
Ask HN: What mistakes did you make when starting as a consultant/freelancer? - kartickv
What was the specific mistake, what did you learn from it, and how did you change the way you do business as a result?<p>For example, I was told by someone who started a project without taking an advance, only for the client to decide not to pay. So he now refuses to take on a project without at least 30% advance.<p>What lessons did you learn the hard way?<p>I&#x27;m setting up my own consulting practice: kartick.org and would like to learn from other people&#x27;s mistakes rather than repeating them myself.
======
gk1
Longer write-up here: [https://www.gkogan.co/blog/how-i-learned-to-get-
consulting-l...](https://www.gkogan.co/blog/how-i-learned-to-get-consulting-
leads/)

Some things I learned through mistakes:

\- Charge more.

\- Travel like a professional and bill the client. For my first business trip
I used airline points, stayed at an Airbnb on my own dime, and even refused
the client's offer to reimburse me. Stupid. (Full story here:
[https://www.gkogan.co/blog/stupid/](https://www.gkogan.co/blog/stupid/))

\- If I'm not enjoying the work, request a change or move on. Don't just
"tolerate" it and chug along. One of the greatest benefits of consulting is
the freedom to chose whom you work with... Take advantage of it.

\- Remember who the client is, and don't get too involved with their
subordinates.

\- If you don't feel "Hell yes!" about taking on a project or prospect, just
skip it. It's not going to get more interesting over time.

\- Find a great accountant. Fire bad accountants fast (and lawyers, and other
service providers).

\- Tell the client the hard truth.

\- Impostor syndrome is normal. Get over it.

\- Stop trying to go above-and-beyond all the time. Do what you were brought
in to do, and do it exceptionally well. If other opportunities come up,
suggest them as follow-on projects instead of just doing extra stuff for free.

\- If you're clashing with an exec at the company, tell the client, instead of
just backing away from the project.

\- There are hundreds/thousands (depending on specialty) of potential clients
out there, you just have to find them. So don't worry if a deal falls through,
don't envy other consultants, and don't take on bad projects out of
desperation.

~~~
santodante
How do I get over the mental barrier of charging more than $100 per hour?

\- I'm a junior developer and I mostly freelance for larger companies.

\- I feel like $100/hour is the industry standard and if I charge 150-300 I
need to do work that requires managerial work.

\- 300+ comes from charging a percentage of revenue increase or creating such
a narrative, which often requires additional business and strategic
consulting.

\- On the flip side, I enjoy coding and want to avoid additional managerial
and business consulting as much as possible.

~~~
onreact
Do not think in hours. You are not a worker in a factory. Consider the value
you deliver. When you deliver twice the value in the same time you did a year
ago charge twice as much.

~~~
ghaff
It does depend. When I was a consultant, we tried to charge based on value (by
engagement). OTOH, clients often still thought in terms of hours. If we were
on-site for one engagement that was only going to take half a day, they'd
often try to hook us up with some other group as well given we were there and
had the time. (Typically we'd go along as these were long-time clients.)

And some areas like law are very hourly-based. The one time I did some legal
work it was strictly based on time. (At a very good hourly rate including
travel time.)

~~~
onreact
Yeah, true, that may happen. Ideally you get a combined payment by hours with
a bonus for performance. That is often a bit complex or tricky though.

You mitigate the risk of getting paid not enough in case the hours spiral out
of control while still getting paid a lot when you outperform expectations.

------
im_down_w_otp
Setting my rates too low.

Here's what I figured out those many years ago. Clients who are cheap are also
really into wasting your time and trying to micromanage the project. Clients
who will pay a lot more also give you latitude to do your job (after all
they're paying you to be the expert).

Keep jacking up your rates with each new client until you hit a ceiling.
Whatever you're charging now, without even knowing what it is, I'm certain
it's too low.

When I got started I billed $35/he. When I ended 5-6 years later I billed
$300/her. Now in what very limited ad-hoc consulting I do, I bill
significantly more than that.

~~~
chirau
Is it better to charge per project or per hour?

~~~
chrsstrm
Per project is dangerous. Consulting clients will change their minds
frequently and you'll want to give them the latitude to do so, which means you
simply can't estimate the time needed to complete a project without adding
X00% on top to compensate. No one wants to have the "this is out of scope, I'm
happy to do it but we need to talk about an amendment..." conversation.

