That's a pretty great first year as a freelancer, maybe even an amazing first year. I'm in my 17th year and am tempted to think that if I started out like that, I'd be retired by now ;-)
My first year was like: "Client bought me a computer! That was amazing. Man these eMachines boxes are a steal. Got some software from school, too, and a former employer gave me Photoshop 4.5 on a CD. [Update a month later] Oh, I get it. People give you free stuff hoping not to have to pay you later."
It's strange that this person didn't also describe the lessons they'd learned about Content Marketing, but I guess it doesn't work if you point that out.
From looking at their submission history, it seems this is the first "hit" they had, so content marketing probably hasn't helped much... until now.
FWIW my own pipeline of consulting clients relies solely on introductions and blogging ("content marketing" but much less formal). I continue to encourage new freelancers/consultants to write and share their knowledge more often.
I'm a bit cynical because I know good marketers maintain rep on many accounts on several key social network/forum sites. It's easy to do. Just queue up some actually interesting informative posts and the do a little automation to spread them out over time.
By "write and share" I meant writing substantive and informative content such as essays and guides. I did not mean social media posts, which I think is what you're referring to.
> Silvestar is a fearless web developer and consultant, JAMstack enthusiast and Wordpress coder currently available for hire.
This person may have accidentally reinvented content marketing but they aren’t implementing a known good strategy. They are a web developer, a coder, available for hire. They say they’re a consultant, which is nice but they don’t understand the difference between a consultant and a contractor. A consultant is way more expensive. If this person has a marketing position or a niche I don’t know what it is. I’m completely convinced they’re a good web developer but they don’t have a market position more differentiated than “I build websites”.
Actually, this "Consultant" part is released today. I could consult a client, and charge my hours, but I wouldn't mind if someone else implements the proposed solution. :-)
Great. I wish you every success but if I might offer some suggestions you need to figure out what expensive problem you are solving and sell that solution. Persuade people you can save them a lot of money or make them a lot of money and sell based on the value you can provide for them. Not a coder for hire. Sell based on value, not capacities.
A developer for Toptal tops out at $3,200 a week? $80 an hour is peanuts in software engineering and they certainly aren't attracting the entire "top 3%" of "experts in the field" with such a low, max rate.
https://www.toptal.com/faq#how-much-does-toptal-cost
$80/h would be great for a full-time employee in most of the US (outside of SV of course - a safe place to sleep doesn't have to start at $4k/month).
For a freelancer it would suck. I'd be a nervous wreck every time I found myself between clients. Which is why I'm not a freelancer. If I could get $100+/hour, I probably would be :)
Lets choose SF since it's a pretty popular tech hub:
$80/hr in SF = Lets assume 10/12 months billable (optimistic) the rest looking for clients or on vacation that gives you 80 * 8 * 5 * 4 * 10 = $128,000
28% federal income tax +
15.3% self employment tax +
7.25% California state income tax = 55.55% in tax.
$500/mo for food = $6,000/yr, $11,896 - $6,000 = $5,896
W/S/G + Electric = $50/mo, $600/yr, $5,896 - $600 = $5,296
Internet + Phone = $600/yr = $4,696
So yeah that's not actually a lot depending on your location. I am sure if you are a great developer living in Thailand than $80/hr makes you a baller.
Keep in mind that Toptal keeps a significant chunk of that so a developer is left with much less. I am on Toptal platform myself and think that it's most suited for those like me that are from countries with a relatively cheap cost of living.
A bit late to the party, but they don't keep a percentage of your rate. You set your rate and that is what you get paid. Whatever they take as commission is between them and the client.
In maybe 3 or 4 cities worldwide, sure, you might be right. That leaves plenty locations where $80 per hour is insanely well paid. And most folks live in those other locations - including some top-3% experts!
Right? Top talent in software engineering can generate billions in revenue through their work. Getting paid $80 per hour to help your client make 2 billion annually? Fuck that.
I'm not in Toptal, but a friend is and he asks for around $5k a month. Here in Brazil it's insanely good. I don't personally know anyone else who receives more than him here, actually. In software dev or anything else. I don't go around asking how much people make, though.
5k a month is ridiculously good in South America. Even if he's doing taxes like he should (which would bring him more in line with the averages for a senior software dev.) it's probably 30% to 50% more than he'd get as a salaried employee.
The only client I landed, following the guidelines stated on the link (cover letter, etc), was for a very niche job (IoT/FPGA related). I undersold myself as it was my very first gig on Website.
The client ended up hiring me and another guy from Country. They explained what they had, what they wanted, and I explained the problems with their architecture and possible solutions. The other guy was like, yes, all can be done, yes, great idea, sure, it's easy, yes, of course, nothing is wrong, it's so smart.
