Give your first client a free website.
(a) You get to start out with client who, because of the adverse selection effect, is most likely to be demanding and troublesome.
(b) Your relationship with that client, which may appear peachy at first, is now poisoned because you've sabotaged your rate. Rates never go up.
(c) At the point where you're at your most vulnerable, you end up doing high-stake work for almost no immediate reward.
Let me just throw a couple things out here:
* People who buy professional services for their company are usually not spending their own money. They don't have the same personal relationship to what they're spending that you have to what you're receiving. Put differently: they're not as likely to be appreciative as you think they will be.
(I'm a co-owner of an LLC that buys professional services and this is as true for us, where I'm literally spending my own money, as it is for a Fortune-500 where money is entirely abstracted.)
* Your willingness to do a free project does not make it more likely that you'll get referrals. You think the principal of reciprocity is at play, like Cialdini says. But that's about giving people boxes of chocolates. It's not about sending a strong signal that your work is worth less than everyone else's. The good news is: if you do good work, people will refer you, even if they paid above market rate for it.
* If you can't find people to pay you for the work you do, it's better to fail fast than it is to drag it out.
I have no doubt that many successful freelancers got their start by giving away freebies. And in web design, maybe you need to do this to build a portfolio. I don't know. (Seems like there'd have to be a better way). But if you do technical work, I'd be very careful about starting this way.
However, a new freelancer may find that getting free clients is just as difficult--or even more difficult--than getting paying ones. It's the same process.
In that case they could probably go on Rentawhatever and at least make a few dollars for the effort.
Maybe offering discounted rates is a better way to bridge the gap for someone without a lot of credits.
"Give your first client a ridiculously low price."
The keyword in that sentence is "first" because you don't want to get into the habit of low-balling all of the time but it's not a bad idea when you're getting your start.
My freelance career started when I was offered to bid on a job by a friend who was working for a large sports organization in Ohio. I came in really, really low compared to the other vendors who were bidding (although, at the time, I didn't know HOW low). That one job, which I did very well for a low price, resulted in a client and work I still have to this day. And that client then turned into referrals that got me involved in an entire industry.
I did something similar - I offered to build the foundation of their website (a social networking site) for free as a trial. It only took a few nights and they liked what they saw. Shortly after, we negotiated and agreed upon a rate to continue development.
I left development to start consulting, and in the beginning I still had no idea of a competitive but profitable price stack. However I was very business minded, a week prior to leaving my field I just finished reading Dale Carnegie's book "How to Win Friends and Influence People".
Before I go further, let's stop and take a pause: this is a book that everyone needs to read, especially freelancers. I say especially these individuals because your livelihood is predicated not on a parent company managing image and taking a considerable chunk of the impact if you mess up. That being said, it is vital that freelancers read this book page for page, front and back to get a firm grasp of how to interact with people beyond "Do you need a website? Here's your website. Here's an invoice, alright have a good one". I read this book four times, and I'm reading it once more because in addition to being incredibly insightful: Dale Carnegie has a very conversational way of writing that makes this book an absolute joy to read.
Alright, ready for part two?
I had no idea of a profitable price stack, but after reading this book I had a good idea of how to approach people, propose ideas, listen to their needs and collaborate on a service that I could provide them. Still, I was stuck on what to charge. An idea came into my head, an old one that I'm sure is all over the web, debated from both sides, but an idea none the less. And this is what I told my first client:
"Before I quote you on this project that we're working on, I want to know what you think of the idea of free".
He was hooked, I had his attention. Free is an incredibly powerful word provided your ulterior motive is just. We worked together for three weeks as I helped him build his business, and as the time grew near for my involvement to end I gave him another incentive.
I offered him 5% on the next sale if he recommended a client that signed a contract to procure my services. By this point, I figured out that working on a retainer after concluding a 'sale' and ending a contract with a very happy client would be easier to secure than a rate structure that was predicated on the idea that I might end up having to bill more hours than was anticipated. The caveat was that he give no indication to whoever he would refer to me that he got free services, that was up to his discretion. I did not give him a line, a pitch or any sort of script. He ended up with $375 in his pocket, and a new customer.
He ended up becoming my personal accountant.
I suspect there are lots of nonprofits like this. Or smaller nonprofits that simply don't have websites. Soup kitchens and stuff might not be into the 21st century.
I suspect there are lots of nonprofits like this.
Why not just build yourself a website and put that in your portfolio rather than giving it away. Build a reviews site for some niche.
When I wanted to do some consulting work, I contacted folks I knew from blogging (and other forms of participation on the Internet) and said "Hey, are you interested in buying my time? I know you need X, you know I can do X very well, how's about I X for you?" (Both of them said "X is kind of meh but if you could Y we'd be thrilled", and happily I could Y, too.)