Per hour is not adequate for this type of work; you're delivering a product or
service that will increase your client's bottom line, you're not a seat-filler
who punches a clock. I charge in the smallest increment of time that I believe
I can provide a meaningful impact or deliver a complete solution. When asked
for a quote I translate my billing into weeks, as in $X000 per week.
Accounting for admin tasks and paperwork, back and forth emails and phone
calls, plus showing off the work completed and waiting for approval/notes, a
week often seems like not enough time (I can't count the number of times a
client asking for a simple font change took literally a week to order and get
approval on). There are very rare instances where I know I can accomplish a
task in days instead of weeks and if the client asks, I will bill in days
instead.

"My rate is $X000 per week and my initial estimate is that this will take XX
weeks to complete. I require an up-front retainer of X weeks to get started
and I bill every two weeks after. Who should I address the initial invoice
to?"

I would typically never reveal this tip, but here it goes: "I bill weekly and
my normal rate is $X000. For you I would be happy to reduce that to
$X000-20%." The client is told up front that they are getting a discount
without having to ask for it and the Discount line item on the invoice(s) very
much help in getting that invoice paid faster. The secret is that the rate
quoted is always 20% higher than what my ideal number is. I make it rain
discounts on everyone.

No one wants to have the rate conversation but I've noticed that clients who
don't shy away from that talk or flinch at your rate will not be a problem.
Clients who complain that you cost too much will be a problem. Politely
suggest you are not a good fit for their project and end the call, you're
better off. If you get to the point that your non-flinching clients say yes a
little too fast to your rate, increase it. You want a little resistance, but
not much. Saying yes too fast means you need to charge more.

And lastly, this is not about what work "costs" or "market rates", this is
about what your completed solution is worth to your client and how much it
will increase their bottom line. You're playing a different game so stop
charging like you're mowing lawns or digging ditches. Charge more.

~~~
gk1
Strongly agree with this, over hourly or project-based. I do monthly instead
of weekly, but idea is the same.

One thing I disagree with is the automatic-discount thing. Firstly, I think
it's cheesy. Makes me think of street vendors saying "...But just for YOU, I
have a SPECIAL price!" Secondly, I think it cheapens the perceived value. As
in, "Why is Joe throwing around 20% discounts? Is he desperate? Is he not
confident in his abilities?" Etc.

~~~
fastbeef
“My ordinary rate is X000 per week, HOWEVER I’d love to work with you/this
project/this stack/this industry so how does a 20% discount sound?”

~~~
giancarlostoro
I think I get what he was saying. I would say the discounted number instead of
saying anything about percentages. Round up whatever that number is to nearest
hundred. Saying $x748.35 is your weekly rate does sound kind of sad versus
$x800. As an example. Still sounds professional.

~~~
HeWhoLurksLate
Or $750, for that matter. (Mind you, if they take $800, good for you!)

------
super-serial
I tried freelance and realized I hate it more than any other type of
programming work.

I can tolerate being an employee where I do what I'm told. After a month I get
a feel for the environment so it becomes low stress and then I can keep my
head down programming. Or I can tolerate selling software or having a SaaS. If
I'm CEO I decide the direction of the product and then just have to handle
customer support.

But the BS and stress of dealing with clients, contracts, undefined specs and
getting paid... I have no f-ing idea how people tolerate it. So good luck with
that. It took me way too long to figure out that I absolutely hate working as
a contractor.

~~~
JUSTed
You should only have to do that in the beginning and strive to earn more so
that you can hire an accountant or a firm to keep the booking and calculate
your taxes for you. Invoicing is a matter of minutes and some apps even do it
for free. Once you've set up your templates for each type of contract and
document, you should be good to go. The only true problem in freelancing is
generating new (good) leads. That's it. Admin stuff is a piece of cake with
today's technology.

~~~
swah
> Admin stuff is a piece of cake with today's technology

Do you mean something like deploying every client with the same stack which is
easy to admin? I noticed I started this freelancing thing not giving a second
thought about how I would mantain systems running for my clients. I should at
least include some kind of monthly fee... (otherwise documentation so they can
admin it..)

------
epc
Didn't charge enough.

Didn't market. Didn't network.

Didn't constantly hustle for clients.

Didn't outsource scut work.

Didn't down tools when clients were slow to pay.

Didn't develop/maintain a backlog of client work.

Didn't reject fixed price contracts.

Didn't renegotiate when projects changed beyond contracted scope.

Didn't filter free consults against probability they'd turn into a contract.

