Ask HN: I'm a first time freelancer with some questions?

If you are concerned with the complexity, start out using a platform like oDesk which will take care of much of the payment and legal risk. Be sure to bill hourly not fixed amount.

I've written and signed many contracts, but ultimately for casual contracting it's most important to just find people you trust to work for/with.

Copyright - Maybe a lawyer can speak to this issue, but my understanding is that you own the copyright to any work you produce until you indicate otherwise. In the context of freelancing, that means that you should have a clause in your contracts that gives your client the copyright to the work once you're paid in full. No explicit transfer needs to be made and nothing needs to be filed (unlike trademarks and patents).

Value of time - You should value your time according to the value you can produce and what you will be happy with. This is tricky, and others have written a lot about this (and have said it better than I could) so search Google for "hn increase freelance rates" and you'll get enough material to keep you busy for a while. Just one warning to add: Don't undervalue yourself! It'll kill your motivation and put you in a vicious cycle of unproductivity. Chances are the lessons you learn here will be learned the hard way (speaking from experience).

Contract - Rather than thinking of this as a legally binding document, you should think of it as an outline of the process you're about to enter into with your client. Use it beforehand to make sure you're on the same page about your relationship, rather than afterwards to try to protect your ass. How/how much/when will you be paid? What are you expect to deliver, and when? How are you going to handle disagreements or unforeseen problems with your client? How much availability should the client expect of you, and vice versa (just as important!). The answer to all of these questions should minimize the risks to both parties and set you up for success. (https://news.ycombinator.com/item?id=8976924 is on the front page as I write this and should get you started).

I could write about this for days, but I'll stop there for now :). If you have any other questions though I'd be glad to answer as well as I can.

Smaller companies may have less savvy owners/managers who don't have an understanding of what you're doing, leading to scope creep (why can you "just" change this?) and miscommunication in time, quality (etc) expectations.

Set expectations clearly, especially ones that seem painful to bring up (especially time, budget constraints).

You are paid to know things and to find out how to learn things you do not know. You have to stay in constant training and re-learning. You are an expert in your field. Something you learned two or three years ago? You have to forget that and learn some other thing.

You have to own hardware and software. You have to buy health insurance. You have to save for a rainy day. You have to save for retirement. You want to go out to eat like normal people. You want to buy a house. You have to do billing. Not every client will pay. You have to hire an accountant. You have to pay taxes. You need to file papers with the county and form an LLC.

Are you going to work 8 hours a day 5 days a week? No, you will probably "work" 12 hours a day 7 days a week. Someone calls with work? Are you available? You have to get paid for being available.

Still think $40 an hour?

A few things I have learned (solo since about 1996 but spent the recession years 2007-2011 in a corporate job):

You are not a freelancer. Banish the word from your vocabulary. You are X. X being whatever it is you do/are. You are a company. You are a professional. That's just the work part. You are also a salesperson, a bookkeeper, a marketer, etc.

You will need some steady clients. Clients that call enough during the year(s) to provide some stability. You can't hustle for every single job. Relationships matter. How much stability you need, I can't say, but, ideally, you already have a jump-off client or two already.

You will have to do the numbers on your rate, but, I promise you, it is more than you think and more than you may be comfortable asking for, initially. Remember, your rate covers your availability, your expertise, your equipment, insurance, retirement, etc. If your salary is $75,000 that is not close to how much it really cost to put you in an office, with a computer, health insurance, matching 401k, etc. A company that hires the solo you is also paying for the flexibility to release you back to the wild at the end of a project without having had to hire you or fire you.

Value your time, your skills and yourself. You are a professional.

Really, however you and the folks you work with want to structure your work is how it is. There are things that are worse for you and things that are better for you, but it's a question of what you and your clients what more than anything.

As to the stability of contracts, they are only as good as the person signing them; generally if someone has given you money as a deposit, then there isn't a question about if the signature is binding, but rather what different parts of the contract might mean... the meaning of "functions in most browsers" or "has an easy to use method for adding XYZ" is really where you should be sweating.

That's typically the issue: usually the people I work with want things to be working well and done correctly, on a predictable schedule. Delaying delivery until payment is made is one strategy. A better strategy is to work with people and businesses you can trust... if you have a contract and there is no question about the quality of the work, generally enforcing a contract isn't something that requires lawyers.

The facts about negotiation apply to your rate: if your client will pay you $500/hr, then that is what your time is worth. Instead of worrying about what it is worth, worry about what you have to make in order to do the things you need to do (or, if you prefer, what your rate needs to be so you don't have to go get a job).

Generally, clients (end users, not, for instance, agencies) don't like hourly pricing for the same reason that I like it: it transfers the liability for additional changes or unforeseen troubles with the agreement.

So you might find that you're better off with fixed pricing, which involves knowing what your hourly rate needs to be and how many hours you expect will take to do the work, plus the cost of acquiring the client, plus a hedge for unforeseen work that will need to be done without issuing a change order. Multiply that time three, and then you'll probably not get too screwed by a contract :D

It actually may be more accurate to look at total comp: $50k a year + $12k in health benefits + $3k in equip + $4k in vacation + $1k in retirement benefits ~= $70/hr.

