mobile-apps, startup-costs, android-developmentI am a newly graduated software developer, who has been asked by a friend to develop an app on the android platform as a freelancer. I have developed 25+ small android applications in the past (ranging from lots of small applications to a few larger ones) and I am certain that I can do a good job, but am not certain how much to charge as this is my first project for a client. I will not be doing ‘mates rates’ as I have been down that path in another career and it is not a good idea, but want to be fair! My friend has already used my existing applications and understands the quality of my work is high.
The application will be subscription based for users, and in a nut-shell, allow them to input and analyse lots of raw data, in order to chart progression and aid improvement. The data will be held in a relational database on a remote server.
The basic idea is that user will be able to see a detailed, easy to understand, and visual representation of the change in various aspects of the inputted data over time. It will be quite a complex time consuming task to organise and analysing various aspects of the data that the user puts in. (I can not say much more as I have signed a non disclosure!)
I will be coding the application as well as designing and creating the UI.
With my given experience, how much would be fair to charge? I can imagine the project taking several months for me to complete.
Thanks!
Ok, let’s crunch the numbers to get an estimate of the cost to develop this app.
First, calculate the hourly rate you need to charge. Most freelancers calculate it by estimating how much they would get paid as a regular employee. Let’s say the average android developer salary is $100,000/year in your area. That means you would be getting paid around $50/hr.
However, as a freelancer, you have to pay deal with more taxes and overhead and need to charge more. Those additional costs might require you to increase the hourly cost by an extra 20% to avoid losing money (otherwise you’d be making less than the local average and taking on more risk). That increases the rate to $60/hr.
If you are unsure about this number, simply increase the cost a little bit more so you have room for negotiations. Rule of thumb is to take your calculated hourly rate, double it, and add $10. In this case would be:
($50 * 2) + $10 = $110/hr
That rate might seem exaggerated, but it’s actually normal in some areas of the USA.
Second, you need to figure out how much time it will take you to develop this app.
You mentioned it would take “several months”. That isn’t a good estimate. The way to approach this is to take make an educated guess based on your past experience and doubling it. Let’s say you guess it will take 3 months. Let’s calculate that:
3 months * 2 = 6 months
Six months might sound like a lot, but remember that you don’t know what may come up and need to have enough time to deliver a good product.
What if the client complains about the estimate. They might say that’s too long. This is normally an objection based on money (meaning it will cost them too much). Ask them about their budget. Might be that they only have enough to pay for 3 months of development. You can then remove features and still deliver something that fits their budget.
Note that people will want to get as much from you for as little money. It is up to you to figure out how much money they have and calculate how much you can deliver for that amount. They have NO say in your calculation. They can either afford it or not.
Third, you can now calculate the actual project cost by taking the numbers defined above.
(hourly rate * hours worked per month) * time estimate in months
Assuming you will work 160 hours a month (8 hours a day for 5 days a week):
($60 * 160) * 6 = $57,600 or $9600 per month
I know this sounds like a lot of money, and to some people it is. But don’t let it impress you. Realize that there are freelancers / consultants charging 10 times that for the same type of work.
What you really need to figure out is:
If the budget is not enough to afford you, then pass. Life is too short to deal with that stress.
Most friends make horrible clients (as you’ve discovered), because they will take things personally. It’s human nature. You need to figure out if this will be the case. How? Simple. Tell them that the project will have a paid discovery period of two weeks. You will work with them to do establish what features need to be done and provide them with an estimate of the project cost. Charge them 10 hours at your rate ($600 if at $60/hr). Most reasonable people won’t mind because this is not a lot of money. If they do, figure out why. It might be that they lied about their budget and have substantially less.
Oh, and two last things:
Make sure to get paid on a weekly or bi-weekly basis.
If they stop paying, stop working.
Good luck!
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