Found in 4 comments on Hacker News
mooreds · 2021-06-24 · Original thread
gk1 · 2018-01-30 · Original thread
If you are charging by the hour then you've already lost. Contracting/consulting, like any business, is about exchanging value. You want to be fairly compensated for the value you're providing to a client.

> Start with the minimum wage you would like to take out of the business. How much do you want to earn a year? Remember, this is the minimum figure you could survive on. We will increase that number later.

Your lifestyle or annual expenses have little to do with the value you're providing, so why in the world would you peg your rates (and cap your income) based on it? If you ever move from SF to Idaho are you going to halve your rates just because your living expenses did?

And why limit yourself to $240k/year (what the current top thread is suggesting)? That's not even a crazy number and already you're forced to defend the $240/hr rate. Is that an argument you want to have every time you pitch a project?

I highly recommend reading the book Value Based Fees by Alan Weiss.[1]


nazka · 2013-07-25 · Original thread
Hourly rates undervalue consultants. It is a simple price based on quantity that we place on the front of customers, and have nothing to do with value, even more with relationship.

There is an awesome book about that. [1] It tells you how to set the right price and the right relationship with a customer. The philosophy is: firstly to show them the value you will provide, secondly to be able to set the right price, and thirdly the fusion of both with the contract. At the end, it is not a question to set an hourly rate and count the hours; it's about how much value you can give them, and set the right price. Then consultants build a contract with rules that reflect that (and protect them).

You have a lot of explanation inside with different chapters. It is a must read for me; even just the chapters that explain each ways to set price are a gem. You can easily adapt it to any business.

It is also similar to an post on HN some weeks ago. [2]



tnorthcutt · 2011-05-09 · Original thread
Do you know of any good resources for getting started with value billing, especially for web design/development? We mainly build websites for small/medium sized businesses, and I anticipate needing to do a lot of education/selling on a possibly unfamiliar pricing system. I'm aware of this book aimed at consultants: but I'm not sure how well that will apply to my situation.

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