Freelancing, half a year in.

It’s been six months since I first started to call myself a freelancer.
This post is about what I’ve learned so far.

Who to work for?

As a freelancer it’s very easy to say that you’ll just work with anyone who’s prepared to pay you. In six months I’ve realized this isn’t the greatest way to handle yourself and there’s a set list of criteria you should look for from a potential client.

I now have a list of things which can put me off working with a potential client.

  • They’re not a company.

Individuals looking for a developer to create their project tend to be tight on budget and in my experience are harder to work with.

  • They’re not using version control. 

As a freelancer (especially working in a development role)  working for a company which doesn’t use version control and wants you to work as part of a team is an absolute nightmare.  I wouldn’t recommend it to anyone.

  • They immediately try to negotiate your daily rate.

This is huge warning sign for me now. It’s right up there with being asked the question “Are you cheap?”. I remain polite but return with a firm no. Most of the time I don’t hear back from the client, which is probably a good thing.

How to find work?

Pretty much all my work so far as come from three different sources.

  • Email sent directly to digital agencies.

This was the first thing I did when I started freelancing. I got very lucky and within my first two emails got two positive responses and ended up working on a fantastic project for around three months.

  • Search engine traffic to this blog.

Two of my best clients so far have come directly from search engine traffic to this blog. I’ve tried to build a few pages based around keywords advertising my services in the local area. “Freelance PHP Developer” as an example.

  • Recommendations and previous contacts with friends and colleagues.

Six months ( I’m told ) is still very early days in terms of building up a network. My first, and most recent jobs have come from networking relationships. I am still awful at networking and this is something I need to concentrate on more.

How to stay firm with your rate?

A lot of people will find it difficult to understand the rate you charge, and many potential customers will try and negotiate your rate down. I now take a firm stance on this and do not negotiate the rate I give regardless of how much pressure I’m put under to do so.

The simplest way of doing this is to just say no. I have lost work doing this, but the moment you get yourself into a position where you’ve negotiated your rate it’s impossible to work your rate back up. In fact, in my experience, you can expect  the company to try to negotiate your rate down further the next time you work for them.

What should your rate be?

This is the most difficult question to answer, suffice to say when I started freelancing my rate was set far far too low, worse still I allowed myself to be negotiated down further.

I’ve taken the typical path that most freelancers take when deciding their rates and that’s to raise it as the demand for your services increases, I quickly realized that I had priced myself far too low to achieve the level of financial freedom I wanted to. I’ve now adjusted my rates accordingly, but they’re probably still far too low.

How much can you make?

I seriously believe the sky is the limit in terms of my potential earnings. I know I’m still not marketing myself in the best way, and am still treating myself as a commodity, it’s something I’m desperately trying to change, but I’m sure it will come in time.

That being said I’ve earned over £20k in six months from nothing, and if I can do it, you can too!

I’d love you to sign up to my RSS feed, or follow me on twitter. I’ll be positing soon about what I’ve got planned for  2013.

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37 Responses to “Freelancing, half a year in.”

  1. Tino Tkalec

    Hi Alan.
    I just wanted to say that this is a great blog post. I’ve started my freelancing journey couple of months ago and I’m dealing with the same issues you are.
    It’s great to see I’m not alone in this.
    Keep up a good work.

    • Alan

      Thanks Tino. Just had a look around your site very impressed. Did you do the design work yourself too? I notice you are selling yourself as a developer rather than a problem solver. I think that’s the hardest nut to crack.

  2. Ged

    I’m going to start freelancing soon by emailing directly to digital agencies.
    Do you reckon, it’s a good idea to start with pay rate of full time employee with equivalent skill set? I’m from North West England and consider myself a bit above junior dev, so thinking about £100-120/d (which translates to roughly £15/h).

    • Alan

      @Ged I’ll be honest with you and say, no that’s a terrible idea. As a freelancer you don’t have the same benefits as being a full time employee offers you. You’re going to have to deal with things you’ve never done before ( invoicing, chasing payments, finding work ) all of these will take up your time and you need to adjust your rate accordingly.

      I started freelancing by giving myself a “virtual” pay rise of around £20k on my previous job, dividing that by the number of working days in a year and using that as my daily rate. This was far far far too cheap. Especially once I’d started allowing myself to being negotiated down.

      I realize up north is cheaper, but I’ll be honest £100-£120 is far too cheap. I’d highly recommended reading patio11′s blog http://www.kalzumeus.com/blog/, and listening to Brennan Dunn’s pod casts.

  3. Blair

    Good post – especially about holding firm on rate. But if you’ve made £20k in 6 months, put your rates up! :)

    How much utilisation are you running at?

    • Alan

      @Blair Thank you!