Didn't have my heart in it (and have since stopped).

~~~
threwawasy1228
What did your hustling for clients consist of? Like I get the pounding the
network pavement, everyone recommends that, but beyond that I never really get
what it is that people do. Like do you just cold call people or do you
entirely go through your network? What specific situations do you place
yourself in where you can hustle up work?

~~~
estsauver
Maybe a couple examples would explain what I think people mean. You're getting
dinner with a friend, and they mention their new friend just started a company
and is looking for some people who do X. You don't really do X, you do Y, but
a lot of people who do X also need Y.

On the 0 to 10 scale:

0: "I don't really do X, thanks for thinking of me."

3: "Hey, I don't really do X, but he may need Y. Let him/her know if they need
Y they can call me."

5: "Oh, that's neat. Why don't you introduce us, I'd love to meet them. "

8: "Oh, cool, what's their name/email? Can I mention your name and reach out?
"

10: "Cool, let's invite them to grab a drink with us after dinner. What
neighborhood do they live in so we can go somewhere convenient?"

~~~
mdorazio
Important to note that implicit in this example is that you're meeting with
friends/acquaintances who are in positions to refer you to this kind of work
on a regular basis. That's the other side of networking - if you're not a
naturally outgoing person it means putting in the effort to socialize with the
right kind of people regularly and make sure they know what kind of work you
do / skills you have.

~~~
cosmodisk
If people don't like doing it,then they need to make sure the entire internet
knows about them: bligs,articles, etc. This is one of the ways for introverts
to deal with it.

------
mattferderer
Hire a good tax person immediately. Maybe hire 2.

A significant amount of your income earned is gained through having someone
walk you through handling taxes & health insurance. I'm not suggesting
cheating on taxes. There are common practices such as knowing how to best
incorporate your business for your situation. How to best pay yourself
(dividends vs income) & how to handle your personal & company expenses. This
can easily make a difference of between 20-30% of your income.

By a good person, I mean someone willing to sit with you for over an hour &
understand you family situation, what expenses you have & what expenses you
plan to have as a business. Someone who will also sit down with you once or
twice a year & re-discuss as well.

~~~
sjy
What country are you basing this advice on? I think it’s good advice, but if
your income can increase by 20-30% as a result of optimising your business
structure for tax purposes, that’s a dysfunctional tax system. I’d like to
believe that in some countries this advice is not necessary.

~~~
mattferderer
Apologies. I should have clarified. United States of America.

I don't believe it's dysfunctional for this particular reason. There are for
sure trade-offs between simplification & trying to optimize for the best
outcome. A simpler tax code would be nice but then people on all sides of the
political aisle would start saying we should really give X a break for Y
reasons and that's how it seems to get complicated.

There is literally a 20% tax break for most small businesses this year in the
US.

Healthcare can be cut in half if you are below certain requirements but make a
$1 more & you pay the whole bill. This one I agree seems silly. Though it's
maybe to simplified & should be more complex with a sliding scale.

A popular move for freelancers is to start an S-Corp LLC where you pay
yourself a fair wage compared to others in the industry. This money gets taxed
hard. Harder personally for you than if you worked for someone else. You can
pay yourself dividends though with any extra money your earn as long as it's
less than your wage income. This money gets taxed much less.

How you invest your money is also taxed all sorts of different ways.

Note - I'm not a tax professional & the above is just my understanding.
Someone who is a professional or has more experience would give better advice
hence my original post.

~~~
antaviana
It’s not a crime if they don’t catch you. But ensure that your taxation system
does not have rules about transfer pricing to expressly prevent tax avoidance.

The cheaper (with AI and automation) it gets for IRS to chase for transfer
pricing violations, the more likely it is to get a fine.

~~~
HeWhoLurksLate

       It's not a crime if they don't catch you.
    

With that mentality, you're as good as caught, anywho.

------
sigmaprimus
My biggest mistake working as a freelance consultant and truth be told still
one of my biggest weaknesses is under estimating the the amount of work a job
will require. I now tell myself any time I plan a project, whether for myself
or someone else to double my estimate of the work required.

Many times it wouldn't even be my underestimating but rather the clients
changing their plans halfway through and I would end up losing out rather than
risking having them give me a bad review.

It is always better to estimate high then charge less than the other way
around.

