Something I wish I'd known when I started freelancing about 8 years ago: Being good at your craft (like programming) is assumed. In order to do well at freelancing, you also have to have some business sense.
There are all sorts of great resources about how to business online, but it didn't even cross my mind at the beginning that that would be important. Once I started learning how to business freelancing became waaay easier.
Things like how to invoice, how to negotiate, how to talk to a client, how to schedule your time, how to budget, how to market yourself, how to network, etc etc etc are not at all related to programming, but can make the difference between a happy freelancing existence and a miserable career.
I've been fortunate to have a pretty lovely freelance web development career. My key has been finding clients that are smaller companies and not full time, with a long ongoing project.
Smaller companies allow you to build a relationship with the owner of the business, and to position yourself as not just a pair of hands to write code, but a trusted advisor who takes the business's actual needs into account when writing code (which is how you compete with global talent).
Not full time means you can have multiple clients at once to give you a nice advantage over a full time job: if one source of income dries up, your income doesn't go to zero.
Most of my clients have been multi-year projects. I'll slowly build their webapp for around 10 hours a week at most. I've worked about 20 hours a week for the last 8 years, lived in lower cost of living areas, and spent the rest of my time on doing whatever I feel like.
Some resources I'd recommend:
* The Personal MBA by Josh Kaufman - a nice overall summary of how to run a business
Oh, "How to Win Friends..." is eighty years old. That's the part I have the biggest problem (being on the near end of the autism spectrum). But even I managed to find a small client with a long-running project that I kept busy with for almost eight years until I needed a change. The point I regret a lot is not having sought and become part of a small team to handle to long-running projects better in every aspect. The folks around me I admire the most did just that, most of them working in a two-people team and they are very productive and inspiring..
Regarding the 20hrs/week, everybody should know: That's the productive time, for every human being. Charge accordingly.
I would avoid Dale Carnegie. It might have been valuable in the past, but right now to me it reads just like a bunch of out of time platituteds.
Also, as a freelancer in Germany, I can tell you that those guidelines mostly apply to the American way of doing business--which definitely isn't the worldwide standard of dealing with business owners and managers.
The reason they’re platitudes is because they’re true. Taken out of context they sound trite and they are but they’re well explained and just as true as when originally written. They may apply more easily to America than Germany but greeting people, remembering their name, taking an interest in who they are and how they’re doing work on everybody. You should not smile like an American in Germany. People might think you’re developmentally delayed. Equally you should not pretend to be eberyone’s best friend first time you meet them as if you’re from Los Angeles. But almost all of the book is relevant cross culturally.
The biggest takeaway I got from How to Win Friends and Influence People is simply this: Think about things from the other person's perspective. Instead of talking about yourself, let them talk about themself. Instead of boasting about your own accomplishments, ask about theirs.
The exact way you do these things depend on the culture for sure, and the book is written by an American. From what I understand Germany is less directly "friendly" than the US so the pleasantries may not carry over, but I have to imagine that considering the other person more than yourself does carry over.
> as a freelancer in Germany, I can tell you that those guidelines mostly apply to the American way of doing business
American here. I’ve found that the friendly “American way” of doing business lets my team seal deals faster than their European competition. I initially got pushback from my UK team. “That isn’t how it’s done.” But human nature is human nature, and taking people’s personal aspirations into mind is never a bad strategy.
America is only 24% of world’s GDP — Most business in the world is not done ‘the American way’. Europe is 21%, their ways are just as valid. It just depends on the expectations from the other side.
You won’t be able to run a business the American way in Germany, not would you be able to it vice versa.
Nor you should be able to be.
(There is nothing historic about being able to capture 20-25% of the world’s GDP either — England (1800s), Turkey (1600-1700) and China (European dark age through Middle Ages) has all achieved the same economic power US enjoys as of today.
> You won’t be able to run a business the American way in Germany, not would you be able to it vice versa.
This thread is incredibly vague. I bet there is significant if not majority overlap between the two.
Back to Dale Carnegie, his advice about not telling people "you are wrong" and getting to know them is some of the best and simplest advice I've ever received, and transcends time and space.
My personal experience is that Germans take 'doing it by the book' to a whole another extreme. It's paperwork until the end of time. (I have no affiliation with either, but I've worked with both)
The book "Impro" by Keith Johnstone is really kind of brilliant in this regard. It's technically about improv theater but universally applicable.
I found it's study of status quite good. So much can go wrong for people when they fail to maintain a harmonious exchange of status when interacting with others. This book describes how important status is in comedy and breaks down some old Marx brothers skit to analyses the humour in seeing somebody have their status diminished.
