Charging for Freelance IT software development

[Spider]

A local company (mortgage brokers) have approached me to develop them some proprietary software to interface with their existing applications such as Excel and collate information into a customer database back-end.
I’m currently doing something similar in my current (full-time job) so Im confident I could do it, but I am considering doing this development part-time for a few reasons:

a) Earn some extra cash (how will this affect my existing job in terms of tax etc?)
b) Gain some extra commercial development experience: looks good on the CV!
c) Possibly pursue freelance development as a full-time career and build up a client base to get away from the dull 9-5 life etc etc

However, having never done any explicit paid-for-development before, I am unsure what is a reasonable starting point to negotiate a fee for the project.
Is the norm to devise a set fee for the project or a weekly/hourly/monthly rate in terms of time taken for development? Furthermore, what if the product is delivered and they then want support, maintenance, additional features etc. etc. What sort of pricing model is advisable in such circumstances?

I’ll go and have a chat with one of those high street bank ‘business managers’ when I get a chance and see how it will impact me from a tax/employment point of view and also look into the feasibility of starting something more concrete, but just wanted some advice in the interim from anyone that may have done such a thing or know anyone that does.

Thanks

 

[Haircut]

I would check the terms and conditions of your contract at your job first of all.

Many companies don't allow you to do paid for work while you're employed by them.

 

[NathanE]

I'd think the market for this type of work is quite dry at the moment. Most companies will just find a cheap programmer in India or Pakistan and get them to do it.

 

[Una]

The market is not that bad. Get your self on topcoder and get a decent level, the offers will then start flooding in. The freelance stuff I do tends to be short-term contract work. The price all depends on what it is that needs to be done and how long its going to take.

 

[-Colli$ion-]

a) Earn some extra cash (how will this affect my existing job in terms of tax etc?)
b) Gain some extra commercial development experience: looks good on the CV!
c) Possibly pursue freelance development as a full-time career and build up a client base to get away from the dull 9-5 life etc etc
Thanks

Be careful how much work you take on, because your already working a full time job and I m sure you don’t want to come home on a Friday night after a hard week and have to grind on with more work! Make sure the work your taking on you can handle and know what you’re doing, otherwise your going to be stressed out and have problems completing the work.

Tax wise, I wouldn’t worry about really unless your making a lot of money and its very permanent, I know that isn’t technically legal, but hey ... its an extra couple of quid, and your already paying full tax on your first job, its like declaring income from something you sold on Ebay 90% people just don’t do it.

I don’t see how this has anything do with your primary job, as it’s your own time, surly the contract only applies during the contract hours, they don’t own you!

Will provide you with lots of experience if freelance is where you want to go, I’ve heard there is a lot of money in freelance if your good at what you do and have a good reputation.

 

[Spider]

Thanks for all the feedback.
I will meet with the client and discuss their requirements further before I commit, but I dont mind working out of hours in addition to my existing job. I am, however, unsure where to start when it comes to negotiating a fee. Is is the norm to charge a set fee for the delivery of such a solution, or would it be more common to charge a rate depending on how long it takes?

I will check my existing contract, but I dont think there will be anything in there to stop us working out of hours - I know another of the programmers in work regularly does some additional paid-for web design/maintenance work for a local nightclub.


Some further info. on reallistic pricing policies and fee scales would be great if anyone can offer something up just as a ballpark figure.

Cheers

 

[Glaucus]

Make sure you get a list of requirements. If they wont more than this, which you will find they usually do. They will have to re-negotiate a new price for the extra content.

I would say for first time it would be easier to just do a fixed price, with a set list of requirements. That way they can't argue.

 

[Mickey]

I'd think the market for this type of work is quite dry at the moment. Most companies will just find a cheap programmer in India or Pakistan and get them to do it.

Not really, most companies seem to want someone UK based at least, many will want you to be in the same area and meet up in person too. Basically, if you're good at what you do then people will be willing to pay for you.

Tax wise, I wouldn’t worry about really unless your making a lot of money and its very permanent, I know that isn’t technically legal, but hey ... its an extra couple of quid, and your already paying full tax on your first job, its like declaring income from something you sold on Ebay 90% people just don’t do it.

The difference is that people buying on ebay don't generally want an invoice/receipt, it's not a good idea to mess about with the tax man in anycase but definitely not when there's a paper trail to show that you have been paid X amount for your services. Much easier to just do everything by the book and not have anything to hide.

When the time comes just do a self assessment and all will be good.

I don’t see how this has anything do with your primary job, as it’s your own time, surly the contract only applies during the contract hours, they don’t own you!

I think you'll find they do Most (that i've seen) employment contracts don't allow moonlighting in the same field, a lot don't allow moonlighting at all.

