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Ask HN: What mistakes did you make when starting as a consultant/freelancer?

622 pointsby _qjt0over 5 years ago
What was the specific mistake, what did you learn from it, and how did you change the way you do business as a result?<p>For example, I was told by someone who started a project without taking an advance, only for the client to decide not to pay. So he now refuses to take on a project without at least 30% advance.<p>What lessons did you learn the hard way?<p>I&#x27;m setting up my own consulting practice: kartick.org and would like to learn from other people&#x27;s mistakes rather than repeating them myself.

77 comments

gk1over 5 years ago
Longer write-up here: <a href="https:&#x2F;&#x2F;www.gkogan.co&#x2F;blog&#x2F;how-i-learned-to-get-consulting-leads&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.gkogan.co&#x2F;blog&#x2F;how-i-learned-to-get-consulting-l...</a><p>Some things I learned through mistakes:<p>- Charge more.<p>- Travel like a professional and bill the client. For my first business trip I used airline points, stayed at an Airbnb on my own dime, and even refused the client&#x27;s offer to reimburse me. Stupid. (Full story here: <a href="https:&#x2F;&#x2F;www.gkogan.co&#x2F;blog&#x2F;stupid&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.gkogan.co&#x2F;blog&#x2F;stupid&#x2F;</a>)<p>- If I&#x27;m not enjoying the work, request a change or move on. Don&#x27;t just &quot;tolerate&quot; it and chug along. One of the greatest benefits of consulting is the freedom to chose whom you work with... Take advantage of it.<p>- Remember who the client is, and don&#x27;t get too involved with their subordinates.<p>- If you don&#x27;t feel &quot;Hell yes!&quot; about taking on a project or prospect, just skip it. It&#x27;s not going to get more interesting over time.<p>- Find a great accountant. Fire bad accountants fast (and lawyers, and other service providers).<p>- Tell the client the hard truth.<p>- Impostor syndrome is normal. Get over it.<p>- Stop trying to go above-and-beyond all the time. Do what you were brought in to do, and do it exceptionally well. If other opportunities come up, suggest them as follow-on projects instead of just doing extra stuff for free.<p>- If you&#x27;re clashing with an exec at the company, tell the client, instead of just backing away from the project.<p>- There are hundreds&#x2F;thousands (depending on specialty) of potential clients out there, you just have to find them. So don&#x27;t worry if a deal falls through, don&#x27;t envy other consultants, and don&#x27;t take on bad projects out of desperation.
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im_down_w_otpover 5 years ago
Setting my rates too low.<p>Here&#x27;s what I figured out those many years ago. Clients who are cheap are also really into wasting your time and trying to micromanage the project. Clients who will pay a lot more also give you latitude to do your job (after all they&#x27;re paying you to be the expert).<p>Keep jacking up your rates with each new client until you hit a ceiling. Whatever you&#x27;re charging now, without even knowing what it is, I&#x27;m certain it&#x27;s too low.<p>When I got started I billed $35&#x2F;he. When I ended 5-6 years later I billed $300&#x2F;her. Now in what very limited ad-hoc consulting I do, I bill significantly more than that.
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super-serialover 5 years ago
I tried freelance and realized I hate it more than any other type of programming work.<p>I can tolerate being an employee where I do what I&#x27;m told. After a month I get a feel for the environment so it becomes low stress and then I can keep my head down programming. Or I can tolerate selling software or having a SaaS. If I&#x27;m CEO I decide the direction of the product and then just have to handle customer support.<p>But the BS and stress of dealing with clients, contracts, undefined specs and getting paid... I have no f-ing idea how people tolerate it. So good luck with that. It took me way too long to figure out that I absolutely hate working as a contractor.
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epcover 5 years ago
Didn&#x27;t charge enough.<p>Didn&#x27;t market. Didn&#x27;t network.<p>Didn&#x27;t constantly hustle for clients.<p>Didn&#x27;t outsource scut work.<p>Didn&#x27;t down tools when clients were slow to pay.<p>Didn&#x27;t develop&#x2F;maintain a backlog of client work.<p>Didn&#x27;t reject fixed price contracts.<p>Didn&#x27;t renegotiate when projects changed beyond contracted scope.<p>Didn&#x27;t filter free consults against probability they&#x27;d turn into a contract.<p>Didn&#x27;t have my heart in it (and have since stopped).
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mattferdererover 5 years ago
Hire a good tax person immediately. Maybe hire 2.<p>A significant amount of your income earned is gained through having someone walk you through handling taxes &amp; health insurance. I&#x27;m not suggesting cheating on taxes. There are common practices such as knowing how to best incorporate your business for your situation. How to best pay yourself (dividends vs income) &amp; how to handle your personal &amp; company expenses. This can easily make a difference of between 20-30% of your income.<p>By a good person, I mean someone willing to sit with you for over an hour &amp; understand you family situation, what expenses you have &amp; what expenses you plan to have as a business. Someone who will also sit down with you once or twice a year &amp; re-discuss as well.
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sigmaprimusover 5 years ago
My biggest mistake working as a freelance consultant and truth be told still one of my biggest weaknesses is under estimating the the amount of work a job will require. I now tell myself any time I plan a project, whether for myself or someone else to double my estimate of the work required.<p>Many times it wouldn&#x27;t even be my underestimating but rather the clients changing their plans halfway through and I would end up losing out rather than risking having them give me a bad review.<p>It is always better to estimate high then charge less than the other way around.<p>If you don&#x27;t get a job because your too expensive don&#x27;t be too upset, don&#x27;t sell yourself short. IMHO it&#x27;s better to not get the job than to work your fingers to the bone, miss out on other jobs and get burnt out only to go broke in the end.