I was constantly dropping quotations from RFCs, IEEE, FCC and recommending hardware choices for backing it up with documentation, but they consistently followed the other guy's advice, to the point of deploying extravagant and unnecessary hardware: think of a workstation plugged to a Zynq, plugged to 3 Arduinos, and a Stratix 10 in the middle with a plethora of custom circuits and transceivers attached kind of mess, just because the guy only could find libs and IPs that ran precisely on those devices to do the puzzle that he himself sold to the client. I suspect this was not out of pure incompetence, but an evolutionary way to make one seem expert and make the project take longer to cash in more money.
And all of this was ON REMOTE. We literally had to ask the remote office to verify connections, and status LEDs on the devices, and obviously debugging out of business hours was an absolute PITA.
The other guy was insanely productive, in a meaningless kind of way. Everything was documented but badly, some stuff had CAD, some hand drawn; the designs had some corner cases well thought and commented, while basic things completely overlooked. Half of the code was copied from OpenCores, Arduino examples, etc, and the other half didn't make any sense. The only way I could describe him is as a bored engineer on the 5th day of a meth binge.
One day I just snapped during an argument, calling their project "Internet of Spaghetti", and called it quits. Then the client contested all the hours I filed, and Website took their side, I assume because they had high rating and I had just started.
Then I went back to corporate, it's boring but I don't have to deal with such bullshit.
Yeah a corporate job may be 'soul draining' but at least they are legally req. to pay you. This sudden interest and push to freelancing and gigs seems like a way to inure people to the loss of this ironclad right to get paid.
Honestly it could all have worked out just by having the hardware at home. Instead of one of each, buy two, have them shipped. It's one of the things I asked, they refused because of budget and trust.
Hindsight is 20/20, but I should have dropped it in that moment.
You are thinking like an engineer not like a businessman. I'm speaking from experience here as I have been (recently) guilty of the same thing and I assure you my case was much, much worse.
Engineers love to solve problems. They love it SO MUCH that they very often do it for free (see: opensource). You yourself said you 'underbid' the project. You were trying to solve a problem with logic, reason and an attempt to deliver a clean, well functioning, properly designed product.
Business do not care about those things. They care about 2 things:
1. Money
2. They want it to work
Your best defense against stupidity that has money is to collect money as often as possible. Get a deposit, stop working if they are late on payment, changes cost more, phone calls where I'm consulting to you costs money.
It's hard to hear, but the other guy kind of did it right. Save yourself a lifetime of lessons that I have learned (or stay in corporate) by simply treating every single client like you are running a business.
Be transparent about your unwavering focus on payment. You can do that and still be friendly by the way.
You (and I) think "I'll do an amazing job, this product will be clean, fast and standards compliant AND cheaper!"
And when you are done all they will say "does it work?"
The unclean truth is, customers don't care about well functioning, well designed code until NOT having it costs them money. See #1 above.
Of course you have the choice to not continue working with these types of clients, but, the truth is there's going to be some insanity in any business. Lessons are hard to learn and the best you can do is protect yourself and be honest, meaning, "This isn't the right way but it'll work and save you a few bucks, is that OK?"
Seems like a problem with trying to remote for hardware in the first place? But this is a great example of how (remote) freelancing/consulting doesn't work for everything.
For citizens of developed countries, freelancing seems like too much work for little pay. for coding and web work you're computing with foreigners who can do the job at a much lower price. Bidding process creates a race to the bottom
As someone who does freelance in a developed country, competition from foreigners isn't too big of a deal.
The main problem is, with the way businesses are ran in the US, it's REALLY expensive being self employed. You pay a massive amount in taxes and you don't get any social security matching from an employer or health, dental, etc. benefits.
Basically, you need to make a LOT more pre-tax to come out to the point where you're living the same type of lifestyle as someone who has a full time position.
Seconded. You learn the hard way to immediately carve 30% of your income to a savings account that you don't touch that goes straight to quarterly tax payments.
> You learn the hard way to immediately carve 30% of your income to a savings account that you don't touch that goes straight to quarterly tax payments.
Yes, and if you avoid paying quarterly taxes or underpay by accident (because you made more than you thought you would have), you get hit with a huge penalty.
Also it's really brutal that certain things have no effect on your "small business tax" of about 13%.
For example, let's say you make 100k and you had 50k in medical bills for an emergency.
For most people, this is easy. About 90% of that can be written off your income tax. So you'll get taxed at 65k income instead of 100k.
If you run your own business, you'll get that same income tax write off (65k effective income), however you'll need to pay an extra 13% on 100k not 65k. You're on the hook for the full "small business tax" on your total income in this case.
