My method goes counter to the article but still ends up with the same result - higher rates with the added advantage that I KNOW it is the highest possible rate I can charge and not worry if I should charge more or less.
Here's my simple method: Decide how many hours you want to work each week. Then find double or even triple work than that. Then raise your rates till clients start to drop off until you have your desired weekly hours of work.
If you feel your rate for a client is too high, you can always give free or discount hours every once in a while, especially when they are in crisis mode. If you want to drop a client, let them you know you are raising your rates in near future. If they agree to it, great, now you get a bonus for working with bad-client. If they can't afford your new rate, great, you just fired a client without burning down a bridge or having awkward conversation.
Your hourly rate is literally the only thing you are getting from the entire contract. They have projects, deadlines, specs, SDLC, deliverables, development methodologies, use cases, and a hundred other things they want. You have an hourly rate. No year-end bonus, no promotion, no office space, no profit sharing, no health plan, no 401k contributions, no office cooler gossip, and certainly no annual raises.
Of course, having been on the client side of this equation too, I know how wonderful it is to pay someone a single fixed hourly rate and not have to worry about a hundred minor things because I can trust them to be on top of it without my involvement.
Here's my simple method: Decide how many hours you want to work each week. Then find double or even triple work than that. Then raise your rates till clients start to drop off until you have your desired weekly hours of work.
If you feel your rate for a client is too high, you can always give free or discount hours every once in a while, especially when they are in crisis mode. If you want to drop a client, let them you know you are raising your rates in near future. If they agree to it, great, now you get a bonus for working with bad-client. If they can't afford your new rate, great, you just fired a client without burning down a bridge or having awkward conversation.
Your hourly rate is literally the only thing you are getting from the entire contract. They have projects, deadlines, specs, SDLC, deliverables, development methodologies, use cases, and a hundred other things they want. You have an hourly rate. No year-end bonus, no promotion, no office space, no profit sharing, no health plan, no 401k contributions, no office cooler gossip, and certainly no annual raises.
Of course, having been on the client side of this equation too, I know how wonderful it is to pay someone a single fixed hourly rate and not have to worry about a hundred minor things because I can trust them to be on top of it without my involvement.