      Right now, I’m fairly under utilized, which is something I was expecting as we get closer to the Christmas period. I have a couple of larger opportunities hopefully coming my way soon which will see me at pretty much 100% utilization, and at a much higher rate than the one I started with six months ago.

  4. Akshay Rawat

    Also, I tend to be quite biased in the technologies involved. If its something I want to learn, then I usually pick bigger teams, older code bases. If its something I’m good at, I usually want to start fresh in a small team.

  5. Adnan

    Will you still like to remain as a freelancer? Why not working on your own product? Also, I myself working as a freelancer for a while to keep my kitchen running. I face difficulty to grab quality projects as I am from Pakistan so people expect me to demand less. How do I overcome this?

    • Alan

      @Adnan I’ll be honest working on my own product is exactly where I want to be. I’m trying to overcome the barriers in my own brain at the moment which are stopping me from achieving that goal. I’ve recently launched a small side project ( http://whensgoodforyou.co.uk ) even though it’s not a money making project. It is at least a start!

      I’m not sure how you deal with the Pakistan issue. However to me personally it’s not about where the person is from, it’s about whether they’re going to provide me with the service I require to the standard I want. I understand that it’s going to be tough as developers from that part of the woods have an unfortunate reputation attached to them. You will have to build up trust with your clients, and gain strong recommendations from clients you do work with to show you’re not one of those developers.

  6. Chris R

    Love your post – excellent reading. I’m a bit amazed though: £20k in six months is shockingly little… What do you expect for your next six months?

    • Alan

      @Chris R – Shockingly little sounds well, exciting. I tried to compare my earnings to the national average (which in the UK is around £25k ) and the salary I was earning before I started freelancing. By the end of 2012 I will of earned above the national average, which leaves me 5 months to make what I made before I went freelancing, which is my goal for my first year.

  7. Ben

    Great post. I am slightly scared that you find companies not using any type of version control and your right anyone who tries to bargain you down you should be cautious with. They will more likely be a pain in the arse in other ways too (paying late, feature creep, etc.)

    I think with pricing yourself you need to look at other things.

    @ged – I am in the North West too (Manchester) and your rates seem a bit low. Remember to factor into your rates sick pay, time spent doing admin, holiday pay, time spent finding and chasing clients. meetings.

    The best book I have read on the subject is “Double your freelancing rate” – http://doubleyourfreelancingrate.com/ . It’s a bit of a cheesy title but it goes through positioning yourself to a client and pricing on value delivered to them.

    • Alan

      @Ben Thanks! You’d be shockingly surprised how many digital agencies there are out there, who are earning good money, getting large projects and from big name clients but don’t do simple things like version control. It’s very, very scary!

  8. Arjun

    Hi Alan, I’ve been considering freelancing myself. Isn’t £20k in six months, about $60k per year? I know the base salary alone for software engineers in the US is much higher, generally between $80k to $110k for most companies. At Google, I’ve heard salaries upwards of $150k are common.

    So freelancing really a good choice financially? I’ve frequent Hacker News (https://news.ycombinator.com/) a lot, and there are a couple of people there who’ve made a ton of money off freelancing (patio11 comes to mind.) The rates I’ve heard there that freelancers charge are around $100/hr or more.

    I’m quite new to the whole freelancing world, and I too am rather lacking in connections. I might just be working an open source project first to build a reputation. Anyhow, what are you thoughts on the financial scenario?

    • Alan

      @Arjun

      Yep that seems about right, to be honest the salaries ( if true figures ) that American software engineers earn blow my mind. I know a few developers in London, but don’t know many who are on anywhere near that figure.

      It’s very very easy to charge what you want to charge, it’s much harder to find clients that are willing to pay that amount. Right now, the freedom of working how I want to work, where I want to work, and how much I want to work is greater than the draw of a large salary. If I were to give up that freedom, I would demand a larger salary to compensate.

      Things may change in a few years time, I’m getting older and want a family. If I’m to be a provider for that family, then I might have to give up the freedom for the security being an employee brings, but right now, this isn’t something that even crosses my mind.

  9. Andrew Sinclair

    Really enjoying your blog, in particular your experiences of the business side of freelancing.

    Can I suggest that you keep an up to date LinkedIn profile as I have found LinkedIn to be a great source of work (I too am a freelance developer, although specialising in iOS development). I have had many clients contact me after seeing my profile, also many clients post work requests on the LinkedIn London iOS Developer Group – maybe there is something similar for your line of work.

    Good luck with the freelancing.

    • Alan

      @Andrew Sinclair

      Definitely something again I need to work on. I can see LinkedIn having huge potential due to the number of connections. What’s difficult is to fight your way through the recruiter spam that exists there. I swear I get at least one email a week from the same recruiter who found me on LinkedIn and despite replying with “I’m not interested” and actively trying to mark his emails as spam he still manages to get emails through!

