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How I went from $100-an-hour programming to $X0,000-a-week consulting

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Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#231

Post by drue »

SwellJoe wrote: post #58
SageRaven wrote: post #24

Damn, that sounds nice. I wonder if system admin/architecture can be modeled that way. I'd love to bill even a modest $2k/week, rather than trawl craigslist, responding to posts for "unix/linux ninjas" then having shops balk at anything over $20 an hour. I don't know how many messes I've cleaned up (likely left by people charging a hell of a lot more than me) for really low rates. I know, I know. Craiglist and other…

It's cheesy, but "build your brand" is relevant to your situation. When a customer comes to you, rather than you going to them, and they've come to you because of something specific and awesome you've done or written, you can set your price and the customer will not balk. Many years ago, I did consulting at $125/hour, but if I was going on-site (particular in another city), I'd bill by the day, at $1000/day (often pu…

It sounds pretty good - but I wonder what you're doing now, given the post is written in the past tense?

Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#232

Post by sequoia »

Sarien wrote: post #208
nandemo wrote: post #172

Earlier quoted context omitted.

> There seem to be a lot of comments centered on “wow, this sounds great – I wish I could charge more” or “how do I find these high paying contracts”? Actually, I'm wondering how can I get gigs that pay $100/hour in Japan.

I can't agree more. 8k as a Rails dev? Converted to USD at current rates I make about 4.9k as a C++ dev. I feel like I am doing something seriously wrong. :/

It all depends on where you live. When I lived in the Southeast US in a non-tech-center people were offering one third of that 96/yr number for an intermediate rails developer (this was considered by the community to be a low offer http://whatyoupayfor.pen.io/ ), so you probably couldn't get a full time gig for that no matter how good you were. Now I live near Boston and that number sounds perfectly reasonable.

Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#233

Post by ksmiley »

baruch wrote: post #230
nfm wrote: post #215

Earlier quoted context omitted.

The problem is that reducing costs doesn't typically scale. If you want to grow a businesses profit significantly, you need to increase sales. It's entirely reasonable to double your sales. It's pretty difficult to halve your costs.

In order to double the profits you need to either double the sales or eliminate all costs . Or do a mix of both. Doubling sales multiple times is more likely than making profits on your infrastructure... Amazon AWS is probably the exception here.

How much you need to reduce costs, in order to double your profit, is dependent upon your current costs and revenue. So you don't necessarily need to eliminate all costs to double profit.

Suppose you purchase widgets from a manufacturer for 100$ and sell them for 101$. In that case, 101$(revenue per widget) - 100$(cost per widget) = 1$(profit per widget). Suppose you then change manufacturers and reduce your cost per widget to 99$. You now make 2$ profit per widget. By reducing costs by 1%, you doubled your profits. Much easier than doubling your sales.

Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#234

Post by dreamdu5t »

Everyone is talking about something different when they say "consulting."

I get the feeling some people are talking about freelance marketing with revenue-sharing, freelance development work, freelance sys admin work, and then business advice.

Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#235

Post by SatvikBeri »

davemel37 wrote: post #185
F_J_H wrote: post #106

There seem to be a lot of comments centered on “wow, this sounds great – I wish I could charge more” or “how do I find these high paying contracts”? Here’s one way. It may seem obvious to many, but I think it bears stating. If you are looking for consulting contracts that pay really well, focus on providing a service that helps companies make money rather than save money. In other words, help grow revenues rather tha…

I humbly disagree with your theory that making money for a company is more valuable than saving them money. As a marketer/rainmaker, I can assure you that I get much further with clients when I can cut their advertising and marketing costs, or cost per acquisition, than when I find them more profitable traffic and revenues. My clients never scream, bring me the rain... They demand, "Bring Me More Rain For Less Money.…

Thanks for sharing. It's interesting to note that within a profit center (marketing), cost cutting is useful.

I think it depends a lot on your audience. If you're selling an IT system to an IT director, you can emphasize the cost savings. But if you're selling the IT system to a CEO you might emphasize how it helps the company's customers and leads to more revenue in the long run.

Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#236

Post by saryant »

Swizec wrote: post #93

Reading this ... man, I'm not even at $100/hour programming yet.