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rwmjover 5 years ago
I thought &quot;I&#x27;m a great programmer so I&#x27;ll be a great programmer-consultant&quot;. In fact they are two separate sets of skills, and if you don&#x27;t have the soft skills around consultancy like networking for clients, dealing with payments, and smoothing things over when they occasionally go wrong, you&#x27;ll need to acquire those skills.<p>Also get a good accountant. There are lots of terrible accountants. Literally I had one who forgot to file my tax return - <i>you had one job!</i> - and I ended up paying a huge fine for his incompetence then trying to sue him to get it back.
nlhover 5 years ago
Everyone’s talked about charging more but let me add a vote specifically for dealing with credit risk - it’s real.<p>I worked with a lovely but cash-strapped startup who really needed my help, and I made absolutely certain to collect payment up front as a condition to working with them. I billed on the 1st of the month for the upcoming month and it took away all stress around (their) cash flow.<p>It ended up being a really fun engagement that lasted 6 months, and when they told me they were really tight on cash and had to stop the engagement in 2 weeks, it was zero stress on my part (because they’d already paid for those two weeks).<p>Chasing a client for money is one of the worst aspects of consulting and I’ve just decided not to let it happen again. I’ve been on both sides — the consultant trying to get paid, and (unfortunately) the client who didn’t have enough cash, and it’s agony for everyone involved.
dceddiaover 5 years ago
Just a few hours ago I saw this post on Product Hunt: &quot;Freelancember is a collection of 31 gifts for freelancers, one for each day. Templates, checklists, guides how to get better clients, raise your rates, etc.&quot; Might be helpful! <a href="https:&#x2F;&#x2F;www.producthunt.com&#x2F;posts&#x2F;freelancember" rel="nofollow">https:&#x2F;&#x2F;www.producthunt.com&#x2F;posts&#x2F;freelancember</a><p>Some other folks mentioned taxes -- I highly suggest reading the book Profit First and implementing the system. I&#x27;m not a freelancer myself, but I&#x27;m solo &amp; self-employed, and it&#x27;s such a relief to have a pre-destined pile of cash to be sent off to the appropriate authorities each quarter.
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daxfohlover 5 years ago
Staying too deep in tech.<p>As a consultant your number one thing is making money. Find high paying clients, establish good relationships, do good work but don&#x27;t get too far in the weeds of tech stuff. From everything I&#x27;ve read and experienced, deep technical work doesn&#x27;t pay well or market well. Dumb stuff like setting up Magento is where the big money comes. People who are mainly technical seem to do better at companies. There are of course exceptions.<p>My business did not succeed. I still enjoyed the three years I spent on it. I got to work with lots of different things that I would never have had much chance to do otherwise, and get paid for it. I ended up going back into industry though once my primary client had to pull back my hours, and so far am happy enough with that decision too.
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fyfy18over 5 years ago
Not when I started, but after I&#x27;d been contracting for five years I ended up in a contract where the client ran out of money so couldn&#x27;t pay me. I figured that because I was hired through a recruitment agency I was safe, but apparently not.<p>For those who aren&#x27;t aware &#x27;contracting&#x27; in Europe refers to what is effectively a short term employee who charges X&#x2F;day. Clients usually pay net 30 - 60 and often you work through a recruitment agency. The agency is supposed to vet the employer and provide a good source of candidates, but for the fees they charge clients (10-30%) IMO they don&#x27;t provide anything near that value.<p>This led to mistake after mistake on my part and now the client owes me £40k. I ended up working with a soliticor, and we have now agreed on terms for then to repay me, but I ended up with a pretty bad deal (it&#x27;s effectively an interest free loan to them).<p>I&#x27;ve learnt quite a lot of lessons though:<p>- Under no circumstances work for free, if a client asks you to, it simply means they do not value your time. There&#x27;s plenty of businesses who are willing to pay you so it&#x27;s not worth the hassle. The only exception I&#x27;d say is if you are getting founder level equity (10s of %) in a startup you believe in.<p>- I had a bad feeling about this contract from my first week when I got in the office, guess I should have listened to my gut feeling :-)<p>- If a client is putting a lot of stress or pressure on you, fire them. There&#x27;s plenty of good clients out there.<p>- Do not ever work for free <a href="https:&#x2F;&#x2F;youtu.be&#x2F;jVkLVRt6c1U" rel="nofollow">https:&#x2F;&#x2F;youtu.be&#x2F;jVkLVRt6c1U</a>
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amyhoyover 5 years ago
Over a decade, I went from doing grunt work freelancing — data entry, HTML conversion, etc — to charging about $500 an hour as a true consultant.<p>Freelancers do what they&#x27;re told. Consultants advise the client on what <i>they</i> should do.<p>When you start out, it&#x27;s natural to think you&#x27;re Doing A Thing (whatever skill you have &amp; want to charge for) rather than Running A Business. I started out thinking &quot;I&#x27;m here to make web pages and get paid for it!&quot; and that made it very easy for people to take advantage of me. I would do exactly what the client asked for and then they would complain about it.<p>By the end of my consulting career, VPs would come to me with their ideas and I&#x27;d feel free to say &quot;I&#x27;d love to work with you, but that idea won&#x27;t fly. Here&#x27;s what you SHOULD do.&quot; And they would go with it!<p>I realized that I could have positioned myself as the expert much earlier on in my career, and saved myself a lot of stress of trying to do every little thing the client asked, no matter how foolish.<p>The business mindset also means service agreements with initial deposits, work schedule with intermediate payments, kill fees and more.<p>I now run a product biz — the star being a time tracking SaaS for freelancers <a href="http:&#x2F;&#x2F;nokotime.com" rel="nofollow">http:&#x2F;&#x2F;nokotime.com</a><p>Turning my catch-as-catch-can freelance business into a real consultancy is what made me able to charge more, work fewer hours, and have less stressful projects (bc I was the actual boss rather than a tool to be used by the client) and build the SaaS on the side.<p>Someone else mentioned Freelancember. Guess who made it? Me! Based on all my mistakes and years coaching others to level up like I did. <a href="http:&#x2F;&#x2F;freelancember.com" rel="nofollow">http:&#x2F;&#x2F;freelancember.com</a><p>I highly recommend the book The Secrets of Consulting, which is like &quot;the inner game&quot; rather than explicit stuff like contracts, taxes, etc which are covered elsewhere.
