down from the projection given that the inputs, average billable hours especially are accurate –  Gratzy Sep 21 '12 at 18:33
    
Gratzy, thanks for honest comments ! –  Yusubov Sep 21 '12 at 18:34

I've been on both sides of this transaction and many sales people will ask for the size of the budget for the project. A lot of this depends on the size of the company. They may not have thought about it, but they need to.

Otherwise, figure what you want to charge per hour and hope you can come up with an estimate that is fair to both sides.

Personally, I don't like to charge by the hour. I shouldn't be punished if I can create software that is worth a lot of money to a company, but it only takes me a few hours. Maybe lawyers can get away with outrageous hourly rates, but I doubt you'll find a programmer in the US that charges over $500/hour. Also, even if you show you can do a project in a shorter amount of time than a competitor that has a cheaper hourly-rate, the client will use this information try to get you to accept a lower rate (Obviously they won't ask you to take longer.).

Be fair to yourself and your profession. We don't need more bottom-feeders.

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Your basic choices are fixed bid vs hourly.

If you choose fixed bid be very thorough with requirements and specify exactly what will be delivered and payment schedule based on deliverables.

If you are inexperienced in contracting I would suggest hourly. It doesn't sound like a very big project so why don't you come up with a rate based on what your salary is, I'm assuming you are also working full time, and use that as a starting point.

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No, I have never worked for someone before, I live from money I make with personal projects. They want this specific project and are expecting to tell me the price soon. –  Dokkat Sep 21 '12 at 15:40
    
Well if you live from money you make with personal projects you should have something to base this on. –  Gratzy Sep 21 '12 at 15:41

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