Didn't expect this note at the end, but what a good move:<p>> Give back to the tools that make you successful - I give a percentage of my earnings every year to support software tools that help me do my job - iTerm2, Vim, Go, Postgres, Node.js, Python, nginx, various other open source projects.
Tip to save on lawyer:<p>Read contract yourself then get back to company and request to either remove all one-sided clauses or make them equally two-sided.<p>Also - add clause stating that unless you paid in full and on time - all IP belongs to you.<p>Most contracts try to pull the blanket one way.<p>Once done, <i>then</i> call your lawyer with resulted paper.<p>Much less work for your lawyer to do.
> Don't charge by the hour<p>This is bad advice.<p>Charging for a full week will make you lose a lot of clients. In the case of software development: The client never knows the full spec of the project and you'll have weeks were 10 hours is enough. Charging for those extra 30 hours is terrible deal for your client and he won't take it.<p>What you should be careful about is how much you charge per hour. You may set different rates based on context like: for a full time project project you charge X, for future maintaining (which is on demand ) you charge 1.5 times X.<p>Hourly also protects you agains scope creeping.
Charging by the week/project/milestones requires a near full specification and it's done at an agency level where you've a team. I've been working hourly and I love it. You can try to spec out any project as much as you can, in the end you can't predict scope changes and/or unexpected problems: API is broken, missed an important email, build system is failing for no obvious reason, server went down, etc, etc.<p>You have to figure out when charging by the hour/week/month/milestones is reasonable. Just because someone is making 120K a year in San Fran, doesn't mean you've to make the same amount while freelancing. It heavily swings from client to client.
Something else if you're a freelance developer:
In order to command a higher rate and not just be hired as a code monkey to implement a predefined task, it helps to position yourself as a consultant who can help the client discover the best solutions to achieve their goals.<p>Example: instead of just agreeing to develop a client's website per their initial specs, in your discovery call, find out what their goals for the website are.<p>Let's say they want to use it to capture pre-orders for an upcoming product. Based on this, you can propose a few ROI-positive solutions like integrating payments with their email marketing platform to engage customers and bring back cart abandoners, hosting a viral share giveaway, etc.
Author, if you read this, skip Ally for business accounts. They do not allow them and may freeze your account and hold your funds when they realize you're using it for business.<p>Their great for personal accounts.
> Make Sure Contracts Are Signed With the Company - The contracts you sign should be between the client you are working with and your company NOT between the client and you personally. Discuss this with your lawyer.<p>So simple, yet so many people fail to do so. They believe that since they are incorporated they are protected.
Get a lawyer, review contracts, hire an accountant, register as a company...is this really better than working a regular 9-5?<p>Sounds like the OP spends just as much time (if not more) doing paperwork, meetings, phone calls and other assorted meta-work as programmers in Big Tech Co, if not more.<p>Corporate America can be a drag, I get it. Annual reviews, backstabbing office politics, the wrong people get promoted, loud open offices full of clowns that prevent you from concentrating but from this write-up it doesn't sound like going solo is any hassle-free Shangrila, either.<p>For a certain class of people they like the "freedom" and hey, more power to you. By all means, enjoy the IC life. But I'd just as soon move to a different company if I'm unhappy at my job and not deal with this Kafkaesque amount of paperwork of being an independent consultant.
This is great. Also interesting would be a similar guide on scaling from a one-person operation to a proper consultancy.<p>Personally I'm jealous of those who manage to found their own creative consultancies. Especially ones that mix design/VFX/videography/software talent, that focus primarily on things like interactive experiences or commercials.<p>For example, the Windows 10 default background.[0]<p>There's numerous other equally neat examples, but the gist of it is that they get to think up cool stuff and then sell that to their clients, who are usually massive brands that can afford to pay big money.<p>Getting one of those off the ground is probably exceedingly difficult barring deep industry experience and the connections to match, and even then I'm sure it's hard.<p>[0] <a href="https://www.youtube.com/watch?v=hL8BBOwupcI" rel="nofollow">https://www.youtube.com/watch?v=hL8BBOwupcI</a>
Sourcegraph CEO here. Kevin Burke (the author) worked with us at Sourcegraph for some important projects in late 2018 (including helping to prepare a big product release). It was a joy working with him. I’ve worked with a lot of contractors and would love it if more people followed these guidelines.
I'm in the same boat, with a pure technical background, I managed to tripled my salary in 2 years, the job has become much more interesting and without all the political noise. The hardest bit so far is the sales / pricing strategy. For example, my biggest problematic this month is to figured out how much is it realistic to charge a F500 to support & maintain a custom build solution we've created: 5k/month, 10k/month, 15k/month (was sounding totally crazy to me until some people told me their company charge that kind of money for support)
I totally agree with Kevin where he says:<p>"""
I started out charging a monthly rate that was close to my full time salary / 12. This is not a good idea because you have overhead that your employer is no longer covering - health care probably the biggest one, you don't have paid vacations, there may be unpaid downtime between contracts and also companies might not pay you.
"""<p>When I started working remote 5 years back, I was just out of college and didn't care about those things...
I feel like this is standard stuff, especially coming from the UK and the huge amount of contracting in that market. The real hard parts of independent contracting (how much exact are market rates/how do I find & land leads for contracts without an existing contact at the client) don’t seem to be addressed.
I feel like going freelance/consulting is such as "figure it out on your own" ordeal even though there are so many people who do it. Seems like there's opportunity to help people who want to go freelance transition more easily.<p>I think a good analogy is hair salons that sell a seat you can rent as a hairdresser...are there places where you can "pay" for leads/intros to clients as part of a larger remote software consultancy?