harrisonjacksonover 5 years ago
Don&#x27;t charge per project - charge for your time. The only exception I&#x27;d make on this rule is sweat equity and that&#x27;s because I&#x27;m well aware of the gamble I am making with my time. Still charge a token amount of actual $$ for sweat equity unless you are a co-founder.<p>Do not overengineer anything.<p>Charge for your time - 3.6x what you are currently charging ¯\_(ツ)_&#x2F;¯ no idea what that is. Don&#x27;t work for clients that blink at that price at all.<p>Take the high road in every possible situation and never burn a bridge - your life blood will be repeat business and referrals. Your community and network are tighter than you realize.<p>At least 20% of your time will be networking, sales, and meetings - buffer your estimates an extra 30% with that in mind plus whatever other buffers you already told yourself you&#x27;d do.<p>Be over enthusiastic, be your own hype person and the hype person of the project you are working on, still under promise and over deliver though.
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mkbknover 5 years ago
Many (still do some) -<p>- Not booking myself in advance. - Taking rush jobs. - Not limit myself to a set no. of hours - Absolutely no systems in place other than a Calendly meeting link that I set up very recently. - Not able to estimate the time I need to complete a task. - Not producing enough content so that I could get pre-sold, inbound leads.<p>e.g. I&#x27;m a direct response email copywriter and I&#x27;ve been told by many gurus &amp; coaches to write emails on a daily basis and publish on the web. Yet, I&#x27;ve been slacking off.<p>Result? I&#x27;ve to reach out to prospects and try to sell them on myself. Not an easy thing to do.
daxfohlover 5 years ago
Got too attached to my project.<p>Your project isn&#x27;t yours, it&#x27;s your client&#x27;s. I turned down better paying work because I had become so invested in the code. I was afraid to ask for a raise for the same reason. Finally my client stopped needing more features and that was that.<p>Your code is just a means to an end. Don&#x27;t get attached to it or to a client. You are running a business. Keep good relationships, but be ready and able to cut ties.
dfsegoatover 5 years ago
Embarrassing but honest:<p>Pay your taxes on time (quarterly), assuming you are US based and on a 1099. Put that money away as soon as possible with ea. payment - just like an employer were withholding it.<p>I managed my finances poorly, and it gets increasingly difficult to catch up. All good now but was the most expensive lesson I learned.<p>Edit: seeing other replies here, I would meet with a tax&#x2F;financial person from the start.
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carapaceover 5 years ago
Never work for free.<p>I had a guy contact me and con me into developing a feature for him and then disappear.<p>The other way to put this is, get paid upfront. Estimate your price, triple it, then demand 1&#x2F;3 upfront before you start to code. That way if the client flakes out on the rest you&#x27;re at least covered. (Heh... I wrote this from just the headline, before reading the blurb. Your friend who &quot;refuses to take on a project without at least 30% advance&quot; is spot on.)<p>Which brings me to the next gem: Charge more. The A-#1 mistake most people in every business make is to charge too little. (Flip it over: don&#x27;t compete on price. Not as a freelancer&#x2F;consultant.)<p>What else? Don&#x27;t work for liars or incompetents.<p>Also, just because a client has money and is willing to give it to you doesn&#x27;t mean that you should take it.<p>Sometimes the right thing to do is sit Gil down and tell him: your project is the Winchester Mystery House and I have better things to do with my time.<p>(Ah, Gil... what a client. He would come in to discuss the project, and we&#x27;d say, &quot;Well, there&#x27;s A, B, or C?&quot; and he would say, &quot;What about D? And E? Could it also F and G?&quot; and the PM would smile and say, &quot;Sure Gil! We can do all that!&quot;. It was the only project I ever worked on that had 100% code coverage. No, really, 100%. Every line. Every single line. Because Gil wanted it. :-)<p>So yeah, charge more, and brook no bullshit. It helps if you&#x27;re good at what you do, or at least dedicated.
fierarulover 5 years ago
The common rule around here is to charge more. This is also promoted a lot by patio11 on HN and on Twitter.<p>I would counter this with the fact that sometimes it could backfire. Just like in a job negotiation, a contract negotiation might end up with no contract at all.<p>So while it&#x27;s nice to hear about this, applying it in practice generally works for new customers while the original&#x2F;current customers are paying your bills at the normal rate. Trying this with your current customers might lead to no customers.<p>There are a lot of glass ceilings out there and mental blocks on both sides of the negotiating table. Even a deal that works for everybody might not happen because people are not entirely rational when talking about money.
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tyingqover 5 years ago
Have a rate card that encourages clients to pay on shorter net terms, and to pay on time.<p>Structure it as a discount instead of a penalty, but have the fully discounted rate be the figure you wanted in the first place.<p>Helps in initial negotiations if they want long net terms. You can just say, &quot;sure...here&#x27;s the rate for NET 45&quot;.<p>And, helps with slow payers.<p>So, in month 2, if they have paid on time for month 1, present an invoice with the discount applied. If they are late, then don&#x27;t apply it.
chxover 5 years ago
Don&#x27;t be afraid to say no if a client looks shitty.<p>Don&#x27;t say no to a good client. Quote them an atrociously high price instead. What&#x27;s the worst that can happen? They pay it.
antoinevgover 5 years ago
1. Not making it clear to the client up front that I&#x27;m charging for the week whether they have enrolled me in their IT systems or not!<p>2. Not making it clear to the client up front that if they wanted me to do the work the following week I&#x27;ve also have to charge them extra for having to reshuffle my schedule.<p>With big companies this stuff is very hard to fix after the fact, it has to be part of the initial negotiation.
gesmanover 5 years ago
Here&#x27;re mistakes I <i>didn&#x27;t make</i>:<p>- Insisted on payment once contract is done and ignore &quot;could you also do that and then i&#x27;ll pay you for everything together.<p>- Did not race to the bottom with developers from poor countries.<p>- Did not take startup stock&#x2F;shares&#x2F;options to sacrifise salary.<p>- Realized that 5% of customers are responsible for 95% of revenues and prioritize attention to their requirements accordingly.
sas1ni69over 5 years ago
Not billing often enough. Send a bill every 2 weeks. If they miss one, stop working. No negotiations.