How much you charge starting out is entirely a market question. I'll give you my typical pricing advice for anything: "Charge more." You will have better clients, because cheapskates are disproportionately pathological clients, and your clients will be happier with your work. Price communicates an expectation of value, and that framing is shockingly durable. Incidentally, if they're hiring you rather than an undifferentiated freelancer in X, then the global market clearing price is whatever you say it is.
You can also get inbound offers in a similar fashion. (If I were more interested in them, I'd have a page on my site advertising my availability and making a focused case for hiring me, and I'd optimize that page with all the tricks I use for product pages. And detail exactly how I did it on the page, because that is, after all, a visible indication that I'm good at what I claim to be good at.)
^^^ This! One of my first clients got me at a ridiculously low rate, and has over history been the most demanding client I've ever had.
That said, I used to use this client as a tester to try out different wordings when I've upped my rates, so it wasn't a total loss ;)
"Work for full price or for free. Never for cheap." is the most useful advice on this subject.
I've found my niche contracting for other freelancers (particularly designers) who are willing to pay more because they don't have four other employees and related business expenses to care for with that income.
What has been said about "charge more" holds true as well, I heard it a lot before I started but couldn't figure out "how" to charge more (confidence thing). One fine day I had a fellow approach me and said his budget was x, I told him if he doubled it he would have my minimum rate. He said it was a bit high for him and that we would stay in touch; two weeks later he came calling and met my rate.
He was also one of the many "good" clients I've had. High-quality and fairly priced (for you) work just tastes better...
Oh, and as a rule whatever your initial time "estimate" is, double it and you will get a more accurate number (works consistently for me). Avoid any clients that want "a Groupon website built using Joomla but with a custom shopping cart done in three weeks with a budget of four grand. Oh, we also want to be making money the day of launch in three weeks." (true story)
If you build it well and test it well, the project won't nag you long into the future. It will be done when you are done; I can't stress that enough either. Kind of goes hand-in-hand with the high-quality thing.
Be sure you handle taxes properly too, since I'm a sole-proprietorship I just have a business savings account that I stuff what I withhold. I also keep track of all the things that I can claim as an expense.
(this is the end, I promise) You should also have a way of organizing and tracking your projects; I use heavily customized templates for projects in Emacs org-mode. I write up quotes using it and I also write up the requirements, sprints, payment schedule, backlog, notes, etc... using a project template. I can track my time with it, how much they've paid to-date, and invoice them.
Whatever you use, have a system for tracking and organizing the non-code related material of a project.
Good luck!
It would be a worthwhile exercise to write about it, it would give me a chance to refine some loose ends as well.
When we set up our agency, here's what worked:
- Get your own site set up so that you have a web presence and can start to build a brand.
- You need to build your portfolio, so do a bit of work for cheap/free if you have to. You want to do this quickly, if you do a site for free the client will be more willing to go ahead straight away as it requires little decision making. We did a website for a primary school and a couple of photographers we knew to start off with.
- You're probably going to need to have low prices to start with, as smaller businesses are more willing to give a new business a shot, but won't have as much of a budget as bigger companies. Over time you can decide where you want to take the business and start charging more as you build a reputation. Your aim at this point is to build a portfolio, so you can charge more later on.
- Classified ads on Gumtree or whatever the equivalent is in your area. We met two of our biggest clients through classified ads (just be honest, link to your site and try and get across your ethos).
- Reach out to personal network, previous employers etc... they already trust you (hopefully) and may have work that can keep you going.
- Get involved with a co-working space, this has 3 main benefits: 1) regain some of the social element of work, which you may have lost if you previously worked in an office environment. 2) Meet other business owners and freelancers that can offer advice and are a good sounding board, and interesting people usually too. 3) You might even get work from other business working at the same space. We've got a couple of clients as a result of using a co-working space.
- Cold calls! I could write a whole post on this, but basically, try and figure out a niche and what your hook is; Why are you going to go after a particular niche? Have you worked in this industry before? Can you offer a service that will add value to them? Are you in their area (geographically)?
Remember this is one of the hardest bits of going it alone but once you gain some momentum and build a portfolio it will get easier.
Say who you are: "Hi I'm [name] calling from [company], we're a web agency nearby that specialize in X."
Note you may have to repeat this step more than once as you will most likely get through to a secretary. If this is a totally cold call (you've not spoken to the person before, you don't know their name) you should make it sound confident and like there shouldn't be any reason not to put you through to how it is you need to speak to. If you don't know who you need to speak to, ask for a generic title, don't be afraid of asking too high (e.g. "can I speak to your CTO?")