It's been a while since I read it, but it's stuck with me and I remember developing a new sort of awareness of my interactions with others.
Do you have any advice in how to deal with medical insurance? It's by far the most scary part when I think about becoming a freelancer in the US, more than the business and self-management aspect of it.
Medical insurance in the US is for sure a big consideration for doing freelance here.
It's gotten better with the beginning of the federal marketplace, but it still is true that better coverage is gotten from a full time job. Though, I guess it depends on what you are looking for. I pay $350 a month for a decent plan in Chicago. But, I'm a mostly healthy 30 year old so YMMV.
Some options you might consider for further coverage:
1. Have a spouse that has insurance. Easy mode, but seems to be an option for some people.
2. Part time job that has benefits. I have a friend doing exactly this - 20 hours a week working at a university and the rest of the time freelancing. Provides a little human interaction too.
3. Medical tourism? I only half joke that I may up and go to Lithuania if I ever need not urgent major surgery (though I might do that even with good insurance). Being freelance opens up that option.
But as more and more people become freelancers, I have to imagine this situation will change. I really hope that in the next 10 years we'll get more options, whether full fledged socialized healthcare or even just the ability to get the same plans as employees. If you were needing a reason to vote in the upcoming elections this is probably the one that most directly impacts freelancers.
you go to heathcare.gov and you fill out the forms and then when something goes wrong you call the number and then you wait and then you fill out some more forms and call another number or two and then you jump through some terrible payment interface hoops and wait some more and about a month later your insurance card arrives.
I picked a middle-of-the-pack "silver" option in new jersey with no subsidy, its costing me ~450/month.
Oh definitely, and the business sense can be boiled down to prospecting and sales. Something I've tried that does work, if you provide a lot of value upfront, is proactively reaching out to people who can offer long-term projects.
So for example, let's say you're a web developer reaching out to owner of an ecommerce store. "Value upfront" could be giving them ideas of how they can capture and recover more purchases: cart abandonment, loyalty points, etc. so they want to hire you to build it for them.
The biggest reason I wanted to be a freelancer was to gain control of my own time. If you charge enough and do valuable enough work, along with having lower costs of living, it's completely doable to make a good living working part time. In the rest of my time I've been able to:
* Be a digital nomad
* Experiment with building apps and products
* Think and make better decisions
* Actually get 8 hours of sleep without hurry
* Save my body from RSI and go to the gym
Etc, etc. It's especially doable as a programmer since that is a very much in-demand service right now.
I'd love to see everyone have 20 hours a week to do whatever they wanted with.
That this is likely a submarine piece for one of the linked products or quoted entrepreneurs shouldn't discount the value of discussion. There are only going to be more and more people working like this and it's a huge price to pay for the "freedom". I've effectively freelanced for 20 years and it's brutal, crushingly so. Until you're big enough to have someone handling admin/etc, you are doing everything and things inevitably get missed or ignored. For me, it's been invoicing and chasing up invoices - to the tune of hundreds of thousands of dollars over the years missed completely. End result is all of the hassle and pressure but with less reward.
Building specific frameworks/systems to work within is absolutely the solution IMO. So, like Xero but with a focus on an exact industry/locale. One-button follow up of unpaid invoices, automatic setting aside of money for paying taxes, automatic advice on rates. Too often, people try to fit the tools to their way of working when I think they'd be better off fitting their work to the tools.
Keep in mind that it's over 20 years. Happens in dribs and drabs like this: get really busy, forget to invoice project for a while, realise you're months behind and so put off invoicing because clients won't like receiving them late, later it gets, more awkward and easier to avoid it gets. Or the business is sold or collapses. Or you don't chase up unpaid invoices for so long it's unlikely you can convince them to pay. Every client harasses you to get the work done. Very few harass you about the invoices. You start invoicing and then the calls come in or urgent emails. You plan to do it from home at night but then life/kids happen and you're exhausted. I forgot to invoice one maintenance client for a year and threw away five figures. Would've been handy money that year.
In the early years, aggregating staff time sheets was manual and easy to put off. We ended up building https://usepunch.com to handle that which is a massive help.
In web development and with 100+ clients, it can be quite difficult to track things like hosting and domains when they're spread across multiple providers, renewing at different times of the year, etc. We ended up building an internal web-app that interfaces with Xero to help manage this, but this was 18+ years in...
And yeah, I can appreciate I've done something very wrong. I've found that all too easy when spread so thin.
