Rkochis (Bob):
In reply to something you said a few post up and to others in the group.
First, you are right that many companies will not hire contractor's direct as 1099's. This is on issue that won't go away. 1099 contractors are a risk for both tax and benefit reasons. Many defense contractors and larger companies work through agencies for this reason alone.
I worked with Techies.com and a company called SOHO Resource Group, Inc to create a joint venture called the "Techies Career Benefits Network" which is a business vehicle that allows 1099 contractors to become W-2 employees for the purposes of their contracts that require it.
Also, you gain access to health insurance, tax administration and pre-tax savings programs through a 125 cafeteria plan.
FYI: I make no commission, there are other services that do similar things I just liked the fee structure and hands-off approach. SOHO, the back end processor of the program does not take active receict of your client, determine your rate, or promote themselves directly to your client for additional business. This is important!
If you want additional info visit
and check out the Techies Career Benefits Network. They have a no-obligation free quote when you click through to the SOHO site.
Regarding rate: I work for companies in L.A., Phoenix, Atlanta, Manhattan, and Minnesota. I do not believe, in amy major metropolitan area, that you need to discount your rate for regional acceptance. It is much more an issue of how you market, how you get the contract (referrals are the best), and simply setting "your worth" somewhere.
However, you must also guage what you do. If you are strictly performing technical functions based on your client's direction, you will alwasy have diminishing value as technology changes and becomes more of a commodity.
I have never even looked at a salary survey or rate survey. I don't believe they are meant to gauge those who provide excellent service and create innovative solutions. And if your desire is to be a consultant/contractor, you should be looking to provide those things.
Regarding payment: Never, never, never, never, as an independent, take on a client who's payment terms create cash-flow issues. I consult a lot of contractors in this area and always suggest about the same thing.
When I take on a client, we create a scope of work. I issue a "work initiation invoice" as part of my proposal. Basically, if the project is less than a month, it is 50% of scope of work with final payment due 10 days after completion of project.
The contract is worded something like:
"A signed copy of this document and a work initiation payment for $3,200.00 (Three-thousand, two-hundred dollars) is required prior to project inception. I available to begin this project as soon as mutual schedules permit."
If the project is longer I take a 1/3 of the first month's estimated scope and create a billing/payment schedule. I issue invoices on Friday (every week) and receive payment the following Friday.
In many cases I take a 2 week retainer, and then bill against it. When the contract is up, I issue and invoice and pay for it with the retainer.
Before I hear any cries of that is not realistic, I have worked for several large government contractors (perhaps the worst in length payment terms). Without exception I have all of them on a 10 day payment cycle with retainer.
I am very frank with them and explain that I cannot afford to fund their payroll. I am a small operation and cannot keep both a reasonable rate and an extended payment cycle.
In those cases that they do not agree to the terms I do not work for them. It is not worth the worry and frustration.
The phrase I most often use is: "It is hard for me to remain interested in your project when I have to worry about finances."
I am blunt because in most cases they respond. Once again, if they do not, they are not the type of client I wish to work for. I provide value and am not there to perform charity work.
The only time I have altered this is for long-term contracts where I am paid weekly. In which case, I bill on Friday and get paid the following Wednesday.
Just a thought but I have done this since 1992 and was counseled the same when I started my consulting practice. I just signed a contract Friday and spoke to someone yesterday and received verbal agreement to the terms right off the bat.
In most cases, the "good" clients appreciate getting that piece of the negotiation out of the way. Once again, if not, they are the wrong client for me.
I hope this is helpful.
Matthew Moran