If you don't get a job because your too expensive don't be too upset, don't
sell yourself short. IMHO it's better to not get the job than to work your
fingers to the bone, miss out on other jobs and get burnt out only to go broke
in the end.

~~~
Pandabob
This is a great point. I've slowly started to believe in the planning fallacy
[1] and that humans just aren't that good at estimating the time that it takes
to do a given task.

The freakonomics podcast had a good episode on the topic this year [2].
There's an amusing quote by Daniel Kahneman in the episode that brings me some
comfort: "If you realistically present to people what can be achieved in
solving a problem, they will find that completely uninteresting. You can’t get
anywhere without some degree of over-promising."

[1]:
[https://en.m.wikipedia.org/wiki/Planning_fallacy](https://en.m.wikipedia.org/wiki/Planning_fallacy)

[2]: [http://freakonomics.com/podcast/project-management-
rebroadca...](http://freakonomics.com/podcast/project-management-rebroadcast/)

------
rwmj
I thought "I'm a great programmer so I'll be a great programmer-consultant".
In fact they are two separate sets of skills, and if you don't have the soft
skills around consultancy like networking for clients, dealing with payments,
and smoothing things over when they occasionally go wrong, you'll need to
acquire those skills.

Also get a good accountant. There are lots of terrible accountants. Literally
I had one who forgot to file my tax return - _you had one job!_ \- and I ended
up paying a huge fine for his incompetence then trying to sue him to get it
back.

------
nlh
Everyone’s talked about charging more but let me add a vote specifically for
dealing with credit risk - it’s real.

I worked with a lovely but cash-strapped startup who really needed my help,
and I made absolutely certain to collect payment up front as a condition to
working with them. I billed on the 1st of the month for the upcoming month and
it took away all stress around (their) cash flow.

It ended up being a really fun engagement that lasted 6 months, and when they
told me they were really tight on cash and had to stop the engagement in 2
weeks, it was zero stress on my part (because they’d already paid for those
two weeks).

Chasing a client for money is one of the worst aspects of consulting and I’ve
just decided not to let it happen again. I’ve been on both sides — the
consultant trying to get paid, and (unfortunately) the client who didn’t have
enough cash, and it’s agony for everyone involved.

------
dceddia
Just a few hours ago I saw this post on Product Hunt: "Freelancember is a
collection of 31 gifts for freelancers, one for each day. Templates,
checklists, guides how to get better clients, raise your rates, etc." Might be
helpful!
[https://www.producthunt.com/posts/freelancember](https://www.producthunt.com/posts/freelancember)

Some other folks mentioned taxes -- I highly suggest reading the book Profit
First and implementing the system. I'm not a freelancer myself, but I'm solo &
self-employed, and it's such a relief to have a pre-destined pile of cash to
be sent off to the appropriate authorities each quarter.

~~~
sabon
Freelancember has listed most of the mistakes indeed, along with the solutions
on how to solve or avoid them.

Example: [https://freelancember.com/excuses-for-not-raising-your-
rates...](https://freelancember.com/excuses-for-not-raising-your-rates/) \-
how to deal with raising the rates and not ending up stuck at the bottom
level.

------
daxfohl
Staying too deep in tech.

As a consultant your number one thing is making money. Find high paying
clients, establish good relationships, do good work but don't get too far in
the weeds of tech stuff. From everything I've read and experienced, deep
technical work doesn't pay well or market well. Dumb stuff like setting up
Magento is where the big money comes. People who are mainly technical seem to
do better at companies. There are of course exceptions.

My business did not succeed. I still enjoyed the three years I spent on it. I
got to work with lots of different things that I would never have had much
chance to do otherwise, and get paid for it. I ended up going back into
industry though once my primary client had to pull back my hours, and so far
am happy enough with that decision too.

~~~
jklepatch
I am sure Magento pays well but I don’t think it has to do with being more
simple.

Ex: wordpress developer vs react / frontend dev, who makes more? React /
frontend.

This being said, for really high paying consulting gigs, i think that its
definetely not in tech but in sales / marketing/ strategy.

~~~
AlchemistCamp
Stephanie Hurlburt talked on the IH podcast about doing 7-figure contracting
deals for C++ graphics work (math, C++, GPU optimization and various technical
work).