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danielovichdkover 5 years ago
The problem with consulting as a developer is that you can&#x27;t charge as much as it costs to fix shit properly. Endless fucking story. Developers are mostly crap which treat their work as any other working man.<p>You are there on the floor with these men, lowest in the hierachy, selling your time which you can&#x27;t scale.<p>You can&#x27;t set a price on your time, it&#x27;s something you will never get back, but if you absolutly must sell it, sell it expensively and to people you values your time.<p>Fuck doing work with lousy people and companies. It&#x27;s not worth it.<p>Time doesn&#x27;t scale
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invalidOrTakenover 5 years ago
Charge more. If you can&#x27;t find clients, the answer is to get a job and build your experience&#x2F;network, not to lower your rates.
mehrdadnover 5 years ago
Related question (especially to those saying you should&#x27;ve charged more): how do you <i>start</i> consulting in software engineering? Like where do you advertise and expose your talent to potential clients who would pay at a rate that you think is worth it?
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andrei512over 5 years ago
1) Not charging enough. This is harder than it sounds. First time I significantly increased my price was when I didn&#x27;t want any extra work, so I asked for double my rate. After closing that deal I started aiming higher.<p>2) Not creating content sooner. There hasn&#x27;t been one thing that influenced my career as much as my blog - If there would be one thing I would do different it would be this: I would have started blogging earlier.
sumgameover 5 years ago
Trying to find work through gig sites.<p>I&#x27;ve spoken to multiple freelancers to learn that the best way to actually find good clients that pay well is through word of mouth. There is inherent trust in the relationship when someone comes in as a referrals vs when they don&#x27;t.<p>And that trust really changes the game in terms of how much more comfortable they are in terms of how they engage with you. They&#x27;ll trust you with the project because they trust the referring source.<p>The alternative is spending a significant amount of time showing your skillsets to clients that don&#x27;t know about you. Which means you may have to warm them over a few projects before they actually fully trust you. While starting off job sites maybe the only way to build a portfolio but we believe that everybody inherently has a professional network of good relationships they can tap onto, like old colleagues or friends from college that work in a similar industry.<p>[1] Here&#x27;s a post I wrote about the ways different ways experienced freelancers find clients and most of them said that their best work came through word of mouth <a href="https:&#x2F;&#x2F;freelancefish.com&#x2F;things-we-learnt-about-finding-clients-by-speaking-to-10-freelance-consultants&#x2F;" rel="nofollow">https:&#x2F;&#x2F;freelancefish.com&#x2F;things-we-learnt-about-finding-cli...</a><p>[2] If you want to bootstrap your referral network, a friend and I are working on a tool that helps freelancers find work through word of mouth by reminding you to stay in touch with people and helping them in meaningful ways. It also encourages you to clearly articulate what you do and how the same people can help you in return. We just launched the beta a couple of weeks back and are slowly adding people onto the platform <a href="https:&#x2F;&#x2F;clienttree.io" rel="nofollow">https:&#x2F;&#x2F;clienttree.io</a>
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Pandabobover 5 years ago
1) I thought that getting clients would be relatively easy, but getting new ones is more about trust than anything else. I moved back to my home town after spending two years away and noticed that my professional network there was quite poor so it took awhile to find a gig (~2 months and it&#x27;s not in my home town).<p>2) When looking for opportunities (any kind really), the 80&#x2F;20 rule applies. Try to focus on the 20% that produce 80% of the results. In our case we started by cold contacting, with quite poor results. Instead, we&#x27;ve been pretty successful using local freelancing networks&#x2F;sites ran by larger consultancies to outsource the work they don&#x27;t have the resources to do. Granted that&#x27;s just subcontracting but it&#x27;s a decent way to start out. I&#x27;d imagine the way the 80&#x2F;20 rule applies when building direct client relationships is to focus on large-ish corporatios with decent financials that are already using contractors.
nickjjover 5 years ago
I&#x27;ve been freelancing for ~20 years.<p>One of the biggest mistakes was not charging enough early on, which lead to taking on work from questionable clients.<p>I think it was easy for me to fall into that trap because I started really young (pretty much right out of high school). I had no mentors or anyone to talk to, and this was in the late 90s so there weren&#x27;t thousands of blog posts and Youtube videos on this topic.<p>Your rates make a big difference and it&#x27;s not just related to your income, it&#x27;s also heavily tied into the type of clients you&#x27;ll be working with. On average after many hundreds of gigs at varying price rates I find the more you charge, the more easy going your clients are. They tend to trust you to do your job instead of trying to micro-manage everything with unrealistic expectations. Of course this comes with more responsibility, but that&#x27;s a trade off I&#x27;ll make every time.