It's complete bs because most medical emergencies (regardless of cost) are things that render you unable to work or do anything. Insurance doesn't even help either because there's a million loop holes to allow insurance companies to deny you coverage on certain things.
One of the things I “miss” most about freelance is cutting giant checks to the IRS every quarter.
That being said going freelance means you can deduct all kinds of crazy stuff to bring down your income like your cell phone, internet, a portion of your housing costs for home office, electricity, meals & entertainment, computer hardware, car, etc.
You also get to setup an SEP IRA which lets you divert substantially more pre-tax cash into retirement than you could with IRA’s and 401k’s offered by a W2 shop.
One key thing to remember is W2 employers pay a bunch more payroll taxes “behind the scenes”. As a 1099 you get exposed to them directly. In addition you get exposed to state / municipal business taxes as well. Thus, you need to factor all that into your bill rate.
In the end, I think the taxes can work out much better for those self-employed. It just requires some planning and help from your accountant.
Say whaaat? You must not be based in the USA then. Owning your own business means EVERYTHING is a tax write-off. I mean everything. Food you spend on lunch, your home office space, anything you spend money on during the course of doing business. All of it is a tax write-off.
You do not get any of those write-offs if you work a corporate gig. If your income is the same in both cases, you will pay significantly less tax as a freelancer.
I do live in the US as a solo freelance developer.
You can't write off food in most cases, and if you happen to work from home, you can write off some of your home office (based on square feet), assuming you have a separate work room from where you sleep.
For example, you can't just buy $300 / month in groceries and expect to be able to write all of that off because you happen to eat 3 meals during "work hours".
Sure if you goto a tech meetup once in a while and eat dinner out, you could write that off, but that's an outlier situation (at least for me).
Having your employer match a retirement fund + benefits + not having to pay both halves of social security is a lot more money saved than being able to write off buying a computer, cell phone or a couple of meals.
> but you can write off your internet bill, you phone bill and all that.
Internet + phone is about $80 / month total. Even if you somehow managed to write off $100 / month in food (which I think is a stretch) that's still only $180 / month.
Compare that to paying for health insurance which is around $500 per month per adult for the worst coverage possible. Normally this is a freebie for being employed.
Then you get about a 7% increase in post-tax income just because your employer pays half of your social security. Then on top of that you might get matching up to a certain percent in a retirement fund. Then on top of that you might get other forms of insurance plus stock benefits. Then on top of that you might get free lunch every day too.
Long story short, writing off $150-200 / month in business expenses is not even in the same galaxy as not having to pay $500 per adult for health insurance plus an extra $7,000 in your pocket per year from going halfies on the social security (100k salary). That's already wildly better and it's not even taking into account for retirement matching perks, stocks, other insurances, free lunch every working day, etc..
Yeah you're totally right. In my freelancing days, I didn't need healthcare really, I was 22. That being said, I feel like a good software consultant can pull down 250/hr, which probably more than compensates for healthcare. You'll pay more tax, and more for healthcare, but probably still come out ahead.
So maybe that's the formula, work a corporate gig until you're a legend, and then become a consultant. :P
If you're in a situation where you're competing with low cost foreigners on price, then you're doing it wrong. There is a huge market for freelance software engineers who are based in the U.S. and speak English (or who are based in Germany and speak German, or whatever). If you have a client who will benefit 5x+ from the money they pay you, they don't really care that there is somebody in Eastern Europe or India who will do the work for 1/3rd the cost; the overriding importance is on getting the work done well and quickly. Fluent communication is critical to this.
You just have to find the clients (the hard part). What has worked for me is making myself visible inside of my particular niche, then forming relationships with established freelancers so they send their overflow my way. Still in my first year, but this strategy seems to be working.
Case in point: I just got an email from a client who wants me to take an image from their designer and turn it into HTML + CSS (not what I normally do, but you end up doing weird stuff to take care of good clients). They are going to pay me about 10x market rate for this kind of work. But they probably need it for a sales demo and they know that I'll get it turned around for them quickly and it will be done right.
That's what consulting clients are paying for: an assurance that things will be done right and on a dependable timetable.
This meme that people from Eastern Europe or India are less capable purely because they live in lower cost-of-living economies is a disgrace. Sure, there's horror stories with big corporations farming out work to random consulting companies whose primary goal is to squeeze money instead of delivering value, but if we're comparing individual people as we are in this thread, that's a very different story.
I also doubt that the advantage of being a native English speaker matters much if you cannot express yourself in a clear and concise manner, which has less to do with country of origin, and more to do with your grasp of the subject at hand and your ability to think straight.
> This meme that people from Eastern Europe or India are less capable purely because they live in lower cost-of-living economies is a disgrace.
To be clear: I didn't say that.
