You're thinking large scale projects & clients here, though. For smaller scale work and titchy clients (a massive marketplace where some of the most successful consultants I know operate), "daily rate" just doesn't work (YMMV). Neither does fixed price, really.

I spent a period charging daily and half day rates based on the advice of someone else - it was a pain for me more than anything. I spent more time asserting to clients that this was better for them than actually pitching for the work :) (bear in mind that for small scale projects the client is probably unused to the traditional consultancy models, at least in my experience).

As an individual developer, if someone is asking me for less than 6 hours worth of work a month it is better for me (in terms of scheduling, justifying my timescales and actually obtaining work) to bill hourly.

I've tried various methods of billing and hourly has always resulted in the most work, less stress and highest revenue. But, obviously, this is only as an individual.

Many people poo poo such bit-part clients - but they have always been my most reliable revenue stream; in terms of follow on work and referrals. Larger more consultancy minded clients (billed daily) hardly ever end up with follow up and are way more aggressive in obtaining completion.

But as with all things YMMV; most of the developer consultants I know have their own individual viewpoint (and we're all fairly evenly successful).

The industry standard project in my field is 2 people, 2 weeks. We do one-week projects, we do sub-week projects, and we do multi-month projects, but the modal project staffing is 4 person-weeks. These aren't huge projects. We work with as many startups as we do with large financial companies.

I'm having a hard time understanding how a simple daily rate causes you more stress. Why were you discussing with your clients how a "daily rate was better for them"? It's perfectly OK for the daily rate to be better for you, full stop.

If your dealflow is dominated by a few recurring clients, you should consider whether you have something more analogous to a retainer or staff-aug arrangement than a true project model.

What makes me nervous is the overwhelmingly obvious fact that nerds like us are all too happy to leave money on the table. "It's stressful for me personally to effectively receive 8x$hourly instead of breaking out precisely how many hours I worked so I can justify 6x$hourly with the client without arguing". Well, you just left a new iPad on the table; if your clients are forcing you to do this because they are fucking assholes, then get better clients. It is a seller's market right now.

> What makes me nervous is the overwhelmingly obvious fact that nerds like us are all too happy to leave money on the table. "It's stressful for me personally to effectively receive 8x$hourly instead of breaking out precisely how many hours I worked so I can justify 6x$hourly with the client without arguing". Well, you just left a new iPad on the table; if your clients are forcing you to do this because they are fucking assholes, then get better clients. It is a seller's market right now.

I wish I could somehow cause this to be bold and in 36 point type.

> These aren't huge projects

For me, an individual, that is massive.

Where I work (now part time) that is average. But what works for a multi-person company doesn't necessarily work for individuals :)

> If your dealflow is dominated by a few recurring clients, you should consider whether you have something more analogous to a retainer or staff-aug arrangement than a true project model.

So my client list consists of around 50 regulars who will ask for work on irregular schedules, averaging around 5-7 hours a month (totting up to around 25-30 hours). Word of mouth can add 1 client per month. Together it equates to 80% of my work.

A retainer model would put off almost all of these clients.

> Why were you discussing with your clients how a "daily rate was better for them"?

Usually the discussion went like this - Please quote us XYZ

- Here you go, X days @ £Y

- Days??? What is this?

- Sigh

(also; I noted that clients seem to see "8 hours" as lot less than "1 day", even if you're charging the same - something I tested on a couple of in-tandem clients)

> "It's stressful for me personally to effectively receive 8x$hourly instead of breaking out precisely how many hours I worked so I can justify 6x$hourly with the client without arguing"

I think your views are skewed by the sort of clients you have. The only clients I've had who didn't query daily rates are companies large enough to have a HR department. I personally hate those - they waste my billable hours on bureaucracy, and I prefer to be paid to code :)

I also don't understand the argument you are making; one of my reasons for changing back to hourly billing is that my daily rated plateaued at around £900 (and I thought I was worth more). My equivalent rate now is much higher (~£1400), and I work more "days" in the month.

> It is a seller's market right now.

Absolutely; and there are some of us mopping up the lower end of the market. Demand is outstripping my own availability to the extent that at the moment "small projects only" is my maxim.

I understand where you are coming from; but this is my viewpoint after fine tuning small-town consultancy for ~18 months, as an individual, of how I can make the most money.

For a business on the scale you operate, yes, daily rates is the standard (and best) model.

p.s. from another comment I noticed:

> Worth noting: good clients tend not to pay anything for the 1-hour "oh cripes" conversation. I'm extremely unlikely to bill for an hour or two of work.

For you, that is easy soak. For me, I make myself available these very-occasional crisis moments - but that is two hours I can't just wave off... bill!

And the client is happy with this; they don't have to pay an expensive retainer for something they use at most twice a year. They just pay when they need me. Best of all it works for me because I am not obligated to them; so if they call and I am not available they don't get snippy because they are paying me to be available (nasty experience of this).

I do have one client who retains me for high availability - and their "hourly rate" is 250% higher than normal. They tend to be quite demanding.

Again, only my 2p. :)

Look, if you're happy, you're happy. I've read your comments for years, like them, and certainly don't want to condescend to you.

I generally think you will make more money and have less stress if you can adopt a business model that doesn't involve mopping up the low end of the market at an hourly rate.

I can obviously see how switching from low-end hourly work to daily rate or project work could be stressful. I'd just say, recognize that the stress is coming from transitioning your business, not from the difference in client expectations. Transitions are painful. Better clients, as a rule, are not; we might effectively call this "the patio11 rule": your customer service burden diminishes as your price raises.

That said, if the transition isn't worth it to you, it's not worth it! There could be lots of reasons why it wouldn't be.

Hehe, yeh, I'm not intending to sound argumentative - just throwing out my contrary viewpoint to that of you and Patrick.

You've fairly hit the nail on the head, BTW, in noting the problems of transitioning. I'd love to have larger scale projects (if I could actually keep interested in them ;)) with "better" customers (for whatever value of better). One problem for an individual, though, is actually gaining work - I hated doing that. The thought of having to constantly pitch for work (and to a certain extent managing it) puts me off.

But on the other hand - these smaller customers are currently getting shitty snake oil work, so when they hear about developers doing solid work in a friendly way they will come and bite your hand off.

To some extent I view that a "good customer" as much as anything :)

How would you get started in this seller's market?

> * Clearly state in the SOW that if additional time is required beyond the quoted amount, additional person/days can be staffed at a pro-rata daily rate.

I (and I imagine a bunch of other people) am curious about this point. I worked at a previous company that ostensibly had terms like this, but it never worked out, because in practice the clients almost always bullied my bosses into giving them the extra work for free, because people don't like cost overruns. Did you guys find that you had a lot of resistance when it came to overrages?

We've been doing this since holy shit I'm old. Overages (and underages) are very rare. I'm sure I've given more days back than I've ever asked for in additional time.

The thing that normally happens is, you're attentive to your project, you see schedule problems coming a week or two away, you make it very clear to your point of contact that there's a storm brewing on the GANNT chart horizon, and then you adjust project scope to account for it; this is the consulting version of "slipping features, not the date".