Will provide you with lots of experience if freelance is where you want to go, I’ve heard there is a lot of money in freelance if your good at what you do and have a good reputation.

Yes there is a lot of money to be made, also, word of mouth is your biggest friend with this kind of work BUT only if you provide a decent service/do what you say you will, when you say you will. Word of mouth can also work against you.


Other things to think about:

It'd be a good idea getting some professional indemnity insurance before undertaking the work, it'll cost you a few hundred quid, but could save you if there are any problems with the work you do - bugs, bad advice etc... which could cause the company to lose money.

Quote conservatively, it's all too easy to look at a job and think "that'll take me 5 minutes". In reality it'll not take you 5 minutes, it could take you hours or even days. Try to think about all the problems which could arise while working on the project and cover your back by getting a clear spec laid out and agreed, this might take you a while but it will be worth it.

If you're wanting to go down the freelance route in a more permanent way then get yourself registered on freelancers.net/other freelance listing website BUT don't lie about your skills, be honest in your strenghts and weaknesses and you'll have a much better time of it. It's also a good idea to join the freelancers.net and workalone.co.uk mailing lists - there's quite a lot of work to be found on there, also some quite interesting discussions to read.



Mick.

 

[Spider]

Not really, most companies seem to want someone UK based at least, many will want you to be in the same area and meet up in person too. Basically, if you're good at what you do then people will be willing to pay for you.


The difference is that people buying on ebay don't generally want an invoice/receipt, it's not a good idea to mess about with the tax man in anycase but definitely not when there's a paper trail to show that you have been paid X amount for your services. Much easier to just do everything by the book and not have anything to hide.

When the time comes just do a self assessment and all will be good.


I think you'll find they do Most (that i've seen) employment contracts don't allow moonlighting in the same field, a lot don't allow moonlighting at all.


Yes there is a lot of money to be made, also, word of mouth is your biggest friend with this kind of work BUT only if you provide a decent service/do what you say you will, when you say you will. Word of mouth can also work against you.


Other things to think about:

It'd be a good idea getting some professional indemnity insurance before undertaking the work, it'll cost you a few hundred quid, but could save you if there are any problems with the work you do - bugs, bad advice etc... which could cause the company to lose money.

Quote conservatively, it's all too easy to look at a job and think "that'll take me 5 minutes". In reality it'll not take you 5 minutes, it could take you hours or even days. Try to think about all the problems which could arise while working on the project and cover your back by getting a clear spec laid out and agreed, this might take you a while but it will be worth it.

If you're wanting to go down the freelance route in a more permanent way then get yourself registered on freelancers.net/other freelance listing website BUT don't lie about your skills, be honest in your strenghts and weaknesses and you'll have a much better time of it. It's also a good idea to join the freelancers.net and workalone.co.uk mailing lists - there's quite a lot of work to be found on there, also some quite interesting discussions to read.



Mick.

Thanks for all the info - plenty there to digest.
My contract stipulates I cannot use the machines/software at work for any non-work related use, but thats about as far as it seems to go. Which is good cos ill do it all at home.

Going to meet them next week to get a better idea of their existing hardware/software setup and a slightly more detailed set of requirements.

Im still at odds though for a ball-park figure for such a system. The company basically wants to integrate their existing systems and their manual systems into a single electronic system. Hence they will need some form of database back end and either web based clients or standalone client software.
Assuming the project will take a few months to complete (I will be doing it part time and it will have to interface with their existing software), what sort of figure should I reallistically be thinkiing about? dont want to undervalue myself, but also want to be a realist.

Thanks for any suggestions

 

[Mickey]

Im still at odds though for a ball-park figure for such a system. The company basically wants to integrate their existing systems and their manual systems into a single electronic system. Hence they will need some form of database back end and either web based clients or standalone client software.
Assuming the project will take a few months to complete (I will be doing it part time and it will have to interface with their existing software), what sort of figure should I reallistically be thinkiing about? dont want to undervalue myself, but also want to be a realist.

It all comes down to how much you value your time.

Your best bet when starting out will be to try and get an idea of how long you think it'll take you, then double that to get a more realistic figure. Once you have that, work it out from an hourly/daily rate you think you're worth. Even when starting out though you shouldn't go too low, £20 p/h maybe?

The most important thing really is not to shock yourself with the total when you calculate the figure, don't try and look for places where you've maybe over estimated, don't reason with yourself that even 1/2 that amount would still be a nice payday etc...

Also, don't let them convince you that you're better than you think and can do it in 1/2 the time you've said. You just can't.

If you get the sense that they're going to try and negotiate on price then add 20% onto your initial quote to give yourself a good starting point


Add me to msn if you like : [email protected]



Mick.