[https://www.indiehackers.com/podcast/044-stephanie-
hurlburt-...](https://www.indiehackers.com/podcast/044-stephanie-hurlburt-of-
binomial)

~~~
daxfohl
Like I said, there are exceptions. To do this you have to be a well known
expert in a highly valuable skill. I'm sure Troy Hunt does fairly well in
security consulting on Azure for instance. Being an expert in something
challenging but that doesn't make the client money (say Haskell, or whatever
the distributed DB flavor of the month is) doesn't pay beans. Nor does knowing
50 languages or web frameworks: the client only cares that you know _one_.
Determine up front what you want to specialize in, if you go this path.

~~~
AlchemistCamp
> _Nor does knowing 50 languages or web frameworks: the client only cares that
> you know one_

I 100% agree with this. Specialization is worth it. Nobody cares if you're
fairly close to workplace competence in ten things, but people will beat a
path to you door (or inbox) if you're world class at one.

I'd also add that when you add to your skill stack, make sure it's
complimentary skills you can use with your existing strength, not alternative
skills that accomplish the same thing.

[https://youtu.be/bIpgUmn5yK8](https://youtu.be/bIpgUmn5yK8)

------
fyfy18
Not when I started, but after I'd been contracting for five years I ended up
in a contract where the client ran out of money so couldn't pay me. I figured
that because I was hired through a recruitment agency I was safe, but
apparently not.

For those who aren't aware 'contracting' in Europe refers to what is
effectively a short term employee who charges X/day. Clients usually pay net
30 - 60 and often you work through a recruitment agency. The agency is
supposed to vet the employer and provide a good source of candidates, but for
the fees they charge clients (10-30%) IMO they don't provide anything near
that value.

This led to mistake after mistake on my part and now the client owes me £40k.
I ended up working with a soliticor, and we have now agreed on terms for then
to repay me, but I ended up with a pretty bad deal (it's effectively an
interest free loan to them).

I've learnt quite a lot of lessons though:

\- Under no circumstances work for free, if a client asks you to, it simply
means they do not value your time. There's plenty of businesses who are
willing to pay you so it's not worth the hassle. The only exception I'd say is
if you are getting founder level equity (10s of %) in a startup you believe
in.

\- I had a bad feeling about this contract from my first week when I got in
the office, guess I should have listened to my gut feeling :-)

\- If a client is putting a lot of stress or pressure on you, fire them.
There's plenty of good clients out there.

\- Do not ever work for free
[https://youtu.be/jVkLVRt6c1U](https://youtu.be/jVkLVRt6c1U)

~~~
aliswe
> Clients usually pay net 30 - 60

What do you mean by this?

~~~
chiph
You'll also see terms like "2/10 net 30", which means if the client pays in 10
days, they get a 2% discount. Otherwise payment in full is expected by day 30.
Your accountant would have a "Sales Discount" account to record it as an
expense if they get you the check early.

------
amyhoy
Over a decade, I went from doing grunt work freelancing — data entry, HTML
conversion, etc — to charging about $500 an hour as a true consultant.

Freelancers do what they're told. Consultants advise the client on what _they_
should do.

When you start out, it's natural to think you're Doing A Thing (whatever skill
you have & want to charge for) rather than Running A Business. I started out
thinking "I'm here to make web pages and get paid for it!" and that made it
very easy for people to take advantage of me. I would do exactly what the
client asked for and then they would complain about it.

By the end of my consulting career, VPs would come to me with their ideas and
I'd feel free to say "I'd love to work with you, but that idea won't fly.
Here's what you SHOULD do." And they would go with it!

I realized that I could have positioned myself as the expert much earlier on
in my career, and saved myself a lot of stress of trying to do every little
thing the client asked, no matter how foolish.

The business mindset also means service agreements with initial deposits, work
schedule with intermediate payments, kill fees and more.

I now run a product biz — the star being a time tracking SaaS for freelancers
[http://nokotime.com](http://nokotime.com)

Turning my catch-as-catch-can freelance business into a real consultancy is
what made me able to charge more, work fewer hours, and have less stressful
projects (bc I was the actual boss rather than a tool to be used by the
client) and build the SaaS on the side.

Someone else mentioned Freelancember. Guess who made it? Me! Based on all my
mistakes and years coaching others to level up like I did.
[http://freelancember.com](http://freelancember.com)

I highly recommend the book The Secrets of Consulting, which is like "the
inner game" rather than explicit stuff like contracts, taxes, etc which are
covered elsewhere.

------
harrisonjackson
Don't charge per project - charge for your time. The only exception I'd make
on this rule is sweat equity and that's because I'm well aware of the gamble I
am making with my time. Still charge a token amount of actual $$ for sweat
equity unless you are a co-founder.