"it's unlikely you can convince them to pay" why not simply use some factoring service that charges you some minor % for never caring about missed payments again? There are multiple out there (I am EU based) that have APIs, a decent interface, etc.
I had similar problems, but on a much smaller scale. I thought I had a good relationship with one client and that invoices were being paid on time, but then I found that around £10k had been overlooked by AP over the course of a few years.
After that I phoned after every invoice - which was a pain in the ass for me and for AP, but the money (mostly) arrived on time.
It's really, really easy to miss how important admin and cashflow are. They're boring AF, but also too important to ignore.
Even worse is the realisation that sometimes you are going to be paid late, sometimes you are going to be offered partial payment, and sometimes you may never be paid at all - and these are all absolutely normal in business and you should expect them and have contingencies for them.
As a rule, any freelance work where you rely on timely payment from a single client to cover your outgoings is incredibly risky and dangerous and can easily become very stressful - because you are literally flirting with financial death.
It's not a mess unless you have some weird hangup about billing people and agreed-upon rate for an agreed-upon service. I freelanced full-time for 3-4 years, at one point with dozens of active clients, and never missed a billable hour. It's not difficult if you have a system to track and bill. Yeah it takes time, and it's a grind, and there are times you'd rather just not do it, but to imply that freelancing makes it easy to miss hundreds of thousands of dollars in billables, which is a non-trivial percentage of most folks lifetime income, does not jive with my experience in the slightest.
You did 3-4 years with dozens. I am at 20 years and more complexity. For a number of years, I managed staff and interns - just keeping interns busy chews up a lot of time. I had a co-founder to start with, and was then solo running it from then. Once you have staff but not the scale to get help managing that, it gets seriously difficult. When I started, things like Toggl didn't really exist. I used to print out and manually sum hours from staff per client/project and per month. And then create dozens of invoices each month manually in MYOB, an awful and miserable interface. It was a huge timesink. I couldn't outsource it because I was the only one with true knowledge of each relationship - what to bill in what way, which clients were sensitive, etc.
I'm not saying it's impossible to do it OK, I'm saying it's easy to get it wrong and fall behind. I mentioned the idea of an opinionated business framework to a friend (freelancing very occasionally 1-2 years) and they said "Oh YES, absolutely." And that's for someone who'd send 2-3 invoices a month, not 50+.
It's not just about missing invoices. Freelancing didn't really satisfy me to be a one man business army. Having dozens of active clients sounds like a horror movie to me. I also worried much more as a freelancer than as an employee.
You take them to court. Try to go to small claims. I've got a suit against someone for non-payment I filed 10 years ago - it's still on the court backlog - but it was too large for small claims.
And then you learn to spot warning signs, and avoid clients/projects like that again in the future. Getting some deposit up front is often a good thing, but also not something you can always manage. I've done work for govt agencies - that's generally not going to happen, but once I have a contract or PO, I've got a pretty high confidence the money will come through - it just may take weeks or months to get paid.
In my experience the vast majority of businesses will not entertain the idea of cash up front, period. I bet that you wouldn't either. If you were building a house, and the builder demanded cash up front, you'd laugh in his face.
Finding good clients is important, but if you demand to be paid in advance, get used to waiting those tables because you're going to be doing it a long time. Note: you will not be paid in advance for waiting those tables, either.
This is 100% untrue. I’ve been a freelancer for 11 years and I’ve coached literally hundreds of others. I never, ever work with a new client without getting at least 25% upfront. Never. It’s 50% if the contract is smaller than $20k. And I also never really get any pushback. By the time we’re talking payment terms, they’re sold.
If you’re doing work for clients upfront without a deposit, you are taking a huge risk. Which is probably why out of more than $2 million billed, I’ve only had a single client not pay me, and that was a startup that went under completely.
This could be something built into the hypothetical framework I mentioned. As in, the default quoting template for your industry has x% upfront payment terms, and you deselect that option after a strong warning. All my quotes asked for 20% up front but then I almost never bothered invoicing it until I was finished, so I would need something that auto-invoiced the 20% when the client clicked "Accept Quote"... ;`(
Then the time-tracking component would strongly warn against commencing work until the invoice was paid, etc.
So, basically, a very opinionated business framework web app.
I typically require a deposit and set a payment schedule although I'm doing most of my work on UpWork now. UpWork is nice because they handle all the billing and payment hassles and I get a weekly transfer to the account of my choice. It's worth the 5% cut.
One of the things that I have really come to understand is America is not even close to "land of the free".