berkesover 5 years ago
Not making the client pay specifically and separate for travel. It should cost them more to have you come over to their office. That way incentives are aligned. That way they&#x27;ll book all weeks meetings in one day, instead of having you come over to their office every day.<p>And ensuring travel hours, despite being paid, are not working hours. Working on a train or plane is fine, if you feel like it. But it should be your choice, a courtesy. Not something they can expect. &quot;I&#x27;ll get that report 9:30 tomorrow. Tomorrow? But you still have two hours of travelling. Yes. Which is why I cannot finish it tonight.&quot;
mattbgatesover 5 years ago
I think there are three mistakes I&#x27;d make:<p>1. I wasted a lot of time as a freelance web designer trying to get clients and convince them to go with me. I think someone would tell me they wanted a website. Without taking any payment at all, I&#x27;d setup a demo website. It wouldn&#x27;t be a whole lot, but I&#x27;d setup at least half the pages with lorem ipsum, only to have them tell me they&#x27;d get back to me... or take forever for us to get the website done.<p>2. I always undervalued my work thinking that they would go to another client. To this day, I still am a culprit of making this mistake. It&#x27;s not that I should overcharge a client, but for a lot of the bullshit they put you through, back and forth, meetings... etc. I was giving away a lot of free time.<p>3. A lot of times I&#x27;d have clients going into their website and making their own mistakes.. nothing that was my doing.. nothing that even required me, but oftentimes, I&#x27;d rush to fix everything for them. Soon as I stopped rushing.. I realized a lot of the time, clients figure it out themselves, especially the usual minor mistakes they&#x27;d make.
royandre2kover 5 years ago
Here is my way of doing it, after 20+ years of experience in the field. Be sure to watch the video in the &quot;article&quot;.<p>www.trollandre.com&#x2F;rent-me&#x2F;
angvpover 5 years ago
Those were the errors I made for a project I was a consultant&#x2F;freelancer:<p>- Not charging the right price per hour, because &quot;I was starting, this was an opportunity&quot;. - Not putting boundaries on client limits, as in, &quot;no you can&#x27;t call me whenever you want&quot; (especially if you live in a different timezone) I personally understand they need to have an answer, but they can do perfectly fine by e-mail and you&#x27;ll have to set to them a deadline for replies, for example &quot;I will call&#x2F;or reply you as soon as I get the e-mail&quot; on the contract. - I didn&#x27;t bill them for every cost they make me do like travel meetings and other general costs, so at the end my profits were even low. - I didn&#x27;t had a contract, that was completely solid, so, get a lawyer who can draft you a solid contract with all your needs. - I was so overswamp of work that I couldn&#x27;t manage all the expenses, or other time that I didn&#x27;t bill to them, so also, get an accountant if you are charging them with something that might be funky.
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posedgeover 5 years ago
As a junior software engineer I wonder, how do you get started with contract work, and how do you keep getting clients? Is it all networking?
pier25over 5 years ago
1) Setting my rates too low<p>2) Not saying &#x27;no&#x27;<p>3) Not making contracts and accepting changes mid project
jitendracover 5 years ago
Not full time freelancer, but I made many and still make some those includes<p>-Not charging enough.<p>-Spending less time to find client<p>-Not specifying Time required to complete task<p>-I have micro-experience of many platform and business specific task, but despite knowing its is rare to find such developer I always forget to charge enough.<p>-Taking fixed price for project with ambiguous scope like firing on own leg.<p>-Not to know when to refuse to do something<p>and many more.
innocentoldguyover 5 years ago
My top-three biggest mistakes were, in order of severity:<p>1. Taking on and continuing to work with asshole clients. 2. Setting my rates too low (I didn&#x27;t account for taxes, paying both halves of FICA, and healthcare as much as I should have). 3. Not finding a good balance between finding clients and actually doing the work.
eagsalazar2over 5 years ago
Constantly update expectations based on how the work is actually going and based on evolving requirements. If you are T&amp;M or Fixed Fee, you need to always give people your best expectation of progress and where you think (even with a lot of uncertainty) you&#x27;ll be when the budget runs out. If you do this constantly and early clients feel empowered to make choices (including adding more budget). If you just work until the money is gone either you eat the overage or the client is blindsided and pissed off.<p>The short version of this: Never, ever, go over budget - always ask for more money or a cut in scope and always do so as early as humanly possible.<p>If you and&#x2F;or the client aren&#x27;t clear on scope or if the budget is enough, don&#x27;t sleep at night, confront and squash the uncertainty and resultant misalignments or you will get bitten!
jppopeover 5 years ago
Everyone here covered 99% of the things I would say so I&#x27;m going to add a few important ones that people missed.<p>- Estimation. Devs are notoriously bad at it... so don&#x27;t think of it as an estimation of the amount of time something will take, think of it as a negotiation with the goal of getting them to agree to the most amount of time something could take. If your estimation doesn&#x27;t seem ridiculous to you then you did a bad job of negotiating.<p>- Asshole tax. If you get a client that you think is going to be an asshole tax them for that privilege. +20% at least (make sure you&#x27;re charging more to begin with as previously mentioned). Now this may seem wrong but if they turn out to be not an asshole (which happens a lot), but to make this right with the universe just do more work and don&#x27;t bill for it. The idea here is that you still end up being mentally happy to do the work even if working with them is painful.<p>- Use options to negotiate better. There is a bunch of advice saying &quot;don&#x27;t charge by project&quot;... hogwash. If you can make more money by leveraging a customer&#x27;s desire to know ahead of time what something will cost you can make money on that. You can clearly define ahead of time exactly what the project entails, charge a 2X or 3X what it would cost in hourly, and then charge for scope changes (which we all know there will be a ton of). Similarly, when you present a proposal, give at least 3 options: &quot;cheap-ass&quot;, &quot;normal&quot;, and &quot;deluxe&quot;... you will be surprised how many people will spend extra money because they can (you can do this even if the project is billed hourly). Furthermore... people that head into &quot;cheap-ass&quot; land give you valuable information on how to deal with them - most of the time this means you do the same thing but need to itemize your work more heavily (more on this).<p>- Itemization. Better Negotiation and billing higher amounts are improved by itemization. they say the person that comes to the negotiation table with the most bullet points to negotiate over will win the negotiation. Billing is just a different negotiation.<p>- Getting content is a nightmare for web clients. Charge for that... but as mentioned elsewhere make the charge in the form of a discount elsewhere. If the content is delivered by XX-XX-XXXX the project is discounted $XXX. THIS INCLUDES BASE ECOMMERCE PRODUCTS.<p>- Don&#x27;t try to hire people to do part of your work until you are REALLY efficient at it.<p>- Exercising is part of your job if you are 100% on your own. Seriously.<p>- If a tool will save you time buy it immediately. Avoid free tools - you will pay for them later and it will cost you more.
