Jason MeloneSr. Project Manger| StreamingEdgeFreehold, Nj, United States
Hey guys,
I was recently contacted by a couple business execs who have an idea for a new online business. They would like me to take their business ideas, flesh them out write up a technical product requirements spec, workflows, a scope matrix/product roadmap, use cases and help mock up some screens. They would then like me to help them find a dev team to build it and help guide development.
I've met with them a couple times now to understand their vision and am at the point that I would like to determine a reasonable hourly rate.
I have 10+ years experience in IT (started as a developer). The work is located in Manhattan. I have a couple day jobs ATM but have never done contract work. Anyone have any good input on a reasonable hourly rate for such work?
And then what if I decide to bill them for the lump project and determine it will take 160 hours? As simple as my hourly above * total hours? Saving Changes...
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Mark ClarkIT Systems Consultant| BB&TRocky Mount, Nc, United States
There are a number of things that drive hourly rates (experience, value-add, specific skills, market value, etc). It is difficult to quantify this without knowing a lot more about your specific market, and more detail about the specific vision and drivers for the project (i.e. time to market, cost, quality expectations, etc). All of these (plus many other) factors can influence the rates you can expect. Generally speaking (emphasis on generally because I don't want you to take this as gospel), in my market (Raleigh, NC Area) a Senior Project Manager with 10 years of experience going straight contract (i.e. no middleman/staffing company) would be looking somewhere on the $65 -$75 p/hr range. Again, these are absolutely general terms based on my personal experience hiring contractors in this area both through staffing agencys and direct. I have seen high demand PMs bring $150 p/hr and have seen junior level PMs bring $40 p/hr, so it really depends.
One thing I noticed about your scenario is that the work you will be (with the exception of standing up and managing the development team) appears to really be mostly that of a BA/BSA not a PM, so this is something to consider. Generally speaking again, BAs in my market bring slightly lower billable rates than a PM, so this should be something to think about too.
One last note, you said you work "a couple day jobs". Does this mean you have other full-time employment (possibly more than one)? If so, I would give serious consideration to taking on a project like this. It appears this is a grassroots effort that will require a substantial amount of time. You know your situation better than I, so do what is best for you. I just know that if I were hiring someone to take my vision and turn it into a reality, I would be very cautious about hiring someone who also had another full time job. Classic case of competing demands, and prioritization. Of course you know the situation better than anyone so it may be a moot point. Just thought I would mention it.
Do some research online about market values, etc. I am sure between the experts here at Gantthead and other supplementary research you will find all you need and more.
Good Luck!!! Saving Changes...
Dr. KoruAssistant Professor| University of Maryland Baltimore CountyBaltimore, Md, United States
If you will be paid hourly in this project, I think it might be useful to explicitly state that in your agreement/contract. Otherwise, it might be considered that you will be also managing the project and responsible for delivering it successfully because you are receiving a lump sum pay.
The latter case is also a type of agreement but it definitely brings more responsibility. Especially if you will be paid at the BA rate, you might end up getting underpaid considering your PM and BA duties and responsibilities together.
In either case, it is important to be very clear up front about the responsibilities and put in ON THE paper.
The moment you decide to do a lump sum for the project, you will have assumed the risk. If the customer does not ask for this type of an engagement, it is not be recommended.
I have a past experience working with startups, similar to what you are describing, and there is a risk that there will be changes when the operations are setup. The difference can be as high as 50 % over the originally estimated efforts.
Saving Changes...
Russell GeakeProject Management Consultant| Deciduous Partners LtdLostwithiel, Cornwall, United Kingdom
I was in a similar position, with a project outside my normal field a few years back - the problem was it was such a new field that no-one really knew what the market rate was.
First off, ask them if they have a figure in mind, you already know what your day jobs pay you. Once you know this, figure out if their rate is based on:
a) best guess
b) best value
c) what they can afford
d) what they think you will take
If you're happy with their offer, all well and good, if not work out your BATNA (best alternative to a negotiated agreement).
After listening very carefully to what the client wanted, and making a huge number of notes I prepared a conceptual menu for them to make their decisions. The scope of work involved everything from overseeing a crew of manual workers (volunteers) and getting my hands dirty, to pure PM activity and preparing strategy. So my options list included a variable hourly (or daily) rate, pre-pay bulk day rates, and chargeable deliverables, so they weren't paying for my time so much as the output e.g. plan, task lists, comms plan etc, resource schedule. I then added an option for ad hoc input.
Clearly if you are billing on deliverables and milestones, then of course, you need to have strict understanding of their expectations (in writing) and quality requirements.
They were impressed that I had considered their position carefully and chose to go for a combination of chargeable deliverables with ad hoc payments at an agreed "average" rate - I was happy to take a bit of a hit on this because at the time I really needed the work...but you sound like you don't need to do this for the money, more for interest and to help them out.
I have assisted a couple of startups, one offered a significant equity stake based on value of input - which is fine if it works out. again, you could offer a blended solution along these lines. Always get it in writing, but understand that some of the prep work will be at your risk anyway such as time spent getting the contract together and agreeing terms (take a look at some contracting agencies T&Cs for clues and ideas)