It's an additional expense but I would add obtaining business liability insurance to the list. It's not generally too expensive but can save you a bundle in legal fees that you can't recoup even if you prevail in lawsuit. Additionally, while a corporate structure should shield you from personal liability, there's no guarantee that whoever is suing won't try and pierce the corporate veil to get to the corporate principals - hence the benefit of insurance.
This is so helpful- thanks for sharing! Also your own website is such a great example of taking selling yourself as a consultant seriously. Congrats on all the success here!
The biggest impediment for me would be finding clients. IME most programmers dont meet a lot plant potential clients when they are maintaining internal software. Even if they work for a consulting company, you can't use them due to restraint of trade clauses.<p>So how would you get the first customers? I'm just some guy off the street, no one is going bet money on me performing a function for their business.
One issue I see is that GitHub ToS prohibit a single natural person from owning multiple GitHub free accounts, so you would have to pay for each one which could get quite expensive. Of course, larger business will have their own GitHub Enterprise or self-hosted Bitbucket/GitLab/etc that they can make you an account on.
Great read, thanks Kevin.<p>I blogged about this as well recently, might have one or two interesting points for you:
<a href="https://blog.classycode.com/going-freelance-as-a-software-engineer-some-advice-13c4064c72ce" rel="nofollow">https://blog.classycode.com/going-freelance-as-a-software-en...</a>
Problem is, as a student I am trying to go freelance and start getting clients by doing small projects. And I read articles like this one and I have so many questions. I cannot pay for a lawyer or an accountant yet most of the people recommend it, am I not going to be able to go solo if I don't have those kind of securities?
Dear Author, thanks for the write-up. Regarding "Market yourself"... You mention websites and so forth. Is most of your marketing online or most of it in networking events?<p>How do you deal with recruiters and LinkedIn recruiters - have you found a way around these?
Sort of on the same path right now.
Biggest obstacle I'm running into is that most of the work I'm finding is through recruiters, which of course means that a chunk of the money goes to the recruiter before I receive it.<p>The rates are still decent, but I'm not working with enough of a financial buffer to compensate for the downtime I'm having. I'm brand new at this though and I expected this sort of difficulty curve to start out with.<p>On a side note, if you've got an Angular or react project you are working on in the Atlanta area or remote and need some help, reach out to me :)<p>All of my contact info is on my site elarbee.io
> Try to get as much of the contract as you can paid up front - I generally ask for half or more up front. If a company offers Net 30 ask if you can shorten it to Net 5 or 10 or submit your invoices in advance.<p>Anyone can suggest some good reading material on how to structure payment tranches? Do people charge a retainer? If so what percentage? when the work starts is it “pay as you go” or after completion? Does Net D apply to work start or completion?
Great writeup Kevin. As a IC, I can relate some of these points with my experiences.<p>You should charge more to compensate for Medical Insurance, Non billable hours (Gap time), Marketing cost etc.<p>Setup a Company (LLC or S-Corp) for doing paper work and contract (buy a minimum liability insurance). This will protect individual from litigations or lawsuit.<p>Payment - Can't stress enough. I try to negotiate Net-15 or Net-30 days payment. So far it worked with all the clients.
This is really impressive! I'm especially impressed by the landing page for his consulting site: <a href="https://burke.services" rel="nofollow">https://burke.services</a>
This is so much better than just listing some of the technologies you've worked with. It's really great to talk about the problems you've solved, and have some customer testimonials (especially from big names.)<p>I've been doing almost the complete opposite for the last ~4 years. I always charge by the hour, and I use a time tracking tool that tracks every minute. I never ask anyone to pay up-front. I've used services like Toptal and Moonlight that handle all of the billing for me. I've never talked to a lawyer or an accountant. I haven't registered a company specifically for my freelancing, but I've started doing everything through my startup's company. (My startup now offers a SaaS product plus consulting services.) I live in Thailand and have a work permit through Iglu [1], so they handle all of my invoicing and taxes. I also don't have insurance. I don't set up separate GitHub accounts for everything, and I don't really see the need for that. But I do usually work for one client at a time, and I find context-switching very difficult.<p>I think the main reason I haven't taken my consulting work super seriously is because I don't really want this to be my career. I've always treated it like a part-time thing to just pay the bills while I work on my own startups.<p>No offense to people who take this seriously, but consulting has always felt like a bit of a dead end. You can make a great living, but I get really depressed when I enumerate all of the hours I would need to work. A salaried position is nice because it hides these details. You come to work in the morning, go home in the evening, and then your paycheck is transferred to your bank account. You don't have the option to stop working at any time, so you never really have to think about it.<p>When you're a freelancer who wants to do this as a career, you suddenly have to convert your retirement goal into a fixed number of hours. Say you want to save and invest $2 million before you stop working, and you earn something like $200 per hour. You're able to save 50% of your income. You have to work at least: ($2000000 / 200) * 2 = 20,000 hours.<p>That's 2,500 full days of work. Maybe you are able to book 80% of your time, and you only work 5 days a week, so each year you can work: (52 * 5) * 0.8 = 208 days. It will take you 2500 / 208 = ~12 years of almost full-time work before you can safely retire with $70k of investment income. Maybe more like ~9 years to account for investment returns.<p>I think I'd rather join a few early-stage startups and get some significant stock options. It's much more fun to be part of a team member and have a vested interest. It will still take an average of 10 years before most startups have an exit. But you can leave after a few years and work for a few different startups to diversify (or start your own.)<p>Having said all of that, I'm really impressed by <a href="https://burke.services" rel="nofollow">https://burke.services</a> and would love to hire him to work on my startup in the future.<p>[1] <a href="https://iglu.net/" rel="nofollow">https://iglu.net/</a>
Is self employment on its own a worthy goal? I think it makes sense if it enable or finances entrepreneurship. Building an enterprise, disrupting existing business models, and adding value at scale is much more interesting problem.