Things you should know about freelancing

I’ve noticed that being a freelancer generally brings a lot of interest among friends, family, and acquaintances. There are a couple questions that I’ve been asked so frequently that I’ve decided to answer them in a blog post. Whether you are someone who has lots of experience in your field and want to break into freelancing, or if you or someone you know is looking to begin freelancing to start a career with little experience, I hope some of the things I’ve learned will help you.

“Where do you find clients (or how do I start finding my first clients)?”

The majority of my clients come from referrals. Previous clients usually have connections who are in similar fields of work, or are starting new businesses. If their experience with you has been good, they will not hesitate to refer you. This is why establishing a good relationship with my clients has been a big focus in my work.

If you are just starting out and do not have previous clients to work as referrals, start by letting people know you are looking for freelance work. I generally do not like taking close friends/family as clients, but these are the people most willing to vouch for you as a person and a professional if you do not have existing clients. Also focus on contributing to communities where your (target) client base will be. Be present in these communities, actively provide suggestions and feedback, and have your work or information easily accessible if they would like to contact you. Reach out to businesses and entrepreneurs with insightful feedback that will help their business. All of this relies on you to have a strong existing skill set, so if you are not confident with your skills, work on establishing them first!

“How do I compete with offshore workers, like people in India who charge $5~$15/hour?”

This is a very common worry among newcomers. The truth is, depending on where you are, you already have a huge advantage over cheap, offshore labor. Major businesses will want to be able to communicate and work with you during business hours. They don’t want to have to deal with language and cultural barriers that often come up dealing with offshore labor. That’s something that cannot be fixed when it comes to offshore hiring.

Also, you will often hear complaints about the low quality of work delivered from offshore workers. There are many talented people, even in places like India, China, etc, but more often then not, clients do not get anything near the quality they expect. The cost of living may be lower offshore, but often the low hourly rates come with a cost. It may take 20 hours for them to do what you do in 1 hour, which means the client has to spend $100 just to get 1 hour of work done. In addition, the offshore clients may be inexperienced, they may be delivering low quality work, and they may be billing work dishonestly (which could happen anywhere, really). On top of all that, it’s generally expected that when you hire someone offshore, you give them specifications and they do exactly that. Miss any details, or run into any problems, and they will bring in hacky solutions, so they don’t need to ask clients questions over a 12 hour timezone difference.

How do you differentiate yourself from offshore workers and command a higher rate? Easy. Take advantage of the existing differences between yourself and someone offshore. You don’t have a 12 hour timezone difference, you can provide instant feedback and lower turnaround times. But that’s not what will bring in the big money. Focus on why you are being hired. Does this client just want a new website for the sake of having one, or is there a need they are trying to fulfill? Do they really just want a new billing system? Or do they want to save the additional costs they are paying by using a 3rd party solution? Do they want to lower the turnaround time between transactions? Do they want to bring in more customers to their business? Often times, clients will think they want one thing, but if you dig deeper, you will find a bigger need. Explain how you will resolve this need, and what impact your solution will bring to the business. Focus on the value being provided to the client, not how many lines of code you are writing, or how many memory leaks you fixed. Businesses care about reputation and money. Until you can recognize the value you bring to the business, you are an expense. An expense easily mitigated by hiring someone else offshore.

“How much should I charge?”

How much you should charge is dependent on a few factors. What are your costs for doing this work? Is the client expecting you to be available outside of reasonable hours? How much expertise do you have with this work, and would your expertise bring additional value to the client? Similar to my response for the previous question, how much value is your work bringing? If doing this project will bring the client $400k in additional revenue, it’s certainly logical for you to charge a higher rate, especially if the client can’t earn as much hiring someone else. Also keep in mind that you should almost always be charging more as a freelancer than you make at your typical day job. The reason being that as a freelancer, you do not have any benefits; no bonuses, no stock options, no healthcare coverage, no perks, no vacation days, no sick days, nothing. The time it takes for you to go to the washroom is (probably) money wasted. As a freelancer, you market yourself. For free. You discuss projects with potential clients. For free (sometimes). You pay for any books, conferences, training, tools you need to advance your skills. Every aspect that is taken care of for you in a typical day job is now your responsibility. Taking these differences into account, most freelancers will charge between 80% to 150% more than their day job. Some freelancers will charge more when they find out a client is difficult to deal with, or the project is not something they particularly enjoy. Some will raise their rates if they constantly get more projects than they have time for. I do not do this, but hey it’s your business, charge what you like.

“What is the schedule like?”

As a freelancer, you will have a lot more flexibility than any job you could take. This is what attracts many people to do freelance work full-time in the first place. Don’t feel like working today? Sure. Want a 3 month vacation in Australia? Been there, done that. Want to read during the day and do work at 4 in the morning? Why not? You are your own boss (of course, you still need to show your client respect and be a team player if you work with their employees), set your own schedule, do what you want, just stay accountable to your clients and keep them informed. You will hear some freelancers go through “dry spells” where they can go weeks or months without any work. Given the nature of running your own business, this is normal, and there can be many reasons for that. Their rate may be so high and they only serve a certain niche of clients. Maybe they don’t have a lot of clients to begin with. There may not be much demand if what they do is “seasonal”. They may have pissed off all their clients (ouch…?). There might not be any clear reason, maybe they just don’t have any work right now. Being a freelancer, it’s important to recognize that this may happen to you. You might even have a car accident and can’t do any work at all. Anticipate large influxes of work, or none at all; if you’re able to manage that, you will be fine.

“How do you deal with unreasonable or difficult clients?”

I’m sure we’ve all run into difficult people. Since you are not a salaried employee, whether you work with this client is your choice. You should be able to pull out of a project if need be (you do have a contract right?). Maybe they have too many unreasonable demands. Maybe they’re calling you at 4 in the morning (again, contract?). Maybe the scope of the project keeps increasing and you are not being paid to account for that (need I say it again? Scope should be in your contract and if the scope increases, you can talk it over with your client). I generally get some information regarding the client’s expectations, the project, the people working on it, the timeline, and any processes they may have. You should be able to fairly accurately gauge how working with the client is going to turn out before you sign a contract. If I sense that the client has unrealistic expectations and they are unable to discuss the expectations with me civilly, then this is an early warning sign. There are many other warning signs I look for, but in terms of a difficult client, they generally appear in the form of attitude, behavior, and expectations. I will respectfully let them know that I don’t think we are a good fit for each other, and move on. No amount of money should be able to buy your happiness and dignity (hopefully).

“Do I really need a contract?”

I don’t think I am alone when I say you should always have a contract with the client in place. A contract is a nice, legally binding agreement detailing the people involved, the scope of the project, any timelines, payment terms/costs, non-disclosure clauses, termination of work, and how to deal with unexpected issues that arise. Unless you are a student and are making websites for $500, and don’t really care about getting paid, you need a contract (even if you are, you should get one). Don’t just write it up yourself, hire a lawyer (yes, they can be expensive, but not having a contract will cost you much more). A good contract will save you many headaches down the road, including clients refusing to pay, scope creep, intellectual property rights on deliverables, terminating contracts, etc. There’s a good talk by Mike Monteiro, Co-founder of Mule Design called “F*ck you. Pay Me.” about the importance of having a good contract in place.

Hopefully that clears up some common questions about doing freelance work. If you have any questions about freelancing, feel free to reach out to me.