Hook: "I've just been looking at your site / I spoke with someone last week / We met at a trade fair / I know X, who apparently is an ex-colleague of yours / We've just done a website for [a key competitor of theirs] and wondered if we could do something for you."
Reason statement: Why should they be interested? "We have a new web design service we've aimed specifically at X"
Key questions: If they sound interested, figure out how important this could be to them. "How do you update your website currently? / How much is X costing you? Have you considered integrating your website with X?"
The above would be easier if you have a specific product, but if - like us - you're a service-based agency, you'll have to play it by ear a bit, or maybe create specific products for industry niches. I'm not a natural salesperson at all, but one of the first things we did when we started our company was to invest in a training day from an extremely good salesperson in our network. It's paid for itself many times over.
One of the hardest things is to keep motivation when you have a list of phone numbers in front of you. This is a game of numbers, sooner or later you'll call someone who is currently after exactly what you're selling. In order to do maintain enthusiasm, 'visualise success', such as what the potential new business would do for your company, for you personally and professionally.
Obviously there is a lot more to this. Does anyone else have any other tips?
Confidence.
If you don't have it, get it. You can't pick up women or clients without it.
I started with getting phone numbers from women. Detach your self-presentation from your inner self and look on this as an acting exercise. Mentally model what you'd look like if you got phone numbers from attractive women all the time. Look at scenes in movies with characters you like. Practice what you come up with on attractive women. Change your presentation a bit and observe the results.
Done correctly, this process results in a lot of phone numbers. By itself, it won't get you laid a whole lot. However, it can give you a framework for practicing a confident presentation in a context where you are faking it. Also, this happens in front of somebody who already knows they have something you want.
RentACoder has worked very well for me, I rarely use the site to get work and instead get referrals from previous clients. It was painful working essentially for free in my first two weeks, but you make up for it pretty quickly.
One thing I would have done differently is to shout from the rooftops, right from day 1. I only recently took advantage of the likes of LinkedIn to find work, and this has also worked really, really well. Keep building your list of contacts, shout out to everyone you know that you're available and this is the list of what you can do.
Charging is simple: when you don't have many clients, drop your prices. As you get more and more work coming in, raise your prices. Keep doing so until your work drops off, then drop your prices a bit, and keep doing so until you get work. I was terrified the first time I told a few clients I was increasing my rates, I thought they'd all desert me! Break through this psychological barrier, the rewards are there for you if you do :)
Finally, get prepared for the fact that from time to time you're going to have to wait longer than you want to get paid. I've yet to get properly burned, but have definitely had to wait to get my cash from time to time.
Using Rentacoder to build a referral network, which you end up mostly relying on, seems like a fine strategy.
I have the opposite question: How do I find good freelancers?
1) Make a nice portfolio. That's the #1 thing people will look at on your site. Do a free site for a charity if you have nothing to show (do your homework too - there's a lot of local business people on the boards of charities).
2) List what you do, explicitly. Don't be afraid of being verbose. You would think most people would assume if you can do a Wordpress site you can probably do Drupal, vanilla HTML, etc. They will not.
They also don't know industry terms, so speak plain English. For example, don't say "I'm going to install a content management system", say "you'll be able to change the text on your website any time you want."
3) Don't underestimate LinkedIn. Make sure everyone you know is aware of what you do and that they can hire or recommend you. Leave recommendations for others.
4) Following on 3, scratch people's backs online. When you order lunch, leave a review on Google Local or Citysearch. Do this for every service you buy - the vet, your doctor, etc. If they have Twitter, mention the great service you just received at @joesplace.
5) Scratch people's backs in the real world. Want to know the secret to networking? Send other people business. If something comes in that's out of your range (e.g., logo design), send it to another firm. You'll absolutely get their attention, and they'll probably reciprocate the favor.
Following on this: other firms are an excellent source of business. There's a ton of print and graphic designers who can't code, and need someone good to pair with. So get good at PSD -> Wordpress, Drupal, etc, and you can always find work.
6) Pricing. As Patrick said, "charge more." If you need a number, start with $50 or $75/hr and go up as you gain experience. Make sure to offer firm estimates when needed (but not without detail! Mockups is worth the $100).
Good luck!
I would try save at least half of everything you make. First, 1/3rd should be saved for taxes. Second, save at least 1/6th for misc expenses and everything else. Second, look into tax deductions, there is a lot of associated costs with running a freelance business that you can deduct and save a lot of money. So get a system together for keeping track of expenses, ie gas mileage traveling to a client, cost of new computer hardware, if you work from home then you can deduct the percentage of space your office takes up from your rent (not quite that simple), and electricity and internet, etc etc.
Invoicing is another thing that is a hassle. Keep track of hours everyday and stay on top of it.