There is a very very narrow set of rules that you absolutely have to follow to even be able to live peacefully here. Be born at least middle class, go to good schools, pursue the right degrees, go to corporations, make no mistakes in life and then finally retire in a retirement home paying thousands a month.
Steer from the above path and you'll start seeing things like mistakes in IRS filings or a medical issue or a pre-existing condition or a divorce or a bankruptcy or an unmangeable debt or a gap in career.....you know, normal human problems, you are screwed.
And then there are man-made problems like jail without bail, lawsuits flying around, guns, crime.
Notice there is no place in society for teachers, small-time healthcare professionals, career in arts etc.
The book A People's History of the United States makes a pretty good argument for everything you are stating being in the mix from the very beginning from the founding fathers and the volatile economic mismatch between the haves and the have nots. Of course the author has an agenda but it makes sense from the evidence given.
> And don't forget about being downvoted for listing facts!
Yeah,its a very funny phenomenon. For some reason, Americans like to downvote anything true about their society. This is what you would expect out of communist societies.
Not true. You'd be about halfway up in any other forum, but this is hacker news--where we're not supposed to talk politics... unless it's the kind of politics they want us to talk about--like net neutrality or antitrust or some other intersection of nerds and money.
> but this is hacker news--where we're not supposed to talk politics... unless it's the kind of politics they want us to talk about
But this isn't politics. This is the societal reality of the home of tech industry. There are many people around the world who are blown away by the stories of Silicon Valley.
When we share stories of SV parties, VCs, lifestyle, homelessness, then why not about life and reality here? At the very least, it is informative to people who are uprooting their families and lives in other countries.
Anyone aware of any bank accounts (USA based banks) - that allow for some programmatic moving percentages of money between accounts?
I want to have it when I deposit client checks in one account it takes the money and moves one third to another account and one third to another.
(then I'd like to have a personal account do the same, whenever money is transferred from my business A account to this personal account, take one third and move to savings, one third move to wherever..
My google FU did not find this.. I found a couple of banks saying that you could do transfers, and I think one bank had it so you could choose an amount, like $500 every week or something more static and have that auto transfer... but for freelancing gigs it's not usually a static amount every week.
I thought about doing (and may still have to ) an ask HN on this, but this story / thread is likely perfect for this.
I'd like to find an actual bank product that would do this, I don't really trust the security of a phone app to mess with accounts, and don't want to put a bunch of eggs into some cloud basket either, so I'd prefer to stay away from third party cloud sites that use my authentication to touch any accounts.
This kind of thing would help so many in the gig economy plan for the quarterly stuff better, hope someone can point to a bank that does this.
+1. I'm absolutely amazed that this isn't a thing. "Put 10% of everything that comes in into this savings account" (for example) wouldn't just be useful for freelancers!
It's not a thing because the market is limited, it could be a security nightmare to administer, and because useful rules would be more complicated than "Put 10%..." - because you would have to allow for overdrawn accounts, closed accounts, moved or renumbered accounts, and so on.
Product features like these invariably turn out to be far more complicated than they look.
Nah, you login at the website and add rules for moving money around. Already available. Moving percentages instead of fixed numbers is a small step up from that.
I appreciate the thoughts here. I do believe the market it limited to a degree, partially because so many people just get the same check week to week or whatever.
However the trend is growing, it may be that a third of the US workers are 'gig economy' right now, but the market is greater than 57 million people, as there are plenty of other workers who have a varying paycheck depending on many factors, not just freelancers.
Security nightmare? Not sure about that, as I mentioned in original thought, I don't trust a phone app or a desktop app to a cloud app for those reasons, I know many do for their accounts however, so it can't be that terrible. This is also why I want a bank or credit union to have this option within their system / their online portal though.
Useful rules more complex? I disagree here big time. I could save a tone of time and stress, as could so many other people I have spoken to. Every uber / lyft driver I have spoken to is not prepared for self employment taxes. Construction workers and so many others would greatly benefit by setting up percentage based rules - put 30 percent in other account for the tax man alone would be life changing for many.
Of course you could market it with other bits of standard advice - whatever that it - put 10% of your money into a rainy fund, put 10% for your church, put 14% into retirement accounts or whatever the popular advice is.
I have seen that my two banks have systems in place for making transfers already, within the same bank is simple and fast, and to other banks or phone numbers even is not hard and those systems must already be setup to handle "overdrawn accounts, closed account, renumbered.." and whatever the so on is... I don't think this is difficult to add on to.
It does not need to be complicated, someone could even setup a little pie chart GUI with some standard rules that many benefit from, 30% here, 10% to there, 10% to other there - xmas funds - label your own goals..
