Iteration: A weekly podcast about programming, development, and design.
JP's Experience
- Minimal
- Often saying "yes" too frequently
- This year I only said yes to opportunities I could deliver on
- Doing consulting work for friends.... 🤔❌
- I come from a design background where I was known as the "design guy". To this day, people still ask me if I can make logos for them.
John's experience with freelance
- I started Freelancing in June 2015 (Small Rails work)
- The last 5 years I've built it into a small agency
- We did over $350k last year
- I've been able to travel, have flexible hours, and pick and choose projects and learning.
Pros of freelancing
- Extra cash (on the side)
- Flexibility
- Lot of different projects
- Less politics
- You have the power to negotiate and capture your full value with no lost efficiency or politics at play.
Cons of freelance
- No paid time off
- No benefits
- No growth opportunities - You have to be a self-starter
- Taxes, paperwork business development
- Sometimes you get boring projects
- Loneliness
- Hard to find work at first
- You have to be paid less than you are worth. That’s capitalism. There has to be a gap between what you cost and the value you provide.
- Moving from project to project gets hard. You need to be sure you really like / want shallow variety.
Getting started
- You need to pick a skill/stack/specialty.
- Make sure you have someone out there who’s paying people for it.
- People need to understand what you do and who you do it for.
- “I build Wordpress sites for dentists”
- “I do Ruby on Rails for medical startups”
- It positions you as a specialist. Specialists have more authority, less competition and make more money.
How to find clients (at first)
- Free or discounted work for Nonprofits
- Upwork / Thumbtack / Craigslist
- Portfolio work that's as close to a real project as possible
- Equity work for startups
- Open source
- Blogging (my top 2 biggest clients were from my blog)
- This season shouldn’t last for more than a year. If it does, you may want to consider a "joby job"
Once leads are coming to you:
- Raise your rate by at least 20% or so every estimate until your rejection rate is over half.
- If you are landing every bid, it’s a bad sign. You are too cheap.
- JP's Formula = Hourly rate at his "joby job" ~ $50/hr — double it or triple it
Billing approaches
Fixed Fee
- Milestone payments
- You get to a point of your hourly being diluted
Value based billing
- Milestone payments
- Understand the business enough to get a sense of the potential value you can provide.
- Ask lots of questions to really understand their business. Skim books, YouTube anything to be able to speak intelligently about their business needs.
- Once you quantify the outcome:
- “You make $300k a year from your website leads now, you think my work could improve that by 20%. That’s $60,000. My services are just an investment of $12,000 that you’ve estimated will give you a return of $60k in your first year”
- So instead of charging $2k for that static marketing site, you can be confident in charging $12,000 - it’s a small investment for the returns the client says they should get. It’s a deal.
- Charge more.
- By pricing yourself “competitively,” you inadvertently signal to them that you’re “average” — and great clients, by definition, aren’t looking for average.
- It takes time.
- My average client lead to close has been about 2-3 months in the last 3 years. The average client revenue has been over $50k per client.
Hourly / Retainer Billing
- Pre-pay is the way I was doing it. Discounts for higher chunks of hours. This worked really well for ongoing development and maintence contracts.
Tools
How to write estimates
- fixed price
- Retainer
- Hourly
- Value based fixed price
Mistakes / misconceptions
- it’s a numbers game. This is false! Don’t spray 300 people with a cold email and no context. I get these constantly. Spend 3 hours researching 3 clients you can offer value too. Build a relationship, be a resource, it takes time.
- Provide a ton of value at a sustainable but low wage.
- Selling outcomes you don’t fully control. Example: I want this rich interactive functionality on a square space site that I can’t give you admin access for. Not having copy, not having design assets, domain access. Etc.
- Fixed price billing with a lack of scope.
- Growing to quickly
- Having a closed mind to unknown domains.
Taxes + LLC's WTF?
- In the states - you have to pay taxes (I retain at least 20% of my income)
- LLC protects you
- Errors and omissions insurance is good to have as well
Links / Resources
- Seth Godin Freelancers workshop
- The business of authority
Picks
