How do you charge for your services?

How I agonized over that, and I still don’t know if I have got it right. First up I started searching for tips on how to price myself. All the sites I found were for Americans, and various algorithms were provided. The result was always around 65 Euro. That is a lot, and in Israel I can’t hope to get this.

I managed to get some insight from two Israeli technical writers and was told that the market is bad. One told me that she charges 180 Shekels and people tell her that she is expensive. But I had worked out that I needed more than that as a minimum.

What do you need to take into account?

1.   In all probability that you will not be working 40 (or more) hours a week, thus need to spend time promoting yourself;

2.   All sick leave and holidays are at your expense, and thus need to be factored in;

3.   Your pension fund and loss of work ability now need to be totally paid by you; Not mentioning the ‘keren hishtalmut’ we have here – basically a tax-free savings plan provided by the employer;

4.   Costs – major costs, running costs, accountant, etc., etc. If you are a developer, it will be more because you will probably need professional indemnity insurance.

When you talk to people here, they say your actual cost to the company is 140%, but you need more, because that takes into account full-time work and no running costs. So I made my calculations and reckoned that for my Israeli contracts I’d ask for double the hourly rate I previously earned. They knew my work, I knew the field, and learning was minimal. I don’t know how well that will go down with companies that do not know me, but so far so good and the price has been accepted.

But Europe is another question. As I said, the cost I kept ending up with was 65 Euro. I asked a friend to find out the going rate in the county I was interested in, and got back the same number. I was told that the rate I was charging Israeli companies was a rate for beginners.

So to sweeten the pill I came up with a sliding rate, based on a retainer. I reckoned that the more work guaranteed up-front, the less I need to look for other work, so the price can be lower.

1.   I provided various options with and without a retainer, and with the retainer varying in size (100 or 150 hours).

2.   I also offered that any work above the retainer (if that model was accepted) would be charged at 5 Euros less per hour.

This obviously can only work for a large contract offering continuous work. Project work will need to be charged differently. From my reading I understand that it is better to charge per project than by the hour.

Anyway, my proposal was received graciously, and they are now waiting for a quote from a local person to see if mine is reasonable. So please keep your fingers crossed for me and I’ll update the blog with whatever the outcome is.