How to charge for freelance work

I have created some apps for myself, and have been approached by somebody to create some apps for him. He has some good ideas, and wants to know how I would like to get paid. He asked if I would like to get paid by the hour, per app, or profit sharing.

I have never done any freelance work. What would be the going rate if I choose hourly, or what would be a reasonable price if I choose to do it by app(of course this would depend on how much is involved). Profit sharing just sounds like a bad idea to me. Since I would be doing this in my free time, I am thinking that charging by app is the best option.

Anybody have any freelance work experience or suggestions?

This is the hardest part of freelancing. If you want to charge per hour estimate to him how much time that would take and charge a little more than you get per hour in your job. If you want to charge per app - you can calculate the same way, estimate how much time it would take, add a week or two for troubleshooting and calculate by hours (or how much programmers in your country get for specialised work like android apps). Keep in mind that you need to give some warranty - fixing bugs might take additional time later. Profit sharing - only if the project is really promising and with some additional up front money, but it’s almost always a bad idea - you also have to trust him that he won’t cheat on the profits. If this is sth si ple though, he is a friend and he will be releasing it for free with ads you might consider putting into code randomly changing of ad code - so for example 50% of time it will show your ads, 50% of time his. The last part makes sense only if he put sth valuable into the app like graphics, marketing - not only idea.

If it would be me, I would charge by the hour. It is the best way to guarantee that you will get paid. If your client ever stops paying, you stop developing. It also protects you against development taking longer than you estimate, as well as feature creep, both of which are very common. You should create a DETAILED technical design document so that you can provide an accurate estimate of the project length.

As for hourly rate, you can search google for ‘how much should I get paid as a contractor’, and you will find two dominant results (for the United States):

  1. Rule of thumb - Your contracting hourly should be equivalent to your full-time salary / 1000. In other words, if you make $100k/yr at a full time job, you should charge approximately $100/hr as a contractor.
  2. Very well thought out formulae for calculating what your hourly should be based on what your full-time salary is. I have used several of these, and the result of the heavier calculations has always been almost exactly the same as the hourly rate as determined by the simple rule of thumb above.

In practice, if you don’t have an established track record and referrals to offer for your work as a contractor, you will have to lower your rates a little. I would suggest being willing to lower your rate by 15-20% when you are first starting out. You will notice that even at the lower rate, your contractor rate is substantially higher than your normal salary rate. This is standard, and any established company knows to expect this. Don’t sell yourself short. :slight_smile:

Also remember that if you do sth cheap the client will expect that you will always be so cheap - what more, he will tell others and they will expect cheap prices from you too.

As someone who is currently hiring a contractor, I have the following comments:

  1. Break it down to component level and do a fixed bid estimate on each component. That way if you screw up time estimations, it is only on a relatively small amount of work.
  2. Expect to pay for scope changes and additional cost items. “It would be cool if…” … well, that costs time… and that means extra!
  3. This is a learning experience for both of you. Treat it as such.
  4. VERY few Android apps make serious money*. Don’t be tempted by the profit sharing
  • Your definition of ‘serious money’ may be different from mine.

In general practice if you make $100k/yr at a full time job, you should charge approximately $100/hr as a contractor.
Break it down to component level and do a fixed bid estimate on each component.I think it will gave some idea about how to do it.I am not a financial adviser but a lay man.

Anybody have any freelance work experience or suggestions?