One of the hardest lessons you’ll learn as an independent contractor is
consultant figuring out your true value in today’s market. There is no
one size fits all answer to that and there are a lot of factors to
consider. Like Eminem said, you only get one shot.

When Moses came down the mountain, I have reason to believe the 11th
commandant was missing: Know Thy Value. Regrettably, this is often the one
part of a consultant’s “total package” that is neglected when putting out
your shingle. When making a deal, you have one chance to get your numbers
right, unless you’ve got a really cool potential client who is going to let
you climb into his or her pocket. Believe you me, mate: that is not where
you want to be.

There is no easy solution to figuring out your value; remember, clients
have their numbers, but you need to develop your rates that you properly
develop a project costing for your clients. Some of the factors your need
to take into consideration when deciding on your rates includes:

Current market conditions: Hey, we’re in 2005, not 1999 so
put down those rates. You’ve got to remember that the tech bubble has burst
and you will almost certainly *not* command the same rate that your mate
did about 5 or 6 years ago. Those days are gone.

It’s also important to consider your geographical location. Obviously, an
independent contractor in NYC is going to command more than someone in
Reno, NV.

Are you experienced?: It never ceases to amaze me when I
see relative newbies in their field demand an hourly rate worthy of a
senior-level technologist. It’s important to put ego aside, recognize your
limitations and that you may have to lower your rate if you’re truly new to
your field and want to develop clientele.

Odds are your clients or recruiters have been long enough to whether or not
your wage demands are commensurate with your experience and technical
capabilities.

Check your six!: What’s your competition charging these
days? It’s important to remain competitive with your colleagues. Being too
high will get you nowhere, and being far cheaper than everyone else won’t
endear you to anyone else either.

Even if you’re not necessarily looking for clients, keep on top of Internet
job boards. Some, such as DICE, are pretty good about posting
client/recruiter rates along with the skill set required. Keep in mind
that some clients are more generous than others, but these numbers will
give you a good idea as to what you can realistically hope to shoot for
without knocking yourself out of the running.

Some societal groups may have an annual salary survey indicating what
contemporaries are asking by market by region. This can be an excellent way
of getting a feel for what’s really out there and help you determine what
you should be charging.

I’ve also had some friends post fictitious jobs corresponding to their
skills sets or jobs they’d like to do and solicit applications. They also
ask for wage requirements. OK, I’m the first to admit that this isn’t the
most ethical approach, but it has proved useful for others in the past.

It’s important to get your hourly rate the first time around. We’ll discuss
in future updates how to do a proper project costing, but for now, let’s
just worry about the rate.

As a friend of mine says, “ask for what you want, get what you need”. Once
you put an hourly number out there, you’ve committed yourself to it for the
duration of the project. Don’t put a low number out there just to get a
project, only to realize that it’s more time and labor intensive that you
had anticipated. By the same token, don’t try to be a Ford Focus and bill
yourself out as an Audi A8.

Some clients will let you re-negotiate or “mulligan” your numbers - be
careful. Not only does this make you look unprofessional, it also indicates
that feel you were wrong in your rate, makes you look desperate to win the
gig and it also shows that you’re willing to cave in and not stick to your
guns.

That’s all for now; we’ll discuss project costing at a later date. What
factors do you consider when deciding at how much to bill out? Have your
say on the forums.