How much to charge?
by Drew -Gaiiden- Sikora · 12/14/2007 (1:03 am) · 7 comments
Thurs, Dec 13
Had a meeting tonight with a fellow I met at the holiday party on Tuesday (see previous entry). He has a client who wants to take an existing board game and convert it to a PC game (the client created the board game) using Torque to get it on multiple platforms. He actually asked me at the party if I used Torque and when I told him I've been toying with TGB since its inception he was very pleased. So we had a pleasant conversation over dinner tonight about the game and all it entails. This seems a better chance then the last two contract works that floated past me at least.
So the question now is how much money to charge for programming. I've never done contract work before so I'm not sure what to offer. A friend of mine said recently that contractors got paid $50-$200/hr. I was thinking of around $35-$50/hr but apparently they want to budget out the entire 6-8mo dev cycle. This triggered warning bells in my head, because I know that if I set $50/hr for a certain amount of hours in those months to calculate my total cost, I'm going to be losing money because I sure as hell won't be working the same amount of hours towards the end of the project than at the start. So I'm prob going to bump it up to $75/hr to pad the coffers to allow for the inevitable overtime (which still hopefully doesn't come).
Anyways those are just numbers. I could say $35/hr contract or $50/hr for a budget. Or $75/hr contract and $100/hr budget. But those last figures seem unreasonable given my background. I'm still thinking of shooting for between $35-$75 though.
What do you guys think?
Had a meeting tonight with a fellow I met at the holiday party on Tuesday (see previous entry). He has a client who wants to take an existing board game and convert it to a PC game (the client created the board game) using Torque to get it on multiple platforms. He actually asked me at the party if I used Torque and when I told him I've been toying with TGB since its inception he was very pleased. So we had a pleasant conversation over dinner tonight about the game and all it entails. This seems a better chance then the last two contract works that floated past me at least.
So the question now is how much money to charge for programming. I've never done contract work before so I'm not sure what to offer. A friend of mine said recently that contractors got paid $50-$200/hr. I was thinking of around $35-$50/hr but apparently they want to budget out the entire 6-8mo dev cycle. This triggered warning bells in my head, because I know that if I set $50/hr for a certain amount of hours in those months to calculate my total cost, I'm going to be losing money because I sure as hell won't be working the same amount of hours towards the end of the project than at the start. So I'm prob going to bump it up to $75/hr to pad the coffers to allow for the inevitable overtime (which still hopefully doesn't come).
Anyways those are just numbers. I could say $35/hr contract or $50/hr for a budget. Or $75/hr contract and $100/hr budget. But those last figures seem unreasonable given my background. I'm still thinking of shooting for between $35-$75 though.
What do you guys think?
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#2
So for example, offer them say 6 months of your time for some ammount of money, $32500.00 for example. This is half the yearly salary of the average senior software engineer give or take. Arrange the contract so that you get paid on a monthly basis dividing the 32.5K by 6 to give you 5416.67 / month. In the contract, state the reviewable milestones that should be delivered each month. This give you and the customer the opportunity to review your progress month to month. Demand a one month retainer up front to begin and give them the last month free. Make sure you have an option in the contract to renew it.
Other than that, your 35 to 75 seems right on, but 75 is aiming pretty high.
When I was consulting I worked this way. With some customers, I charged 62.50 / hour and they were willing to pay it. With other customers I charged $500 / day flat rate where the length of the day could extend beyond 8 hours. This was my incentive to work accurately, hard, and fast.
Good luck!
RB
12/14/2007 (3:23 am)
I think charging an hourly rate for a job where you don't know the exact timeframe in which you can finish it is risky for both you and your customer. You might want to consider a contract where you charge them one lump fee based on the number of months you expect to work on it. But I suggest getting a chunky retainer just in case you do a lot of work and the project gets scrapped from the customer's side.So for example, offer them say 6 months of your time for some ammount of money, $32500.00 for example. This is half the yearly salary of the average senior software engineer give or take. Arrange the contract so that you get paid on a monthly basis dividing the 32.5K by 6 to give you 5416.67 / month. In the contract, state the reviewable milestones that should be delivered each month. This give you and the customer the opportunity to review your progress month to month. Demand a one month retainer up front to begin and give them the last month free. Make sure you have an option in the contract to renew it.