> I also doubt that the advantage of being a native English speaker matters much if you cannot express yourself in a clear and concise manner, which has less to do with country of origin, and more to do with your grasp of the subject at hand and your ability to think straight.
You need to both have a firm grasp of the subject matter and be able to speak a shared language fairly well. There are lots of companies where the overhead of dealing with somebody who doesn't speak English well and is in a vastly different timezone just doesn't make sense. I mean, when you're dealing with technical subjects, below a certain level of fluency, it's hard to even know if the other person understands the subtleties of what you're talking about.
I'm in my first month freelancing. The last time I wasn't in a full-time job was when I was running a small web design company in the 90s (it still exists and is run by @prawn).
Finding work was not difficult – I was lucky enough to book all of my capacity from day one. The biggest challenge I've had so far is managing my time across clients, and adjusting to not having a team.
I do E-commerce consultancy, CRO and Facebook advertising (still figuring how much to specialise).
I was fairly fortunate to bring by previous employer on as first client, the rest of the leads have come through my personal network. The nice thing about prioritising lifestyle over growth is I don't need many clients.
* 100% money-back guarantee (no one has asked for it)
* Having an accountant
What did not work:
* Thorough proposal / contract documentation. I figured having detailed, in-depth scope of work showing I had knowledge of their industry, problems, etc, would help close deals. The teams that closed the fastest already knew they wanted to work with me, but the ones that weren't sold couldn't even be sold with excellent SOWs and proposal documentation.
* Having a lawyer. For a one-man consulting shop, you really don't need one. Most standard SOW/Contract/IP documents are easy enough to generate/find yourself.
* Toptal / Upwork / any of those race-to-the-bottom sites. There's great arbitrage if you're international like OP. But I'm in the US, and it's not worth the effort for US rates.
* Meetups. I just didn't invest time in them (yet). I think the next leap in rates will come from becoming more "well known" through blogging and speaking engagements, which this is a key area to invest in.
* All this "double your rate" business. Sure, I imagine this works if you're used to pulling in $50/hr, and I imagine Brennan Dunn and the sort are marketing themselves at more commoditized development. But trust me, people ran away when I doubled my rates. I had to find a sweet spot and build up my rates slowly per client rather than just assume I was wildly undervalued.
What I teach is largely about repositioning yourself and focusing on the value you create vs just the tech. Not surprisingly, few freelancers focus on business outcomes. Higher budgets and pay are a natural side effect of doing that.
Full disclosure: you absolutely have had a positive impact on my business. The double your rates thing was the only part that didn't work because I think I started at a pretty decent rate to begin with. I listened and studied your podcast episode with Patrick Mackenzie at least 5 times. I've read plenty of your posts and studied your HN comments extremely carefully. So very much, thank you for that!
Also, it means quite a lot for you to say that you think I am doing well. I still feel like I haven't nailed positioning yet (any ideas: https://anonconsulting.com), and I'm always looking for feedback. Nonetheless, I'm still extremely grateful for the work you put out.
Impressive! Where do you look for new clients/projects? Do you contact possible clients and offer them your services or do the contact you based on your blog/consulting page?
Networking the old fashioned way. Ask my friends who needs help. If they don't need help, ask them if they can think of 3 friends who might. Email/text those 3 people. Wash, rinse, repeat.
You also built one of my favorite unique sites (share latex).
I’m curious and have a few questions:
- how did you manage 5 prospects per day? That seems like an incredible amount of work that would break up my flow. Is this more like one day a week of hitting up 30 leads? Where did you find all of these prospects?
- why did you choose a 3 pronged approach of blog post, personal site AND consulting site? What’s the incremental value of the other two given one?
- can you describe, or give any links about value based fixed cost pricing?
> You also built one of my favorite unique sites (share latex).
Credit where credit is due: Henry and James built ShareLatex. I simply re-skinned it. They are the real heroes.
> how did you manage 5 prospects per day? That seems like an incredible amount of work that would break up my flow. Is this more like one day a week of hitting up 30 leads? Where did you find all of these prospects?
I aggressively sought opportunities. I recently posted about the collection of remote job sites I found [1], trust me, I was doing a lot of outreach and taking meetings. The advice I got from a dear friend was I should be networking at least 2 hours a day. I was doing that on top of the 8ish hours I was billing to clients.
> why did you choose a 3 pronged approach of blog post, personal site AND consulting site? What’s the incremental value of the other two given one?
Good question. I came to this conclusion after months of torturing myself over trying to master my personal brand. Here's why - your personal site serves to drive an audience of people who google your name. Those may not be the same kinds of people who are looking for consulting. Plus, if I every sold my consulting business or pivoted, it's not tied to my name. Same with my blog. Better to name your blog in relation to the vertical you are pursuing, rather than have it be yourname.com/blog. No one is googling the topics I'm interested hoping to read about my opinion. They just want an opinion/content from an authority. I write about front-end/development/UIs, so UserInterfacing as my blog is much more relevant than simply my name. Does that make sense?
