March 27, 2017
I’ve been freelancing full time for just over a month now, and it’s been an interesting journey and a somewhat rocky transition from being an employee to running my own business. I’ve been asked a few times by people what it’s like to get started so I thought I’d take the time to write down my thoughts to potentially help anyone looking to start out. I’m a web and app developer, but I’ll try to keep my advice generic enough to apply if you’re an artist or writer or in any other line of work.
It’s very possible to hold down small part time moonlighting contracts you can do on the side. Freelancing isn’t an easy thing to do and its not for everyone, so trying it out before you dive in head first is a good idea. I didn’t do this and wish I had. At least get some practice by contacting potential clients and start scheduling work.
This advice is a bit obvious, but don’t leave your “day job” without any sort of plan or financial security, preferably 6–12 months of expenses. This is the same advice for freelancing, a startup, or just if you want to quit your job and start a beet farm. Have a plan and a way to pay the bills. Sometimes financial security isn’t possible if you just lost your job or are trying to escape a hostile one. Do what you must, but you should still have a plan and be prepared to hustle hard to get work right away.
For me, this was as simple as lining up a gig that I could do part-time or full-time, then make the jump at the right moment, when I was financially safe enough. I had enough savings to pay rent and bills for a few months, and a gig lined up to keep me going without a worry.
This is sort of a followup to my first point, but you should know that freelancing isn’t just “flexible work without a boss.” Freelancing means finding clients, negotiating, marketing yourself, doing taxes, paying for your own benefits, giving yourself time for vacation and sick days, and a huge list of other things. You are running a business, and that means you need to learn how to run a business. I’m not going to try to run down every item, so check out a list of resources that helped me at the bottom of this post.
This isn’t meant to scare you, but to ensure you’re prepared for the reality of freelancing. I highly recommend at least trying to talk to potential clients before you freelance full time. Negotiations, marketing, and other skills can be learned, but you at least need to get somewhat comfortable with client communication before starting.
Don’t feel ashamed to ask for help or to ask friends, family, or colleagues for references! Own your new life and broadcast it! Learn to hone your own pitch on friends. Ask them if they know anyone hiring contractors. Ask them to ask their friends. Don’t pester people of course, but don’t feel like you have to do it all on your own. My first gig was with a startup that a friend was working at. My second was with a friend of a friend who needed a new website built.
Work on your niche when you tell friends. Use it as an opportunity to safely hone your pitch and your specialty. “Web developer” is very broad, whereas “Wordpress eCommerce specialist” can click in people’s minds. As you find your niche, update your friends on what you do. They might not know someone who “needs a website” but it might register that they know someone who has been complaining about their online storefront always breaking! I’m still working on this myself, narrowing in on my niche, and finding how to pitch more narrowly than just “web developer.”
I try to go above and beyond what’s expected of me. This is not necessarily how everyone works and I don’t treat every project like this. But in general, I try to make realistic estimations and stick to them, yet over-deliver whenever possible. It builds trust and really can help solidify relationships, which is important especially in markets where clients don’t always trust contractors.
This could be as simple as adding a “nice to have” feature that was originally out of scope at no extra cost or providing a few extra options for a poster design. Do not blatantly lie about scope just to deliver extra “goodies”. The way I normally treat this is if I have some spare time on my hands I work an extra hour or two for free, as long as I’m on target with the main scope of work.
Please don’t go into a working relationship without a contract. I am not a lawyer and this is not law advice, so please consult a lawyer and get a customized contract for your work. It can be costly, but a simple Master Service Agreement and Scope of Work that you can reuse with each client and fit your needs exactly are a worthy investment. You should never do work without knowing the scope of the project, deliverables, and cost. Contracts are good for both parties even just as a way to discuss these points on paper in a solidified way.
Whatever you think your rate should be, you should probably just double it now. I don’t want to get into charging hourly vs charging weekly vs fixed bids, so to keep it simple, let’s look at hourly. Take the salary you want to make and divide by 1,000 for an hourly rate. If you made $80,000/year, charge $80/hour. If you made $120,000/year, charge $120/hour. This is a very rough estimate just to get an idea. From there adjust as needed. If you’re worried about your rate, just pick something and go with it, but be ready to raise your rates as you go. Most people will undervalue themselves with respect to their rate, which is why the “divide by 1000” calculation is a helpful albeit oversimplified way to avoid race-to-the-bottom rates.
As an independent contractor, you have to pay your own taxes, benefits, and business expenses. Taxes and benefits are not taken out of your paycheck so you need to make sure that the amount you’re charging covers not only your own bills, but also taxes, benefits, and any profit you want to make.
I could write a whole post on this one topic so I’ll try to keep it brief. Let’s say you’re a salaried employee working 40 hours a week (I hope you’re not working more). Do you get paid for lunch breaks? How about bathroom time? What happens if you get up to get some water? What happens if you’re feeling unproductive? In most cases, a salaried employee will get paid the overall time they spend “at the office”, not for the output of quality work. If you work 9-to-5 but take 15 minutes of bathroom breaks your employer doesn’t dock your pay 15 minutes.
Remember how I said freelancing is running a business? Treat your time running the business as part of your job. If you plan to work 40 hour weeks, but then book 40 hours a week with a client, when do you think you’ll do bookkeeping? Call other clients? Work on your website? Do marketing? All of a sudden you’re working 60 hours a week, burned out, and wanting to run back to being an employee.
A lot of people view this in different ways, but in my opinion, you shouldn’t be billing more than 20–30 hours a week. Why? Because then you can bill only your highest quality hours. Billing weekly? That still fits, I actually prefer billing weekly myself. Just assume a week is 20–30 hours and pick what feels right to you. By only charging for the real quality work you do, you’re also able to better justify upping your rate. I make this delineation easy and clear cut for my own records, as I use Pomodoro technique and just consider the time in pomodoros as my quality time worked.
Get comfortable with saying no to projects. This might be tough at first, but learn to say no to clients that raise a lot of red flags, aren’t willing to pay your rate, or projects that won’t advance your career or business. It’s a very useful muscle to flex.
These are some of the main things I think about as a new freelancer, and I definitely don’t take my own advice as much as I should. But if you’re thinking about getting started, I hope this perspective from a fresh new freelancer will help give you a better idea of what its like.
Have any thoughts on these points? Disagree with anything? Leave a response! I would love the feedback and discussion.