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_Codemonkeyismover 5 years ago
Too cheap and not sending early enough invoices, because it felt hard to do while we were still working together. Now I&#x27;m more expensive and send invoices right away. If there are troubles with payment I have a better lever and can also stop working with a client.
TrackerFFover 5 years ago
When you&#x27;re starting out, it can be easy to think that you&#x27;ll just undercut your competition - if not for the experience gained.<p>No, here&#x27;s the truth: When you undervalue your work, you&#x27;ll attract the types of clients you don&#x27;t want to work with. Scammers, misers and bargain hunters, etc.<p>You&#x27;re also signaling that you&#x27;re inexperienced - even though you may have a legit reason for charging less. I know consultants that work from home, and live in extremely cheap areas, or simply don&#x27;t have many expenses, compared to consultants living in high COL areas.<p>So yeah, charge more. It&#x27;s a good filter that you don&#x27;t need to actively work on.
wensleyover 5 years ago
Lots of advice to raise your prices, which I agree with, but just be careful if quoting for a dream project or something in an industry you want to move into.<p>I recently quoted for such a project, with a higher price than usual but not unreasonable at all. Heard nothing back from the client for weeks now when discussions were previously going well. I feel like they have taken offence at my quote or something.<p>I am a bit of specialist in the particular area so pretty sure they won&#x27;t find someone else to do it for less, which was part of the reason for my slightly higher quote.<p>Any advice on how to follow up in a situation like that?
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greggybover 5 years ago
From a business perspective - regardless of the content of consulting&#x2F;freelancing:<p>People respond to incentives and everything that matters to you and to the client is up for discussion.<p>I do a mix of project work, training, and team&#x2F;design coaching. I have a graduated rate schedule. If we&#x27;re doing a long-term project, I&#x27;ll typically price work out at the week level and bill at what comes out to be a lower effective hourly rate. This is fine, because these things are planned in advance and I can schedule around them. For customers that want to be able to get an hour or two of time nearly on-demand, I bill a much higher effective hourly rate and bill at 15 minute intervals.<p>I value my time, and I value being able to plan for things. I incentivize clients to do this by charging them more for things that are relatively inconvenient.<p>I like being paid on net30 terms - this is how I plan my cash flow. If a client has a blanket rule for net60 or something else, I&#x27;ll discuss with them my preference, and will typically offer early payment discounts, something like a 2.5&#x2F;30 net60. Again, incentivizing my preference. I&#x27;d rather have a predictable cash flow.<p>Regarding the second item - it&#x27;s always worth discussing something. I&#x27;ve never had a customer issue with schedule or scope when we&#x27;ve talked through what&#x27;s happening. Your work matters to your customer. Keep them apprised of what&#x27;s happening.<p>I will typically have active work with 3-5 clients at a time. I have a mix of remote clients and those that prefer on-site presence. For much of the last month and a half, I worked out of one client&#x27;s office, but had daily standing commitment from 12-5 for another remote client. The on-site client was fine with this, because we discussed the schedule. They prioritized the on-site presence and immediate availability.<p>I typically won&#x27;t work full time for a single client. I consider full-time to be 40hr&#x2F;wk for more than two consecutive weeks. This doesn&#x27;t mean I have no long term clients, just that we work out schedules that work for both of us. This is because I value my schedule flexibility and don&#x27;t want to be beholden to a single client. My clients get this.
cvhashimover 5 years ago
Here&#x27;s some solid advice for consulting: <a href="https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=2YF0_N7DuwA&amp;t=1254s" rel="nofollow">https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=2YF0_N7DuwA&amp;t=1254s</a>
exabrialover 5 years ago
This is going to sound basic: not charging enough. It&#x27;s worth an entire blog post. Between imposter syndrome and economics, you probably won&#x27;t value your experience enough.
unnouinceputover 5 years ago
Took a project as a whole price. As a result, the client asked for a lot of changes and paid only initial price, of course. What was supposed to be a short 2 days project blew into a full month. Learned my lesson, never worked on a fixed-price project again, only hourly. Now I welcome clients with gazillion of change requests and new features since I get paid by the hour. Also allows me to be at hand maintenance guy after project is done. This way pays the bills quite nicely.
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miesmanover 5 years ago
Starting work before I had a written purchase order in hand (or at least a verbal purchase order number with the promise of getting me the written purchase order soon). if you’re working before you get the purchase order there’s no need for them to actually make this a priority. It always eventually turns into a problem. Also having a purchase order shows that everyone in the company is on the same page (between engineering and the finance department).
sdiwover 5 years ago
Like most of here pointed out, I didn&#x27;t charge high enough. When I started I was afraid if I charge too much, they will leave.<p>But still, I haven&#x27;t learned from my mistakes. I charge way too less compared to what people posted here. I don&#x27;t increase the price continuously. PLUS I don&#x27;t market myself much. I heard word of mouth marketing is best for freelancers but I am yet to get a gig from word of mouth marketing.
Rebelgeckoover 5 years ago
When a customer makes a new request or tries to modify a requirement, don&#x27;t be afraid to say no if you don&#x27;t think it&#x27;s reasonable
twobatover 5 years ago
Reading many replies here I now understand why prices go from $2 to $200. The work often gets easier but the intermediaries increase.
HeyLaughingBoyover 5 years ago
Lot of good comments here. The &#x2F;r&#x2F;freelance subreddit is also a good place to ask questions &amp; discuss issues.
andrewstuartover 5 years ago
What&#x27;s the appeal of being an independent consultant?<p>Why would you do this versus any other business or job?<p>Genuinely curious what the appeal is.
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JJMcJover 5 years ago
Do not work extended periods without getting paid. Especially if it&#x27;s something approaching 40 hours a week.