> can you describe, or give any links about value based fixed cost pricing?
Guys like Brennan Dunn and Jonathan Stark are all about this. Check their stuff out, they're really much better at it than I am.
> networking at least 2 hours a day. I was doing that on top of the 8ish hours I was billing to clients.
I have to say that sounds like a brutal schedule. On top of being a very smart guy, you seem like a very hard worker. I'm glad you've enjoyed so much success.
> ["3 prong approach explanation"]. Does that make sense?
Yes, thank you for this explanation. It is well reasoned and stated.
* Study everything that bdunn and patio11 have to say on here. They get it.
* Read Million Dollar Consulting. There's a whole blueprint in there to turn yourself from an everyday freelancer to a pro consultant mindset.
* SimpleProgrammer was okay. Read it if you want, but it's a bit gimmicky.
* * * H U S T L E * * *
I cannot stress this enough. At the end of the day, the only reason I got here is because I do what everyone else is not willing to do. I work my ass off and I still don't feel like a success at all. I'm a charlatan and an unknown quantity. That desire to improve and work harder is the only thing that has gotten me to where I am. Everything else is just the cherry on top.
Start by asking if your friends need work (email, text, phone call). If they don't, ask them if they know anyone that does. Wash, rinse, repeat. That landed me in a few VC offices, which landed me meetings with startups and some other agencies. I'm in Boston :)
I cannot speak about Toptal, but Upwork works pretty good. You just have to avoid silly jobs,be focused and perservere.
Disclaimer: I'm italian, working remote, strong focus on nodeJS and fintech, estimated revenue for 2018 (first year of freelancing full-time, not fully from Upwork): 360K$, working 220 days per year
Would love to connect and learn more about your experience. My email is in my profile (I dont' see one for you in yours), please reach out. My experience with Upwork is it was a lot of noise and you had to work your way up doing a lot of low-rate jobs first which was mostly beneficial if you got on the network early.
As a freelancer with clients, are you generally on deadlines? Or is it work when you want? Essentially I would like to work somewhere around 3 days a week but I am not sure that projects would be able to meet deadlines that clients want. In digital agencies I have worked for, I have had to shown work done every week. And the amount of work given to me was such that I had to work the full week. If I were to do that freelancing I would certainly make more money, but I am hoping that there are jobs where deadlines are based on average around 3 days work...
Either charge a fraction of your weekly price, position yourself as part-time, or prove you can hustle. If you can get 5 days worth of what they think of a week's worth of work in 3 days, you've arbitraged the effort
I'm assuming you transitioned into consulting from a corporate role. Were there any steps you took in preparation for that transition as well as any "exit criteria" before making the transition?
I took on part time gigs to build my portfolio while I was working full time. Then one day a client wanted a 1 year full time contract (turned out to only be 6 months) and that was my stepping off point!
This is an interesting discussion... but it really has nothing to do with the article. Which, really doesn't say much of anything unlike the note from acconrad, which gives real details.
87 comments
[ 2.3 ms ] story [ 95.2 ms ] threadMy first year was like: "Client bought me a computer! That was amazing. Man these eMachines boxes are a steal. Got some software from school, too, and a former employer gave me Photoshop 4.5 on a CD. [Update a month later] Oh, I get it. People give you free stuff hoping not to have to pay you later."
FWIW my own pipeline of consulting clients relies solely on introductions and blogging ("content marketing" but much less formal). I continue to encourage new freelancers/consultants to write and share their knowledge more often.
> Silvestar is a fearless web developer and consultant, JAMstack enthusiast and Wordpress coder currently available for hire.
This person may have accidentally reinvented content marketing but they aren’t implementing a known good strategy. They are a web developer, a coder, available for hire. They say they’re a consultant, which is nice but they don’t understand the difference between a consultant and a contractor. A consultant is way more expensive. If this person has a marketing position or a niche I don’t know what it is. I’m completely convinced they’re a good web developer but they don’t have a market position more differentiated than “I build websites”.
Price is a signal and they're diluting their brand with such low rates.
For a freelancer it would suck. I'd be a nervous wreck every time I found myself between clients. Which is why I'm not a freelancer. If I could get $100+/hour, I probably would be :)
$80/hr in SF = Lets assume 10/12 months billable (optimistic) the rest looking for clients or on vacation that gives you 80 * 8 * 5 * 4 * 10 = $128,000
28% federal income tax + 15.3% self employment tax + 7.25% California state income tax = 55.55% in tax.
