I am getting some opportunities as a freelance developer, and that is good. However, I am new at this and I am not sure how to price my work. I am afraid that if I put high prices that I will push the client away, on the other hand I don't want to be used.

Should it be done by the number of code lines, technologies used, or the complexity of the problem being solved?

Should there be an initial price that I start with and then increase it with a fixed amount for each feature added to the software?

If there is some sort of a universal formula or method to do so please help me with it.


closed as off topic by user718, IDrinkandIKnowThings, animuson, jmort253, yannis Aug 3 '12 at 2:45

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    Yikes! Please don't do code lines. There are some great resources on the web (hopefully someone aggregates here) but it should all be based on the finally hourly income you need after all operating expenses and overhead. – Nicole Aug 2 '12 at 19:39
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    From the FAQ What is off topic here: "What salary/hourly rate should I look for? How much should I charge for X?" This question really falls in there. This might be an ok Question at Onstartups in fact a search using your title finds several seemingly related questions. – IDrinkandIKnowThings Aug 2 '12 at 20:47
  • @Chad. Thanks. I didn't know about that site. – omsharp Aug 2 '12 at 21:28
  • @Chad - I was going to allow it based on the assumption that an answer would be about how to calculate a rate, not how much. – Nicole Aug 3 '12 at 16:48
  • @NickC - Then it is about a specific job function of a freelancer... I personally do not think this question is a good fit here. It seems I am not alone. On Startups has lots of questions addressing this issue already. I would think it best to point people there for this. – IDrinkandIKnowThings Aug 3 '12 at 16:54

If you're freelance then it's really up to you. I wouldn't recommend going the lines-of-code route, it doesn't really correlate well to the amount of build effort or the quality of the final output.

As a freelancer you'll most likely be picking up work on a per-project basis, so my suggestion (and what I do personally) is to negotiate each project on an individual basis and provide each client with at least a couple of options on pricing. The options I provide are fixed-price and billed-hourly. The first option has proven to be much more popular, as in general people seem to prefer having a fixed, known cost rather than hourly charges that might accrue up to who knows what final amount.

Note that with any sort of fixed-price arrangement it's important to have a very clear spec before you provide your quote, and to make it clear that anything that the client adds outside of that spec is a change request and will be billed separately.

There's really no universal approach to setting a price, and what's "fair" is generally considered to be whatever the market will bear. Obviously if you build up a record as an awesome freelance developer you can charge more for the same project than someone who has no prior history to back up their freelancing skills.

My suggestion would be to look at the requirements for a project, and work out how long you think it would take to implement, in person-hours. Then take the smallest hourly rate that you feel does not undervalue your time and multiply it by your estimate, and that'll give you the minimum price that you should accept for the project. You can then negotiate down from a starting price that is higher than your minimum price, and after doing a few like that you'll start to get a feel for how much you can expect to be able to charge for a project of a given scope. Note that this only works if you're good at estimating development effort from requirements, which is a difficult to learn skill in and of itself.

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