Tangokatover 5 years ago
Bring the client in to ask them what to do when something unforseen happens in a project. Even if you know what should be done, having them make the decision with you means they can&#x27;t come back 6 months down the line and complain about the project not being delivered on time.
mtbcoderover 5 years ago
If you are in the US, make sure you are up to speed on any county&#x2F;local regulations and tax laws about running a business. Even as a freelancer and depending on your area, you may need to obtain a business license, pay gross receipts or any other such legal obligations.
thdrdtover 5 years ago
The thing that most forget: it is impossible to estimate. So don&#x27;t do it. Charge by period and keep communication to the client what you did in that time. Give them confidence that you provide them company value for the time they pay you.
tomaszsover 5 years ago
As freelancer or as a consultant? As a freelancer i once didn&#x27;t stop working for a client who didn&#x27;t pay for a month. Because we cooperated for a year and good contact with him. I never got these money back.
AvrohomSpadoneover 5 years ago
Get a retainer and start work when check clears. Invoice client against the retainer. When the retainer low, ask for more money. When the retainer is spent, stop work until additional funds are deposited.
rmetzlerover 5 years ago
Also, there is this advice from Mike Monteiro (explicit language):<p><a href="https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=jVkLVRt6c1U" rel="nofollow">https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=jVkLVRt6c1U</a>
regularfryover 5 years ago
Not sufficiently understanding my own brain. If I&#x27;d known then what I know now about ADHD, things would have gone very differently.<p>(OK, I don&#x27;t really think of this as a mistake, but still...)
whalesaladover 5 years ago
There is an excellent book that I would suggest called “The Secrets of Consulting” by Gerald Weinberg.<p>I also use a tool called FreshBooks that has been killer as far as invoicing and tracking time.
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the_resistenceover 5 years ago
For B2C, get 100% upfront. For B2B, 50%. I am willing to walk away from all business when my payment terms are not met. Life is so much less problematic.
scandoxover 5 years ago
Don&#x27;t be afraid to fire the client. Be conscientious but don&#x27;t allow your priorities to be kidnapped.
deforciantover 5 years ago
Would you take company options&#x2F;shares as part of the compensation if they can&#x27;t afford to pay more?
royandre2kover 5 years ago
Here is my way of doing it; www.trollandre.com&#x2F;rent-me<p>Based upon 20+ years experience.<p>Be sure to watch the video listed in the doc.
carc1n0genover 5 years ago
Underestimate time needed, and I didn&#x27;t communicate often enough.
camel_gopherover 5 years ago
Not charging enough. Not spending enough time looking for new business
awinter-pyover 5 years ago
Don&#x27;t forget to withhold quarterly taxes if you&#x27;re 1099
sys_64738over 5 years ago
Undercharging. Double your rate to get better clients.
xwdvover 5 years ago
Didn’t buy errors &amp; omissions insurance.
o-__-oover 5 years ago
- Not forming an LLC: first gig was done as myself, in hindsight i could have been sued and had a judgement or bankruptcy hang over my personal head for 10 years (no assets back then, but you could lose your home if you own one. don&#x27;t do it). Get an LLC, get a registered agent, get a PO box, get a bank account and a bank ledger. Money you want to spend from the business goes into the bank account as a deposit and comes out as a business check or business credit&#x2F;debit purchase. If you spend on a personal CC, reimburse yourself from the business bank account. Don&#x27;t pierce that veil.<p>- Closing the deal &#x2F; Asking for the sale: Gave away waaaay too much work for free thinking it&#x27;s advancing us to the point of the sale. Don&#x27;t give away your work for free, not only does that lower your value in their eyes (people care when they pay for things) but you are ultimately,<p>- Undercharging: left money on the table like a fool not billing for &quot;small things&quot;<p>- Using my own ERP: no one uses whatever system you found on github, they use quickbooks. get that, export to whatever format your erp understands<p>- Paying taxes quarterly like a fool<p>- Forgetting I am a contractor: got a migraine? no meetings or deliverables? found a hot lead? DON&#x27;T GO TO THE CLIENT SITE<p>- Self-hosting the wrong tools trying to save a buck: Opensource gitlab is nice. Opensource gitlab is not nice when you need to troubleshoot why Postgres is spewing vacuum errors.<p>- Going SaaS with the wrong tools and hemorrhaging money between clients: Paying for heroku to host an app I can run in docker locally, paying for dropbox when google or onedrive is free, paying yearly on something only used twice a year.<p>- Not billing 2&#x2F;10NET30 and not charging late fees: Get your money faster if you offer them a 2% discount if paid in 10 days instead of 30. If they pay after 30, they will be fees that will continue to be added until they are considered deliquent and then collections. I&#x27;ve also offered 5% on higher $ contracts<p>- Not having a contract or blindly accepting the clients contract: My business insurance discounts me if I execute using my contract. Without a contract spelling out requirements change procedures, it becomes a back and forth negotiation game in the middle of project crunch time. Don&#x27;t do it, have an outlined process agreed to at the start of th engagement and use a bugtracker.<p>- Enforcing the contract consistently: If you require something in writing, make sure there is a paper trail. If you end up in court it makes your lawyers job that much easier and that much lighter on your pocket book. I just watched $200k fly out the window because writings were saved on the client controlled G Suite and there were a lot of verbal face-to-face handshake agreements. Always in writing, summarized from your regular business email address.<p>- Not growing: I&#x27;m in profit from this client. I should have another client lined up or two or three executing at the same time. I should hire someone to help me with that fourth client or to find the fifth client.<p>- Thinking you can land a USG contract: don&#x27;t waste your time. Unless you want to suffer through the GSA, try to partner through an established firm instead. YMMV, but i&#x27;m done with the US public sector.
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trustfundbabyover 5 years ago
Charging too little.
franzeover 5 years ago
Charge by the hour.