After tax 128000 - (128000 * .5555) = $56,896 Average 1bd in SF: $3250 (https://www.rentjungle.com/average-rent-in-san-francisco-ren...) * 12 = $39,000 per year.
$56,896 - $39,000 = $17,896.
Cheapest health insurance for a year (http://www.ncsl.org/research/health/health-insurance-premium...): $6,000 or so
$17,896 - $6,000 = $11,896
$500/mo for food = $6,000/yr, $11,896 - $6,000 = $5,896 W/S/G + Electric = $50/mo, $600/yr, $5,896 - $600 = $5,296 Internet + Phone = $600/yr = $4,696
So yeah that's not actually a lot depending on your location. I am sure if you are a great developer living in Thailand than $80/hr makes you a baller.
Source: I work with Toptal.
My first year freelancing was my last (for now).
The only client I landed, following the guidelines stated on the link (cover letter, etc), was for a very niche job (IoT/FPGA related). I undersold myself as it was my very first gig on Website.
The client ended up hiring me and another guy from Country. They explained what they had, what they wanted, and I explained the problems with their architecture and possible solutions. The other guy was like, yes, all can be done, yes, great idea, sure, it's easy, yes, of course, nothing is wrong, it's so smart.
I was constantly dropping quotations from RFCs, IEEE, FCC and recommending hardware choices for backing it up with documentation, but they consistently followed the other guy's advice, to the point of deploying extravagant and unnecessary hardware: think of a workstation plugged to a Zynq, plugged to 3 Arduinos, and a Stratix 10 in the middle with a plethora of custom circuits and transceivers attached kind of mess, just because the guy only could find libs and IPs that ran precisely on those devices to do the puzzle that he himself sold to the client. I suspect this was not out of pure incompetence, but an evolutionary way to make one seem expert and make the project take longer to cash in more money.
And all of this was ON REMOTE. We literally had to ask the remote office to verify connections, and status LEDs on the devices, and obviously debugging out of business hours was an absolute PITA.
The other guy was insanely productive, in a meaningless kind of way. Everything was documented but badly, some stuff had CAD, some hand drawn; the designs had some corner cases well thought and commented, while basic things completely overlooked. Half of the code was copied from OpenCores, Arduino examples, etc, and the other half didn't make any sense. The only way I could describe him is as a bored engineer on the 5th day of a meth binge.
One day I just snapped during an argument, calling their project "Internet of Spaghetti", and called it quits. Then the client contested all the hours I filed, and Website took their side, I assume because they had high rating and I had just started.
Then I went back to corporate, it's boring but I don't have to deal with such bullshit.
what an image
Hindsight is 20/20, but I should have dropped it in that moment.
Engineers love to solve problems. They love it SO MUCH that they very often do it for free (see: opensource). You yourself said you 'underbid' the project. You were trying to solve a problem with logic, reason and an attempt to deliver a clean, well functioning, properly designed product.
Business do not care about those things. They care about 2 things:
1. Money 2. They want it to work
Your best defense against stupidity that has money is to collect money as often as possible. Get a deposit, stop working if they are late on payment, changes cost more, phone calls where I'm consulting to you costs money.
It's hard to hear, but the other guy kind of did it right. Save yourself a lifetime of lessons that I have learned (or stay in corporate) by simply treating every single client like you are running a business.
Be transparent about your unwavering focus on payment. You can do that and still be friendly by the way.
You (and I) think "I'll do an amazing job, this product will be clean, fast and standards compliant AND cheaper!"
And when you are done all they will say "does it work?"
The unclean truth is, customers don't care about well functioning, well designed code until NOT having it costs them money. See #1 above.
Of course you have the choice to not continue working with these types of clients, but, the truth is there's going to be some insanity in any business. Lessons are hard to learn and the best you can do is protect yourself and be honest, meaning, "This isn't the right way but it'll work and save you a few bucks, is that OK?"
The main problem is, with the way businesses are ran in the US, it's REALLY expensive being self employed. You pay a massive amount in taxes and you don't get any social security matching from an employer or health, dental, etc. benefits.
Basically, you need to make a LOT more pre-tax to come out to the point where you're living the same type of lifestyle as someone who has a full time position.
Yes, and if you avoid paying quarterly taxes or underpay by accident (because you made more than you thought you would have), you get hit with a huge penalty.
Also it's really brutal that certain things have no effect on your "small business tax" of about 13%.
For example, let's say you make 100k and you had 50k in medical bills for an emergency.
For most people, this is easy. About 90% of that can be written off your income tax. So you'll get taxed at 65k income instead of 100k.
If you run your own business, you'll get that same income tax write off (65k effective income), however you'll need to pay an extra 13% on 100k not 65k. You're on the hook for the full "small business tax" on your total income in this case.