I'm in a similar position. I graduated last May, took a full-time job that has ended up being completely different than what was advertised and I'm about to quit.

During college I worked part-time for a small company doing ASP.NET and I'm close to starting up for them as a freelancer/consultant while I work on some product ideas I have. My hope is that I can leverage my experience with that company into other consulting gigs in the future.

My problem right now is that when I was working for them during college I was getting $20/hour. Before reading Patrick's post I was hoping to get up to $30, now I feel like that's inadequate! Just not sure how to ask them for more.

Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#237

Post by saryant »

ams6110 wrote: post #226
ams6110 wrote: post #182

Earlier quoted context omitted.

Yes.

OK, the point is any of these things could be the case, or not. Some people start consulting immediately. Some don't start until they have been working "regular jobs" for 20 years. Some start young, some start old, etc. There is no one way to start. Just start.

There's only one consistent answer to any questions WRT consulting and that is "it depends."

I've been in your shoes before, trying to figure out exactly what consultants do and how to start doing it. Once I gave up on finding a simple answer and just did it I started to understand the game.

Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#238

Post by daemon13 »

raverbashing wrote: post #207
daemon13 wrote: post #205

Earlier quoted context omitted.

It depends... Although focusing on growing revenue is psychologically more comforting, economically saving on expenses is more beneficial. When you save 1 dollar, your profit increases by 1 dollar. When you sell 1 more dollar, your profit increases by 0.1-0.9 dollars (depending on your margins). To put it differently, if a client is a mature company that is growing 3% annually and which gross margin is 10%, probably…

Yes, but Savings are naturally limited, growth is potentially unlimited Let's say your company sells a product and it costs $10 to make it. You can go and maybe make it cost $9 to make it, but not much less. So you improved their profit by $1 (hopefully) Instead, if you can make it sell 10x more product (which could be feasible), hence having a better effect than savings.

Let me put my finance hat on :-)

>> Savings are naturally limited, growth is potentially unlimited

That's in theory - check annual revenue growth rates of most big companies in mature [developed] markets - if you increase it from 3% to 5% you are hero.

>> Let's say your company sells a product and it costs $10 to make it. You can go and maybe make it cost $9 to make it, but not much less. So you improved their profit by $1 (hopefully)

If you reduce cost or expenses by $1, you improved profit by $1. There is no hopefully, this is how things work.

Also, most of the savings are in operating expenses, not in cost of goods sold.

>> Instead, if you can make it sell 10x more product (which could be feasible), hence having a better effect than savings.

Exactly as I said, it depends on the company. Probably, you are using a start-up as an example, which is another Google, which annual revenue is growing 150% month-on-month and which margins are 70-80%.

I highly doubt how anyone can make it sell 10x more product for a traditional multinational company - FMCG, Farma, Financial Services, etc. Let's be kind of realistic ;-)

Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#239

Post by raverbashing »

daemon13 wrote: post #238
raverbashing wrote: post #207

Earlier quoted context omitted.

Yes, but Savings are naturally limited, growth is potentially unlimited Let's say your company sells a product and it costs $10 to make it. You can go and maybe make it cost $9 to make it, but not much less. So you improved their profit by $1 (hopefully) Instead, if you can make it sell 10x more product (which could be feasible), hence having a better effect than savings.

Let me put my finance hat on :-) >> Savings are naturally limited, growth is potentially unlimited That's in theory - check annual revenue growth rates of most big companies in mature [developed] markets - if you increase it from 3% to 5% you are hero. >> Let's say your company sells a product and it costs $10 to make it. You can go and maybe make it cost $9 to make it, but not much less. So you improved their profit…

Oh sure, sometimes in saturated markets it's easier to increase profits by cutting costs.

"There is no hopefully, this is how things work." Of course.

But with your new unit cost you may want to cut the sales price of the product, expecting to sell more, or something like that. You may also cut your costs and then it backfires. That's where the 'hopefully' part comes from

Re: How I went from $100-an-hour programming to $X0,000-a-week consulting

#240

Post by ahoyhere »

okok wrote: post #217
ahoyhere wrote: post #137

Earlier quoted context omitted.

It's sad that you think "writing stuff people want" is manipulative and faux.

Well writing it for the sake of promoting yourself most definitely is.

"Most definitely"? Why?
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