This would be a huge benefit to many, and it could also go on those banners at the bank - hey setup your auto split to your X fund with our online system, meet your goals with our auto split feature, etc. (kind of like the keep the change from debit transactions can be sent to your savings account) -
I'd like to see an option to auto move percentage to HSA accounts and such as well - I could see an 'advanced rules' mode to set it so that there are min and max numbers as well - and an email report of what your bank auto-did for you each week or month - this is not that complicated. Could be setup in excel in minutes right?
This should exist already.
First bank that does this may get all of my accounts moved to it, and will get lightnight word of mouth from others in the gig econonony, adn proably lots of adcounts suggesting - hey do this to save us all the end of year grief - auto and easy.
Other professionals would likely suggest this kind of system in fact I think they already do (X percent to retirement, etc) - but there is no system to do it automatically - silly.
Simple.com has something similar, but not to different accounts. You can set up automatic expenses on a schedule and it moves it to expense "buckets". The balance of un-allocated funds is called "Safe to Spend".
Plaid.com might be an option, they have a free account level. Not sure our limited it is.
> "No one really explains to you taxes and contracts and how to chase a client for that bill that they owe you — like, the nitty-gritty,"
Wait...what?
Before I even broke out into freelance consulting I hired an accountant. When starting your own business, I would think it's base-level knowledge that anything with legal ramifications (and that includes the IRS) should be handled by a professional.
Get an accountant. Get a lawyer (at least for one day to draft up your documents and make sure your business is set up or even use LegalZoom).
And within the first month of breaking out on my own, I must have read like 3 or 4 books on freelancing/consulting, 10+ blog posts, and podcasts.
True - no one is going to act like Clippy and say "Hey looks like you're starting a freelance career. Have you considered an LLC and liability insurance?"
But - do people not try and learn about what they're getting involved with anymore? Starting a business, even if it's a 1-person sole proprietor consulting firm, is a big task. And yes, davidscolgan is right that you should consider all business aspects beyond your primary skill. But it seems almost irresponsible to say that starting a business is going to be a huge shock. No one is going to tell you, but even a cursory search online will give you a torrent of information on freelancing, consulting, and starting your own business.
If I hadn't put in the initial legwork into studying the consulting landscape there is absolutely no way I'd: (A) still be consulting or (B) make nearly as much money. But the answers are out there. And yeah - get an accountant, it will drastically simplify your finances.
It's great that you did that, but in my experience (and many freelancers I know) there was not a definitive "I will now become a freelancer" moment.
I had moved to a new city and was interviewing around. A old friend approached me in desperation, offering a lot to work on one-time project for his company. That led to more offers, and those to more. Meanwhile I and friend were building prototypes around a business we might start. (So glad we didn't try to start that one!) Meanwhile, it wasn't until I did my taxes the next year that it hit me that I was now a freelancer.
Only then did I start to get my act together with billing and the rest.
This is far outside the norm, in my experience. At least for people under 30. Maybe seasoned business savvy professionals who start later are different.
But I've had to do a LOT of coaching whenever a friend starts freelancing. Even basic stuff like "a separate card for business expenses can simplify your life"
And these people usually do well. It's just that most people have no clue about even basic business stuff, and nor do their families or social networks, so no one tells them.
Did you have experience in a company, or a friend relative who had told you about business before?
Some people down on their last $100 or less don't always have the luxury of choosing. Building a Wordpress site NOW for a little money or doing something in PHP/MySQL today if you have some basic skills and next thing you know, you're a freelancer without the luxury of having planned all that up front.
Brennon Dunn has a lot of great free blog content and an excellent podcast about all things freelancing / software consulting. Would highly recommend as his content has helped me a lot over the past year, mainly regarding the marketing/selling, billing and dealing with clients sides of things: https://doubleyourfreelancing.com
Brennan Dunn's stuff is great, and I know freelancers who have been very successful in part thanks to him. I'd recommend starting small if buying products though - he had a $50 book version of Double Your Freelancing that was worth it, but at one time he also had a $2000 online course version which probably isn't the right choice for everyone.
Freshbooks have a fantastic free PDF called Breaking The Time Barrier that is about charging for value, not for your time. It's worth reading even if you don't use Freshbooks (I use Harvest instead). The PDF was actually recommended to me by a client, who I think was giving me a hint that I was charging unsustainably low prices.
"If I hadn't put in the initial legwork" might better be read as "If I hadn't invested up front in some startup costs from experts who know things I don't". Paying for Lawyers and Accts seems crazy, when we have the web and a local library. But it often turns out to be 50% wasted money... and 50% "saved my life" money.