It's complete bs because most medical emergencies (regardless of cost) are things that render you unable to work or do anything. Insurance doesn't even help either because there's a million loop holes to allow insurance companies to deny you coverage on certain things.
That being said going freelance means you can deduct all kinds of crazy stuff to bring down your income like your cell phone, internet, a portion of your housing costs for home office, electricity, meals & entertainment, computer hardware, car, etc.
You also get to setup an SEP IRA which lets you divert substantially more pre-tax cash into retirement than you could with IRA’s and 401k’s offered by a W2 shop.
One key thing to remember is W2 employers pay a bunch more payroll taxes “behind the scenes”. As a 1099 you get exposed to them directly. In addition you get exposed to state / municipal business taxes as well. Thus, you need to factor all that into your bill rate.
In the end, I think the taxes can work out much better for those self-employed. It just requires some planning and help from your accountant.
You do not get any of those write-offs if you work a corporate gig. If your income is the same in both cases, you will pay significantly less tax as a freelancer.
You can't write off food in most cases, and if you happen to work from home, you can write off some of your home office (based on square feet), assuming you have a separate work room from where you sleep.
For example, you can't just buy $300 / month in groceries and expect to be able to write all of that off because you happen to eat 3 meals during "work hours".
Sure if you goto a tech meetup once in a while and eat dinner out, you could write that off, but that's an outlier situation (at least for me).
Having your employer match a retirement fund + benefits + not having to pay both halves of social security is a lot more money saved than being able to write off buying a computer, cell phone or a couple of meals.
Obviously if you can get an employer match for retirement and good benefits that's true, that's a huge part of compensation that's not taxed.
Internet + phone is about $80 / month total. Even if you somehow managed to write off $100 / month in food (which I think is a stretch) that's still only $180 / month.
Compare that to paying for health insurance which is around $500 per month per adult for the worst coverage possible. Normally this is a freebie for being employed.
Then you get about a 7% increase in post-tax income just because your employer pays half of your social security. Then on top of that you might get matching up to a certain percent in a retirement fund. Then on top of that you might get other forms of insurance plus stock benefits. Then on top of that you might get free lunch every day too.
Long story short, writing off $150-200 / month in business expenses is not even in the same galaxy as not having to pay $500 per adult for health insurance plus an extra $7,000 in your pocket per year from going halfies on the social security (100k salary). That's already wildly better and it's not even taking into account for retirement matching perks, stocks, other insurances, free lunch every working day, etc..
So maybe that's the formula, work a corporate gig until you're a legend, and then become a consultant. :P
You just have to find the clients (the hard part). What has worked for me is making myself visible inside of my particular niche, then forming relationships with established freelancers so they send their overflow my way. Still in my first year, but this strategy seems to be working.
That's what consulting clients are paying for: an assurance that things will be done right and on a dependable timetable.
I also doubt that the advantage of being a native English speaker matters much if you cannot express yourself in a clear and concise manner, which has less to do with country of origin, and more to do with your grasp of the subject at hand and your ability to think straight.
To be clear: I didn't say that.
> I also doubt that the advantage of being a native English speaker matters much if you cannot express yourself in a clear and concise manner, which has less to do with country of origin, and more to do with your grasp of the subject at hand and your ability to think straight.
You need to both have a firm grasp of the subject matter and be able to speak a shared language fairly well. There are lots of companies where the overhead of dealing with somebody who doesn't speak English well and is in a vastly different timezone just doesn't make sense. I mean, when you're dealing with technical subjects, below a certain level of fluency, it's hard to even know if the other person understands the subtleties of what you're talking about.
Finding work was not difficult – I was lucky enough to book all of my capacity from day one. The biggest challenge I've had so far is managing my time across clients, and adjusting to not having a team.
I was fairly fortunate to bring by previous employer on as first client, the rest of the leads have come through my personal network. The nice thing about prioritising lifestyle over growth is I don't need many clients.
* Closing in on $250k revenue
* 2 major clients, 4 smaller, short-term engagements
* 100% utilization rate (no downtime between clients)
* Successfully raised rates with all client projects (avg: 19% / engagement)
* Closed via a sales funnel of: 5 new prospect outreach / day, 2 proposal follow-ups / day, 1 existing (or prior) client referral / month
What worked:
* Networking aggressively (see sales funnel)
* Setting up a 3-prong presence of blog + personal site + consulting site
* Pruning and refining available code/assets for portfolio
* Pricing / week & value-based, fixed-cost pricing
* 100% money-back guarantee (no one has asked for it)
* Having an accountant
What did not work:
* Thorough proposal / contract documentation. I figured having detailed, in-depth scope of work showing I had knowledge of their industry, problems, etc, would help close deals. The teams that closed the fastest already knew they wanted to work with me, but the ones that weren't sold couldn't even be sold with excellent SOWs and proposal documentation.