  10. Jordan

    Hi – loved your post! I’m doing a bit of market research for a problem I’m working on for freelancers. I’d love to ask u one or two questions – drop me a line if u don’t mind giving me five minutes. No spam, I promise. Google me – you’ll see I’m legit :)

    Cheers and keep up the good work.

    J

  11. J

    Great post Alan.

    As someone who has freelanced a fair bit (5-6 years) and now frequently hires freelancers, here is my advice on a starting rate (by this I mean in your first six months). Figure out comps for your skill set in a regular, salaried position. Let’s say your a talented jr. dev. We’ll started at $70k a year to reflect the hot juniors market (in the US). That’s about $35 USD per hour. Double that. You have your consulting rate. $70 per hour. Discount it a little to start if you’re unsure or need to build your portfolio. I’m certainly not claiming this is my own formula, or that it is the best. But I heard it somewhere many years ago, and it worked for me for many years. It scales fairly well until you have a very solid network/specialization.

  12. Tom Halligan

    Great post! Congratulations on what looks like a successful transition to freelancing (fingers crossed!) :)

    How are you finding handling legal stuff like contracts and things? That’s definitely an area I need to focus on, so if you have any resources / insight into what the best way to handle this stuff is, that’d make an excellent post as far as I’m concerned!

    Good luck anyway!

    • Alan

      @Tom Halligan

      Thanks for the comment! :)

      I have a set contract which I hand out to clients. Most of the companies accept this, occasionally they want you to sign theres. I’m very very cautious about putting my name to anything and carefully read anything that’s sent. If I’m not happy with a particular clause I ask them to remove it.

      It should be noted actually that the best clients I’ve had so far are those who haven’t wanted me to sign an NDA or complete loads of paper work prior to working with them.

  13. Matt Melling

    Fantastic post! Great to see a fellow Pompey graduate doing well! What did you think of patio11′s recent post about dropping his daily rate in place of a weekly rate/charging based on the potential value to the customer? Can you recommend any particular agencies?

  14. Lucas Arruda

    Hey Alan, thanks for the post. Very helpful insight.

    Sometime ago I was talking to someone I meet through user groups, which I recommend also as a starting point for freelancing. So, when he started freelancing it was mostly headaches and he didn’t make so much money and had some clients no paying or problems like clients with no VCS like you said. But, nowadays, things got much easier from him. Basically he has no website, like you, but he gets all his clients from word spread from his services (which I think is still the best way, along with the blogging) and he set a minimum budget per project, like if the project whole value is less than 10k, he does not even look at it.

    So, while I know this takes some time, he started charging per project/week (which make harder for the client to lower you rate and you get to say only 40h/w), and now he joins less projects, but if the project is 20k and say he takes 2 months, than he is making something about 10k/month and keeping his pipeline full, with those bigger projects, he can also keep rejecting for smaller projects for some weeks while he works and find another good paying one.

    Any way, great post.
    Good luck!

  15. Alan

    @Matt Melling

    Thanks Matt! Every single one of patio11′s post make me question the way I’m working. Which can only be a good thing. At the moment I don’t have too much of a problem with my daily rate ( I will never work hourly ). If I were to increase my daily rate further then it might more sense to work on a per week basis.

    My only concern would be missing out on the smaller chunks of daily work I get from existing clients.

  16. Pete

    Interesting to read about your journey Alan – 20k while getting started is a nice start – you have to take a longterm view of this and I’m sure you can see this has potential.

    As somebody starting to look at bigger freelance gigs, one thing that concerns me is the process of determining project scope and size through whatever planning spec process you use to give your client a budget for how much what they want will cost. The time involved with meetings and planning specs can take eat up a significant amount of hours – I’m wondering how you manage your clients expectations with this and come out in a win/win conclusion? Do you bill planning by the hour? Do you estimate how long the planning component will take to work it out and stick to it? Do you provide a range?

  17. Alan

    @Pete

    So far I’ve been kinda lucky, either the projects have come in fully specified, or I’ve written produced the specification as part of the job working at my daily rate. The only time I really spend working for no money is the time taken to agree that I’ll work for the customer. The rest of the time I charge for.

  18. LariOr

    Thanks, Alan. Could not find a link on your site (found an offer to subscribe, tho :-))

  19. Joshua Valdez

    Great post! I have learned a few of these lessons and its nice to have them all spelled out clearly. I agree, you should definitely charge more. I have a friend who freelances and has $40k contract for around 3 months of work. With more demand from clients and more structure on your part it can become a very nice means of sustaining yourself.

    • Alan

      @Joshua,

      Thank you! I’m getting better at finding larger projects, it’s definitely an easier way of having a constant income. Although I do like the random one off days where I fix smaller bugs and problems.

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