After all, an entity is hiring _you_ because you have skills they can't do even though there are tons of books and sites on dev and web engineering. It's wise to do the same yourself for the skills you don't have, or don't have time to master.
BTW, I found lots of variability in pricing around lawyers and accountants, and some negotiation can go a long way.
That said, I never really found taxes all that confusing even long before hiring an accountant. Turbo Tax was always easy. I did have the advantage of learning from my grandmother (who was a bookkeeper) and my dad who was an executive as I was doing my first business as a teenager.
Well, if this isn't my life to a T. A THIRD of the workforce though? I wouldn't wish what I'm going through on anyone. I had no idea it was so widespread.
"soft" mechanisms to remove unemployed people from the labour pool have been used for a long time, to reduce the visible statistics on the rate of unemployment. It leads people to talk about other measures like the rate of under-employment, the number of people seeking work, the number of people in part time work who seek full time work.
But, since many people choose this life to get work:life balance outcomes it shouldn't be assumed all freelance and self-employed are there for nefarious reasons. Just, that quite a few of them are, because there aren't good alternatives.
"I won't give you a job as a bricklayer but I will subcontract to you if you form your own company" for instance...
I’ve been a self-employed solo dev for 11 years and not to brag, but I’ve done very well for the last six or seven in particular. I’ve also helped lots of other freelancers figure this stuff out, ping me if you need some advice (goes for anyone): hi@ryanwaggoner.com
> Freelancers are competing not just within their town, not just with in their state, but are completing globally, and there's just huge global pressures on the amount that they can earn...
bingo. for a piece of work that can be well specified, separated out from the main workflow and then farmed out, it's natural, in today's world, for the customer to open the field globally. a little too natural.
so, the US freelancer is left asking the question: how can I compete with wages set at the global standard of living, including currency exchange differences?
I'm currently working as a subcontractor for a friend's consultancy. For the better part of the last decade, that consultancy relied on remote workers (outside the US) to generate margin.
In that last decade, my friend has discovered there are costs with a remote-only development team and so has decided to insource technical, marketing, and management roles. Her clients are SMBs in the US, and business is growing.
So, one direct answer to your question about how a US freelancer can "compete with wages set at the global standard of living, including currency exchange differences" is to serve a US clientele whose products and services are closely tied to the US and (in my particular case) where being in the same time zone has a significant impact on getting work done.
I'll also add that the insourced group is implementing more reliable processes and producing higher quality deliverables to the consultancy, as measured by client satisfaction and owner feedback.
EDIT: Add paragraph regarding work quality of insourced group.
The wages aren't set at a "global standard of living". They are set by how skilled you are. Usually people who complain about not being able to earn enough don't have very good skills. I've been using UpWork for a little over 2 years. Last year I did about $60k, this year will be around $75k. Being able to communicate well with my clients is a huge advantage compared to overseas workers. It also helps that I actually know what I'm doing.
I rarely work a full 40 hours per week. I've been a freelancer for almost 10 years now. I've briefly done some part-time stints in-person in offices in that time and it was a good reminder of how much I hate being stuck in an office following an arbitrary schedule.
Full-Stack LAMP, mainly building heavily-customized WordPress sites. My current project is big enough that we've brought on some front-end help, so I've learned to manage git and am paying attention to developing my "soft" skills such as management. I'm likely doing a basic AWS certification soon, perhaps followed by some more DevOps type stuff or learning more formal UI/UX skills. At that point I'll be far above the average WordPress developer and could hit $100k+ if not next year, then the year after that. Pretty good for someone without a college degree working from home.
It's still competing globally. Although it can be said that american coders are above average globally, to earn an American wage every one of them will have to be top 1% in quality.
So then the people who aren't skilled enough will have to either improve their skills or go find something else that better fits their skills. Competition is good.
I think it's better to talk about the actual amount of money that is ending up in my bank account rather than mythical pre-tax rates that receive a 30-50% haircut, especially for 1099s.
If the business wants to deduct the expense, then I charge higher.
If the business somehow comes up with $2,200 a month in physical cash, then I won't question it.
Yes it's illegal, but that's actually for the IRS to prove and not me.
I've been freelancing for a few years as a DevOps Engineer. I've gotten very lucky because I've landed gigs that let me become virtually in expert in a few different technologies, while making the most money I've ever made, all with no on-call at all (traditionally the bane of my existence) and with very friendly people and clients. However, I'm nervous now as my gig runs out for at least two reasons.