* Having a lawyer. For a one-man consulting shop, you really don't need one. Most standard SOW/Contract/IP documents are easy enough to generate/find yourself.
* Toptal / Upwork / any of those race-to-the-bottom sites. There's great arbitrage if you're international like OP. But I'm in the US, and it's not worth the effort for US rates.
* Meetups. I just didn't invest time in them (yet). I think the next leap in rates will come from becoming more "well known" through blogging and speaking engagements, which this is a key area to invest in.
* All this "double your rate" business. Sure, I imagine this works if you're used to pulling in $50/hr, and I imagine Brennan Dunn and the sort are marketing themselves at more commoditized development. But trust me, people ran away when I doubled my rates. I had to find a sweet spot and build up my rates slowly per client rather than just assume I was wildly undervalued.
Interesting, does that mean you raised rates during the project or as you switched to a new one?
Well done, that's a very impressive first year.
Great job, seems you're doing really well!
Also, it means quite a lot for you to say that you think I am doing well. I still feel like I haven't nailed positioning yet (any ideas: https://anonconsulting.com), and I'm always looking for feedback. Nonetheless, I'm still extremely grateful for the work you put out.
https://userinterfacing.com/author/acconrad
How did you find new prospects outside of upwork?
You also built one of my favorite unique sites (share latex).
I’m curious and have a few questions:
- how did you manage 5 prospects per day? That seems like an incredible amount of work that would break up my flow. Is this more like one day a week of hitting up 30 leads? Where did you find all of these prospects?
- why did you choose a 3 pronged approach of blog post, personal site AND consulting site? What’s the incremental value of the other two given one?
- can you describe, or give any links about value based fixed cost pricing?
Credit where credit is due: Henry and James built ShareLatex. I simply re-skinned it. They are the real heroes.
> how did you manage 5 prospects per day? That seems like an incredible amount of work that would break up my flow. Is this more like one day a week of hitting up 30 leads? Where did you find all of these prospects?
I aggressively sought opportunities. I recently posted about the collection of remote job sites I found [1], trust me, I was doing a lot of outreach and taking meetings. The advice I got from a dear friend was I should be networking at least 2 hours a day. I was doing that on top of the 8ish hours I was billing to clients.
> why did you choose a 3 pronged approach of blog post, personal site AND consulting site? What’s the incremental value of the other two given one?
Good question. I came to this conclusion after months of torturing myself over trying to master my personal brand. Here's why - your personal site serves to drive an audience of people who google your name. Those may not be the same kinds of people who are looking for consulting. Plus, if I every sold my consulting business or pivoted, it's not tied to my name. Same with my blog. Better to name your blog in relation to the vertical you are pursuing, rather than have it be yourname.com/blog. No one is googling the topics I'm interested hoping to read about my opinion. They just want an opinion/content from an authority. I write about front-end/development/UIs, so UserInterfacing as my blog is much more relevant than simply my name. Does that make sense?
> can you describe, or give any links about value based fixed cost pricing?
Guys like Brennan Dunn and Jonathan Stark are all about this. Check their stuff out, they're really much better at it than I am.
[1] https://userinterfacing.com/here-is-the-full-list-of-my-50-r...
> networking at least 2 hours a day. I was doing that on top of the 8ish hours I was billing to clients.
I have to say that sounds like a brutal schedule. On top of being a very smart guy, you seem like a very hard worker. I'm glad you've enjoyed so much success.
> ["3 prong approach explanation"]. Does that make sense?
Yes, thank you for this explanation. It is well reasoned and stated.
Do you have any resources like blog posts sharing more details on some of those strategies? I would be interested in reading about your experience.
* Read Million Dollar Consulting. There's a whole blueprint in there to turn yourself from an everyday freelancer to a pro consultant mindset.
* SimpleProgrammer was okay. Read it if you want, but it's a bit gimmicky.
* * * H U S T L E * * *
I cannot stress this enough. At the end of the day, the only reason I got here is because I do what everyone else is not willing to do. I work my ass off and I still don't feel like a success at all. I'm a charlatan and an unknown quantity. That desire to improve and work harder is the only thing that has gotten me to where I am. Everything else is just the cherry on top.
Disclaimer: I'm italian, working remote, strong focus on nodeJS and fintech, estimated revenue for 2018 (first year of freelancing full-time, not fully from Upwork): 360K$, working 220 days per year
$1500 a day sustained seems like an incredible rate in Europe.
You should not care about the rate, but the value of your work. In other words, it's about trading in value, not time