Other than that, your 35 to 75 seems right on, but 75 is aiming pretty high.
When I was consulting I worked this way. With some customers, I charged 62.50 / hour and they were willing to pay it. With other customers I charged $500 / day flat rate where the length of the day could extend beyond 8 hours. This was my incentive to work accurately, hard, and fast.
Good luck!
RB
#3
The other question you have to ask on how much you are willing to work for is what does the project mean for your career as a game dev. Certainly it means compensation, but each project should be a stepping stone too, and that will usually have an ultimate monetary value in and of itself. I know I've taken jobs paid in food stamps just for the opportunity.
12/14/2007 (4:58 am)
Real pro's in the IT business bill out by the day, not the hour. Although the definition of the day should be considered and written as 8 hours. Understand though that billing by the day will rarely mean only 8hours regardless of how it's written. Also, the bean counters will want a regular and detailed status report to justify that you are indeed doing your time.The other question you have to ask on how much you are willing to work for is what does the project mean for your career as a game dev. Certainly it means compensation, but each project should be a stepping stone too, and that will usually have an ultimate monetary value in and of itself. I know I've taken jobs paid in food stamps just for the opportunity.
#4
Lump sum is when you simply say I you give me $X and I'll give you a product. This approach has the advantage of you being able to work how you want, when you want and if you get it done early, it's all profit. The disadvantage is that your client can potentially drag it out for a long time beyond what you think the job was worth. (Usually in the last 5% of getting the project finished...) This can be prevented by creating a very specific scope of services prioir to agreeing to do the work.
Time and materials is when you provide an estimate of the number of hours and a billing rate to complete the project. This has the advantage of having a very structured approach and if you need more hours to complete the job, both you and the client know what it will cost up front. The disadvantage here is that it relies very heavily on your ability to forecast hourly requirements to complete the job correctly.
Just some food for thought. PM me if you want to discuss any issues/concerns/tools/tricks. I do this type of thing regularly and may have some insight.
Best,
Patrick
12/14/2007 (6:54 am)
In the aviation/planning.engineering industry we propose/bill jobs in one of two ways, either as a "lump sum" or "time and materials".Lump sum is when you simply say I you give me $X and I'll give you a product. This approach has the advantage of you being able to work how you want, when you want and if you get it done early, it's all profit. The disadvantage is that your client can potentially drag it out for a long time beyond what you think the job was worth. (Usually in the last 5% of getting the project finished...) This can be prevented by creating a very specific scope of services prioir to agreeing to do the work.
Time and materials is when you provide an estimate of the number of hours and a billing rate to complete the project. This has the advantage of having a very structured approach and if you need more hours to complete the job, both you and the client know what it will cost up front. The disadvantage here is that it relies very heavily on your ability to forecast hourly requirements to complete the job correctly.
Just some food for thought. PM me if you want to discuss any issues/concerns/tools/tricks. I do this type of thing regularly and may have some insight.
Best,
Patrick
#5
12/14/2007 (9:41 am)
Thx for all the advice guys! I will def take it to heart. Keep ya posted
#6
Good luck, I have been self employed for 9 years now, and I dont think I could go back to working for someone else. Though at times when I have an awkward client........
Oh yes, always state your payment terms clearly. Never feel guilty about chasing up payment.
12/14/2007 (11:48 am)
Well, the best way to work out how much you want is to figure out how much you want your yearly salary to be, then divide it by the number of work hours in a year. Then bump it up by a third, as a contractor you will probably not have work every week of the year, and depending on trade can expect about one third of your year to be idle. Vary to suit, and you have how much you should be charging per hour/day.Good luck, I have been self employed for 9 years now, and I dont think I could go back to working for someone else. Though at times when I have an awkward client........
Oh yes, always state your payment terms clearly. Never feel guilty about chasing up payment.
#7
12/15/2007 (6:06 am)
the advice I consistantly see for things in the industry is.. don't sell yourself short. As a pro photographer, I am always asked to provide quotes for jobs... I tend to err on the + side of caution and in general have about a 60% acceptance rate - that's just fine for me. For most of those jobs, the extra $$ I charged was spent on the project - money I woudl certainly have lost if I didnt' charge for it. Sounds like a great gig... Good luck!
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