How Much to charge

I basically love programming and do it as a hobby but I am being inundated with requests to write software for businesses.
My question is how does one charge for writting custom software, by the hour ?
and if so how much USD per hour ???

It depends on how many bills and how far behind in rent you may be. ;)

All kidding aside, there are two way to charge for a programming project:
1.) Fixed Price - You quote a flat price for the entire project. This would be based on what the value and savings is to the customer and the Return On Investment (ROI). You cant charge alot for someting that saved the customer a few buck per month.

2.) Time and Materials (T/M) - This is an open-ended hourly quote and rate. If you think it will take 50 hours to program and you charge
them $80 an hour then your total price would be $4,000. Then if there are issues you can go over the hours freely since its open-ended,
but these are the hardest to sell since the client know this and doesnt want the project to become a runaway project costing them
big $$$.

Tks RobDog - Good Luck with the car
ps I also enjoy woodworking !

Thanks!

Quoting projects is a art form. After a few of them you will be able to fell out your clients for how much you cna charge. Remember that you
want to NOT rip them off or you will be eliminating your future posibilities for more work and referrals for other jobs with other clients, etc. ;)


I just got a Porter Cable Nail Gun as an early B-Day present from my Dad. Cant wait to try it out :D

Just to add a little something to what Rob has said - setting a precedent can be a huge problem to overcome also.

So do not "low-ball" the price just to get a job, as you will be hard pressed to be able to increase it later as other jobs come along with this customer.

We happen to have few customers and a constant flow of new software development for these clients - so it's a problem that might be specific to our situation.

We also sell software with ongoing maintenance fees of 10% to 15% of the original purchase price - and keep a relationship with the customer for as long as possible.

Just to expound on szlamany's point a little...

You can always lower your price, if needed, but you when you're selling a service you can't, other than on something like an annual basis, raise your price unless/until you have more demand than you have capacity and only then if your customers are aware of that and value your service enough to out-bid the others.

We partially solve this by quoting a project with either more hours or give less features or functionality. Then when the client wants more
we can get the rest of what we originally wanted. Kind of like buying a car. You want the car but for the least price. Then they always give you
the optional options that will cost you more but at least you have the ability to choose. This is another method that clients like is to be
partially in control of the pricing but not realizing that they actually dont have control. ;)

So you can say "Yes, I can do that for you but it will be just the basics for $xx,xxx.00 dollars. If you want to be able to do this part then
its $x,xxx.00 more." and so forth... :D