Yeah, 8 hours is only possible for short stretches on long term secure contracts. And usually that means lower fees. You need a certain amount of time for admin, marketing and maintenance work.
From previous experience, 80% productive time is considered high-acceptable and 60% is getting to the low end. Depends on your role as well.
Also as a general rule, cost multipliers are important. Standard multiplier of 2.3x of costs (then margin on top) seems to work out about right - longer term / safe / secure projects can go a little lower if you know we can bill consistently, a higher multiplier if the work is less certain / short term.
I love the idea of day rate, it means so much less stress as consultant. But what if, the client can afford only lets say 20 hours per week of time?
I am having somewhat of hard time working with clients who do not want fulltime though because:
a. Even though they pay only 20 hours of my time, they assume 100% availability.
b. It gets awkward with them when they suddenly want to increase the hours but I have already committed my remaining hours elsewhere.
>a. Even though they pay only 20 hours of my time, they assume 100% availability. b. It gets awkward with them when they suddenly want to increase the hours but I have already committed my remaining hours elsewhere.
You need what's called a retainer agreement. It will specify an exact amount of time they have to pay you for every X, as well as specify availability and charge for it. It will literally specify what availability you have to give them, and how much they are paying, specifically for that availability, and that you are working for other clients and will not necessarily be able to change the terms of the agreement without several weeks/months notice.
(Additionally, retainers are often paid in advance, not arrears :oD, and charged wether they have work for you to do or not)
They can choose to pay for 2 days, or 3 days - it's either 4 hours more, or 4 hours less for them, it's not going to break the bank financially either way.
If you can find a client who only wants you for 2 hours a week, would you take it? I wouldn't.
So would you say that the day rate would be the same as an 8 hour slab ? Or would you charge for only 5 hours.. or how does this work ?
I'm curious on how to do a fair calculation on this because, to be honest, I do spend a lot of time (that can't be calculated) thinking about the problem at hand, etc.
If you work on a day, you charge for that day. It is that simple. Work five hours? Charge for a day. Eight? A day. Eleven? It isn't your company and you only owe them eight, do I would avoid making a habit of that, but it is one day. Spend half the day thinking and half doing? Charge for the day. Spend six hours waiting for decision maker to get in for the meeting? Charge for a day.
And for the benefit of the class: nobody you want to be working for cares at all about how many hours you spend a project. All they care about is (a) the outcome and (b) that the outcome happens on the schedule you predicted.
Anybody who is thinking about how many hours you spent "thinking", "noodling", "coding", "typing", "documenting", "eating lunch", "reading web comics", or "posting on HN" is a client you need to avoid.
Plenty of adults choose to work hours over quality. Lawyers fit in this, and that's largely because a lot of their work is billed suspiciously, a lot of their work is very low status (so while highly paid, they have to work around client schedules), and because a lot of their work is dull as hell.
If you're constantly pulling 60 hour weeks (about what you have to pull to bill 40 honestly), you're likely delivering what I am pulling 35-45 hour weeks, billing 25-35, but at a higher cost to your family/health/rest of your life.
That's not adult. That's slavishly burning yourself out in your early years.
Try for 5.5-6.5.