First, I'm self-employed in name only. While managers view me as a very senior resource that is essentially a team lead due to experience and charisma, I still feel like I have no more control than an employee. In other words, I feel like an employee. Which is not how I suspect many of you feel.
Second, finding a new gigs is going through recruiters (here in NYC) and interviews are --again-- exactly like, if even worse than, employee interviews. In other words, not only am I expected to spend hours going through round after round of interviews, but I'm expected to already know all the technology they need, and moreover I'm competing with A) full time employees since many roles will take FTE or contractors; B) other contractors with lower rates.
I live in NYC and would pay someone for advice on the second part above.
We need some sort of not-for-profit place to meet and congregate online as freelancers.
> interviews are --again-- exactly like, if even worse... hours going through round after round
I would decline extensive interviews for contracts less than a year.
Be up front with them that the process does not make sense. It will be obvious in a few hours whether you can do the job, and therefore little risk to them.
(I realize some places will stick to their process, be damned. It is a quality signal, however.)
Making a ton of money as a freelancer is easy: just hustle harder for clients.
Let me explain :)
I quit my job and started freelancing full-time when I was 24 because I found a $50 / hour PHP gig on Craigslist and did the stupid math of "40 hours per week x 50 weeks per year x $50 / hr = $100k / year!!"
Ugh, so naive.
Those first few years were rough and I almost quit many times. Everything was so much harder than I knew, from finding clients, to getting the work done, to getting paid, etc.
BUT I stuck with it and gradually figured it out. I started spending time on "business development". I stopped charging hourly. I started investing in my own skills to move into higher margin areas. I focused on a particular client niche instead of doing everything under the sun. I built better sales and marketing channels. I got more disciplined with my time. Etc, etc.
To date I've billed over $2 million to clients for mobile dev, web dev, product management, technical writing, and online marketing (by decreasing order of where I've made the most), and I know this sounds like I'm bragging, but I have zero concern these days about being able to make at least $250k per year from freelance and consulting. I haven't figured out a lot of things in life, but I've figured out this.
I've also spent the last few years writing, speaking, coaching, and otherwise helping other freelancers get started and grow their businesses, first friends and family, now a pretty sizable online audience, so I have a pretty good view of how freelancers succeed and how they fail.
More than anything else, the quality I see that helps freelancers succeed is being willing to spend regular time hustling for clients. You don't have to be a sales and marketing wizard, or be an extrovert, or spend half your time on it. But you need to spend time every day / week / month on it, and never stop, always be thinking about who your customer is, where you find them, and how to close them.
The freelancers I see fail almost invariably have no reliable marketing channel other than referrals (or Upwork, which is the fast-track to commodity rates). And referrals are awesome, some of the best work I get, but they're passive AND they work a lot better if you can seed your ecosystem with other sources of leads.
If you can build a pipeline of qualified client leads, everything else is easy. You can make a lot of mistakes with a client or a potential client if you have another lead coming right behind that one. And that wipes away most of the concerns in this article.
Through solo 401ks, my wife and I have saved more than half a million for retirement. We have a healthy emergency fund. We have insurance. We take plenty of vacation, etc, etc.
No one in this article would have any of the problems they're talking about if they made twice as much. And I can guarantee you that almost none of them spend hardly any time trying to find and close clients. They either wait for clients to come to them, or they use Upwork, which is almost as bad.
The problem here isn't irregular income, it's just not enough income.
OK, enough rambling...I'm happy to help anyone in the HN community with some free 1:1 advice if you want to email me: hi@ryanwaggoner.com
For a book recommendation, Simple Numbers... by Greg Crabtree is definitely the best accounting and finance book for freelancers and small businesses that I've ever read. It's just about perfect, I read it two years too late but it's transforming how I look at finance and accounting for my consultancy.
"No one really explains to you taxes and contracts and how to chase a client for that bill that they owe you — like, the nitty-gritty,"
Years ago I ran a conference for independent web/tech folks. I put it together because I'd been tired of going to other tech conferences and... just realizing that none of the content would have any impact on my ability to have good contracts, deal with insurance, get paid, deal with taxes, market myself, onboard new projects, etc. Figuring out how to shave off 4ms of a query, or replicate mysql, or float my divs with sass... none of that was relevant, but I still enjoyed the social aspect of conferences - the gathering of folks with similar needs, skill and problems looking to help each other.
Yeah, no one 'tells' you how to do any of these things. Tax stuff, especially starting out, doesn't need to be that complicated (but you don't necessarily know that up front).