The best advice I can give is to really treat freelancing like a business and get a system setup that works for you. Doing business/administrative stuff is not as fun as programming by any means, but the headaches of not doing it up front will be much bigger.
Best of luck to you.
I also did pro/low bono work for organizations with lots of members -- it's a good way to get your name out b/c you're identified as a potential local resource.
Most people/orgs that I work for want fixed pricing -- I handle that by writing up an estimate that breaks down each task/feature, how long it takes to implement that feature, and my hourly rate. That way you still give them a set price, but you get the hourly rate in their heads, so you have a basis for pricing changes/enhancements. You can also give first-time clients a "first project" discount -- that way they are more inclined to hire you, but also have an idea how much your "real" price is for future work. If you are really good, they will hire you again.
For an hourly rate I think the advice already posted is good -- I started low and bumped up my rate with each new client. I typically charge for-profit companies more than individuals/non-profits. If you think your rate is too high, it's probably right on target. :) You can always renegotiate down if the rate is a dealbreaker, but you can't renegotiate up.
Scope creep can kill you -- in my estimate I write as specifically as possible what I will do (based on requirements discussions), and more importantly what I WILL NOT do. You can't catch everything, but that goes a long way toward resolving conflicts. When there's a material change/addition, you can then price that new task accordingly. People will take advantage of you if they can get changes/additions for free.
A good web presence is important -- I get calls from out of the blue from people who have seen my web site, and those have turned into long-term relationships. Do some SEO to make sure you're visible to your local area.
Here are some good resource websites: http://freelanceswitch.com http://workawesome.com
I go to an art and design college so it is probably easier for me to get connections for work, but here is what I've done as a student. Making friends with staff and faculty has been of a huge benefit to me. I've gotten a couple small jobs, a work study and an internship simply by being friendly to other people in my major, and staff at the school. A teacher in my program who I took a two classes with saw an art piece I did (web design related) at an exhibition in the schools gallery space, and referred me for a flash job similar in nature to another client of his that he didn't have time to complete. I got a work study at my school's in house design firm as a referral from a student in my program who knew my skill set. I also got an internship this summer in NYC as a result of being casual friends with one of the study abroad staff. In the spring I attended a Flash Developer's conference, and made connections with several people there, and one of them whom I'm communicating with now seems like a really promising opportunity for some contract work.
This should likely take you a couple months to finish, if you're putting the quality in I'm talking about.
Now you can do these for free for someone else, but that makes the relationship a hard one to transition to paid eventually.
2> Don't ever charge low amounts of money. The people who offer work for that amount are often horrible to you. I'm not saying start out charging $150 an hour, but get far north of $20 an hour for any sort of development.
3> Borrow or beg a standard contract from someone else. Include cancellation clauses, so the manner in which a cancellation occurs is dictated by prior agreement. Make sure you include what payments are still due, who gets what rights to use code or already finished products, etc.
4> Just start! Seriously, you'll learn most of this by doing. Remember though, these people aren't your boss like at work, they're clients. If they say jump, you need to make sure you Really should be jumping that high. Oftentimes, they'll make outrageous demands and the first alternatives that come to mind aren't the only ones.
5> If they ask for extra work: Attach price tags to it. If it matters to them, they'll buy it. If it doesn't, they won't.
- Make some apps on your own, build a portfolio. Just 1-2 should do it. There's google appengine for free hosting.
- Try Elance.com, i've had better luck and more pay per effort on projects there.
Also send me an email with your hourly rates.
You should charge twice the hourly wage you'd make working for someone else. Some more details about why: http://antipode.ca/2009/what-your-time-is-worth/
My advice is to find your niche. Do something different. When you bid on something that has a perfect fit to your skills you will have an advantage. Get in contact, build a rapport by responding fast, thoroughly and accurately. If possible, send some sample work or ideas on how to solve a problem. Try and bid on something you are likely to win, and always bid on a project that when you look back, it will seem like a stepping stone in what you learnt or experienced. Don't bid on dull jobs or those that require little skill. There are plenty of people around for that already. Be smart.
If I started over, in hindsight, maybe I would have taken a different route, by researching companies and building a network of contacts, e.g. through HN or Linkedin. I would be more confident about my skills too.
One last tip: work hard and read a book on self-motivation. Good luck! :)
Treat it as a client project and be willing to put some money into it to keep yourself committed and ensure its success.
Once it launches, you have an instant portfolio and hopefully some Github contributions that come out of it that you can point to.
This is the route that I am going with. I'm about 60% done with my app.
Building a website and writing a blog helps too. Lots of time people have contacted me through my blog for work.
Best of luck
How much time do you have for freelance work? What are your rates like?
You could also scrape craigslist and get your first initial gigs that way.