Seufmanover 5 years ago
Few things:<p>- Get your accounting in order. Pay a professional to do it; don&#x27;t try to do it yourself.<p>- Take care of yourself. You&#x27;ll probably be flying a lot; don&#x27;t take the cheapest routes, tell the client it&#x27;s business at &gt;4 hours in the air, etc.<p>- I unfortunately get brought into a lot of situations where a CEO &#x2F; VP is looking for justification in firing someone or making a big structural change. In these cases, it&#x27;s important to keep in mind that you&#x27;re working for the person who is paying your fee and to not get hung up on trying to fix the situation. It sucks.<p>- Charge a lot. Think up the largest number you believe would be reasonable for your services and multiply that by 1.5x. Consultants are supposed to be expensive.<p>- You&#x27;ll be amazed by how many people reach out and want to take phone calls to go on fishing expeditions &#x2F; mine you for free value. The way I deal with this is: A) I ask very pointed questions about what, exactly, they&#x27;re looking for in an engagement via email before I take a call. If they don&#x27;t have a compelling need, I decline (&quot;I don&#x27;t think this is a good fit for me.&quot; -&gt; be blunt) and B) I have developed a 6th sense for whether a company can afford me &#x2F; the project sounds viable. If you have enough inbound, don&#x27;t be afraid of false positives in turning down phone calls.<p>- Don&#x27;t bill hourly. I charge per project on the basis of value; if a potential client fights you on this, reject them.<p>- Try to get work on a retainer basis. You&#x27;re being paid to not only do work but to be available -- you&#x27;re a service provider. This is nice because the revenue &quot;stacks&quot; up and you also get more integrated into the team this way as it frames you as a source of insight &#x2F; wisdom. If you&#x27;re using consulting as an entry point into a new role, this is very effective.<p>- Build something proprietary: an Excel model, some tech, an audit framework, a taxonomy, whatever. Brand it. That&#x27;s now &quot;your thing&quot; and you can set a market price for it that is divorced from incremental work.<p>- Build out a proprietary funnel for business: a blog, Twitter presence, whatever. If you have to go find business on your own &#x2F; do sales, you can&#x27;t charge as much as when people come to you.<p>- In general, I think it&#x27;s good to be skeptical and to err on the side of telling people &quot;no.&quot; There are a ton of lightweights &#x2F; window shoppers &#x2F; sleazy people out there; get good at detecting them and rejecting them quickly.<p>- NOTHING IS FREE. You don&#x27;t pitch, you don&#x27;t do exploratory onsites, you don&#x27;t give samples, you don&#x27;t take &quot;no-agenda meetings,&quot; you don&#x27;t let people &quot;pick your brain.&quot; You are a consultant and if people want your insight, they need to pay you for it. Internalize this phrase: F<i></i>* YOU, PAY ME.
gpresotover 5 years ago
I am a management consultant, so field of work might be different from yours, but general rules are probably the same. Also, I am not a freelancer, though i have worked often with them. My two pence:<p>- Always have a Scope of Work (SOW) agreed BEFORE you start working: Clients are often bad at explaining what they want in detail, and consultants are equally bad at being realistic at what they can offer in the amount of time available.<p>- Always (ideally) have a contract signed before you do any substantial work. The contract and the SoW are your main protection against scope creep. And usually it is the consultant who drafts them first, not the client, so it is your best chance of driving the project details.<p>- Rates vary with client, length of the contract, stage of client relationship (lower rates for first project), but ...<p>- Rates tend to be sticky. If you work for Xusd&#x2F;h for the first project, many clients will expect that rate to stay for the next one too. So your first negotiation is the more difficult and the more important at the same time.<p>- Rather than offer a low rate, state your full rate and the discount you apply and why (e.g. first project, long project, maybe the client is putting some resources and tools on the project...)<p>- Preferably charge by hour, day or week. The proposal or contract should have an estimate of total price, based on estimate of duration, but it should clearly state that it is an estimate and you will change based on time units.<p>- However, it is very likely that yours is not the only offer they receive, so they will compare them on the same basis, based on a fixed amount of hours per day, and the duration of the project. A consulting firm staffing a team has more leeway with the composition of the team (junior consultant to Partner), and comparisons among firms are slightly more difficult (usually done on the basis of blended rate). The quotes of freelancers are very easy to convert and compare.<p>- Expenses are always on top (travel, hotels; meals are a question mark)<p>- Try to find out hourly or day rates of consulting firm (in you field of activity) in your country: they are likely a lot higher than what you think of charging, partly because they have higher costs, but also because they factor in a % of idle time of their resources during the year. You should do the same. Your rate will probably still be lower then theirs as there is a real value in being part of a firm with established methodologies, expertise, examples... (this may be less applicable in other fields of consulting )<p>- Think about why they need a consultant: is it because their resources are too busy or because they do not know how to resolve the problem they have? The latter gives you more leverage on the rate.<p>- Remember that every client is different: some impose work based on a fixed total price, some do not want to reimburse expenses (and may be fine with a % markup on the rate). Often it is due to internal procurement rules and guidelines, which will be difficult to change.<p>- Bill often throughout a project (frequency depends on project duration: weekly for short assignments, monthly for longer).<p>- A good practice is to send a fee tracker weekly to the client, showing hours worked and incurred fee. This avoids surprises. It is best if you have some deliverables or progress report to show as well.<p>- If you feel that the project is taking longer than expected, be open about it and explain why (it may be because some input from the client was delayed, and they usually do not object to additional compensation, or at least they will push to accelerate on their side; it may be because things are more difficult than expected: this may become a difficult conversation, so be prepared to explain why it is so, what can be done, etcetera).<p>- Your project is also the best occasion to get another project with the same client (as a follow-on activity or maybe because while working on it you get to know they have other problems that you can help with. It is BY FAR the best form of business development.
ossworkerrightsover 5 years ago
My most regrettable mistake was not doing it earlier in my career.
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