Under-pricing my work cost me a lot during my freelancing days, so I'll comment on that directly here.

The best advice I got was from my uncle who worked in the tech industry in the 80's, which is to take your normal hourly rate and multiply it by 3. Or, take what you would be making full time, pro-rate it, and do the same.

This might sound high, but the easiest way to think about it is as follows:

- The first 1x is for your normal salary, as if you had a full time job. You are producing a product, or your time costs money, and this is the price.

- The second 2x is for "backoffice" or "cost of doing business" expenses. This is everything from accountants to lawyers, gasoline for trips, software licenses, hardware costs, office rent, etc. This stuff adds up and you should remember to account for it.

- The third 3x is for profit. You're running a business, you're shouldering risk, and should profit from that risk. Also more practically, there will be boom times and bust times, and you need to weather the bust times with float.

All of the above is to say: If you are negotiating a price, especially if you are not used to negotiating prices, think of the highest price you can say with a straight face. It's often more right than you think.

As a final note, having been in a position of hiring freelancers in the past, don't forget that the value you put on money it often completely different than the client who hires you. For you, that money is your dinner. For a company, your cost is nothing if it gets them another advantage, such as a key BD contract or a stronger foothold in a 20m market. I believe the negotiating term is "trading things of unequal value".

http://jacquesmattheij.com/the-army-of-the-new-independents

Best of luck!

The reason this works well is because it benefits everyone. It benefits you because you know what you are going to make, you don't have to worry about the client saying "oh can we make this one change it will just be an extra hour right?".

They benefit because they know the cost upfront and don't have to worry about overruns, and they know exactly what they are getting from the detailed spec that is required to make this work.

Contract: The most important points in the contract are naming stepstones, milestones, budget, payment at each milestone, payment terms. An agreement is only good, as long as you agree. It often becomes toilet paper if disputed, especially as lawsuits might be more expensive then the value of the contract, and as contracts are difficult to enforce over international borders for a freelancer. So there is no need to pay a lawyer to create a legal bullet proof contract, as you can not enforce it anyway. Better write one that a human understand. Thats not more complicated then selling your car. One of my "tricks" is to offer 2% discount, if payment is within 7 days after invoice. Any customer who can count money, and has no big cashflow problem will pay instant. Drop those who are late payers. They are often problem customers in other terms also.

Time vs money, 1st: The curse of any coder are infinite ideas vs. limited lifetime to execute them. Applying the law of diminishing returns on this, and new ideas receive a negative value. The same sooner or later shadows over the value of money, as people start to throw more money at you to solve their problems, then you ever need.

Time vs money, 2nd: I advise against selling time for money at all. Time for money does not scale, as you have only a limited lifetime, but there is unlimited money around. Selling time for money is typical for employed workers, but a professional should sell solutions for money.

Picking customers: Often customers pick you. You are lucky, you got your first client. Do a good job, and he will tell others. At first you will likely take any job that comes. But take care, that there are problem customers, who will leach your time, never pay the full amount, and claim they want more work for the money you agreed. Drop them, to concentrate on good customers.

Pick the good customers and convince them to sign a maintenance contract. I'm old and saturated now, have a semi passive income from maintenance contracts, and I'm dropping more then 80% of potential customers, often just because of a gut feeling during the first talks, before signing any paper. Signing a NDA is often the end of the talk, as ideas have a negative value for me.

Build a portfolio of skills where you are better then the average, as you already know the tools or the topic. You can offer fixed prices once you have this tools, skills, and knowledge. Fixed prices to solve problem will make much more money then selling time for money, as the value of the problem is much higher then the value of a contractor. There are basically two types of problems: Problems where you reduce the running cost of something, and problems where you increase sales. Estimate how much a solution is worth within a year, and ask for a good fraction of this for the prototype, and a smaller fraction for the maintenance contract.

In practice it's simple - if you're paid to build a thing for someone, that someone owns the thing. It's known as a "work for hire". That's what your customer will expect, anyway. I mean, would you pay someone to build a thing for you and think didn't own the copyright on the thing?

how can I make it so the contract would hold up in a court, if, for example, they refused me payment?

You know what's better than a contract? Getting paid in advance. Whether it's 10%, 30%, 50% or 100%. You should work your ass off for your customers. But if they haven't paid you, they aren't really a customer, are they?

If you didn't get any upfront payment, ask for something once you have any deliverable to show. Show proof of work and a reasonable client should be willing to send money your way. Worried about getting paid? Establish that they will pay as soon as possible.

Also, a contract that holds up in court and results in a judgement in your favor is no guarantee of payment. A judgement means you can send a debt to collections. But the collections agency will extract a hefty fee and it may take months or years to collect.

It seems like you're focusing on what can go wrong. Ignore that stuff. Focus on building trust and rapport with your clients.

How should I value my time?

Is my time worth $20 an hour? $40? Less? More?

Abandon the concept of time. Think instead of services. What services are you providing? What are these services worth to your customer? Approach this from their point of view, find out what they're willing to pay, not the minimum you're willing to charge.

Start out high. Charge a rate that seems too high. If the customer says "no" find out why. It may not be the price, but some other concern. If the price is too high tell them you're open to negotiate, ask for them for a counter-offer.