"There's no such thing as maternity leave for freelancers"... Hint - it's really just extra overhead an employer budgets in to the price they charge for their services minus the expense of you. Budget for this stuff yourself. It's hard, especially at first, if you haven't done it before, to begin to think about this stuff, and deal with 'irregular income'. But it's possible.
"Two-thirds of them are dipping into their savings every month to make ends meet. We see that freelancers as a result are really lagging behind employees when it comes to saving for retirement,"
It's because they're undercharging, and the buyers are profiting off that arbitrage. I'm not sure there's any simple or easy way to get around this. Years ago I was part of a forum for tech folks where 'rates' were discussed, and a couple people shut down the thread (and the next one, IIRC), because they had this notion that this was "price fixing" and somehow they were playing a part ('safe harbor' sprang to mind, but... they weren't having it). Yet... everyone keeping their prices "secret" doesn't really help most people. I can see prices for auto labor on websites, but most tech folks don't put pricing (hourly or otherwise) out there. And... I get it. I understand why (I don't, but did for a while, and may again).
> Another big barrier to savings is the complexity of taxes for independent workers.
> Traditional employers contribute toward their workers' payroll taxes, but that's not the case for the self-employed, who must pay all their own Social Security and Medicare taxes. And because taxes aren't automatically deducted from their paychecks, freelancers must figure out what they owe on their own.
> "Without that, Chang says, it's hard for freelancers to know how much they can save.
Well... even when taxes are 'automatically deducted' from a paycheck, that doesn't mean it's the correct amount (which is often a moving target).
As others in the thread here mentioned, this is sort of a solved problem, especially for smaller/solo folks, by using a payroll service. It's not free, but generally for under $600 for the year, and factor in another few hundred for a CPA to prep taxes... you can sort most of this out. It's not fun, and ... yeah - hey - you're going to need to charge enough to cover these costs of doing business.
Dealing with all this gives you a whole new appreciation for anyone you may go work for in the future. I was at a client's meeting of around 15 employees, and they were discussing health insurance. Premiums were going up, and the company was covering X% of the premiums, but everyone would have to pay a bit more. The owner said "does anyone know what our actual monthly cost per insurance policy is?" There were a dozen guesses... and I was shocked as to how far off people were guessing - almost all way on the low side. At the time, the employer's cost for each health plan each month was... $580, IIRC - people were guessing $80, $120, $95, $160.
> "I almost can't have fun anymore because there's always something that I should be doing". Welcome to business. Go take a 'regular' job and have 'fun' with your 5 paid days off every 365 days. I don't mean to be negative here on that point, I just feel like many (most?) people have a very naive view of business, work and money/finances.
I am one of the hardest working people I have ever met, people can (hyperbolically) say I work more than a hundred hours per week. But that's easy to say when you're full-time, and you leave early for that errand or come in late to drop the kid off at daycare, and then make a few hours at night. When you are tracking your hours, suddenly making 60 real hours is hard, or even 40 real hours for that matter.
(I'm still in a privileged position, so no real complaints.)
There are all sorts of great resources about how to business online, but it didn't even cross my mind at the beginning that that would be important. Once I started learning how to business freelancing became waaay easier.
Things like how to invoice, how to negotiate, how to talk to a client, how to schedule your time, how to budget, how to market yourself, how to network, etc etc etc are not at all related to programming, but can make the difference between a happy freelancing existence and a miserable career.
I've been fortunate to have a pretty lovely freelance web development career. My key has been finding clients that are smaller companies and not full time, with a long ongoing project.
Smaller companies allow you to build a relationship with the owner of the business, and to position yourself as not just a pair of hands to write code, but a trusted advisor who takes the business's actual needs into account when writing code (which is how you compete with global talent).
Not full time means you can have multiple clients at once to give you a nice advantage over a full time job: if one source of income dries up, your income doesn't go to zero.
Most of my clients have been multi-year projects. I'll slowly build their webapp for around 10 hours a week at most. I've worked about 20 hours a week for the last 8 years, lived in lower cost of living areas, and spent the rest of my time on doing whatever I feel like.
Some resources I'd recommend:
* The Personal MBA by Josh Kaufman - a nice overall summary of how to run a business
* The corpus of Kai Davis's material (https://kaidavis.com/), including his super valuable/highly entertaining podcast Make Money Online (https://makemoneyonline.exposed/)
* How to Win Friends and Influence People by Dale Carnegie - how to interface with fellow humans (freelancing/business is mostly a human activity)
Happy to help anyone who's interested in freelancing if I can, send me an email.