Do not overengineer anything.

Charge for your time - 3.6x what you are currently charging ¯\\_(ツ)_/¯ no idea
what that is. Don't work for clients that blink at that price at all.

Take the high road in every possible situation and never burn a bridge - your
life blood will be repeat business and referrals. Your community and network
are tighter than you realize.

At least 20% of your time will be networking, sales, and meetings - buffer
your estimates an extra 30% with that in mind plus whatever other buffers you
already told yourself you'd do.

Be over enthusiastic, be your own hype person and the hype person of the
project you are working on, still under promise and over deliver though.

~~~
aliswe
> Charge for your time - 3.6x what you are currently charging

Don't you think 3.14 would be more scientific?

------
mkbkn
Many (still do some) -

\- Not booking myself in advance. \- Taking rush jobs. \- Not limit myself to
a set no. of hours \- Absolutely no systems in place other than a Calendly
meeting link that I set up very recently. \- Not able to estimate the time I
need to complete a task. \- Not producing enough content so that I could get
pre-sold, inbound leads.

e.g. I'm a direct response email copywriter and I've been told by many gurus &
coaches to write emails on a daily basis and publish on the web. Yet, I've
been slacking off.

Result? I've to reach out to prospects and try to sell them on myself. Not an
easy thing to do.

------
daxfohl
Got too attached to my project.

Your project isn't yours, it's your client's. I turned down better paying work
because I had become so invested in the code. I was afraid to ask for a raise
for the same reason. Finally my client stopped needing more features and that
was that.

Your code is just a means to an end. Don't get attached to it or to a client.
You are running a business. Keep good relationships, but be ready and able to
cut ties.

------
dfsegoat
Embarrassing but honest:

Pay your taxes on time (quarterly), assuming you are US based and on a 1099.
Put that money away as soon as possible with ea. payment - just like an
employer were withholding it.

I managed my finances poorly, and it gets increasingly difficult to catch up.
All good now but was the most expensive lesson I learned.

Edit: seeing other replies here, I would meet with a tax/financial person from
the start.

~~~
mehrdadn
How do you know how much money to put away until you're at then end of the tax
period and know the total tax amount? Do you just estimate based on what you
expect to earn?

~~~
ScottFree
> Do you just estimate based on what you expect to earn?

I echo the advice to get a good accountant, but "estimating" is what I've been
doing for the past 5 years. I had an unexpectedly good year a few years ago
and wound up underpaying on my quarterly taxes. The IRS and the State of NY
both charged me a small fine and I just sucked it up and paid it. It's quite a
racket they've got going on considering income tax was supposed to be a
temporary measure to get us through WWI.

~~~
mehrdadn
Interesting, do you have a link to more reading on this? The Wikipedia page on
the 16th amendment doesn't seem to mention WWI as the reason.

------
carapace
Never work for free.

I had a guy contact me and con me into developing a feature for him and then
disappear.

The other way to put this is, get paid upfront. Estimate your price, triple
it, then demand 1/3 upfront before you start to code. That way if the client
flakes out on the rest you're at least covered. (Heh... I wrote this from just
the headline, before reading the blurb. Your friend who "refuses to take on a
project without at least 30% advance" is spot on.)

Which brings me to the next gem: Charge more. The A-#1 mistake most people in
every business make is to charge too little. (Flip it over: don't compete on
price. Not as a freelancer/consultant.)

What else? Don't work for liars or incompetents.

Also, just because a client has money and is willing to give it to you doesn't
mean that you should take it.

Sometimes the right thing to do is sit Gil down and tell him: your project is
the Winchester Mystery House and I have better things to do with my time.

(Ah, Gil... what a client. He would come in to discuss the project, and we'd
say, "Well, there's A, B, or C?" and he would say, "What about D? And E? Could
it also F and G?" and the PM would smile and say, "Sure Gil! We can do all
that!". It was the only project I ever worked on that had 100% code coverage.
No, really, 100%. Every line. Every single line. Because Gil wanted it. :-)

So yeah, charge more, and brook no bullshit. It helps if you're good at what
you do, or at least dedicated.

------
fierarul
The common rule around here is to charge more. This is also promoted a lot by
patio11 on HN and on Twitter.

I would counter this with the fact that sometimes it could backfire. Just like
in a job negotiation, a contract negotiation might end up with no contract at
all.

So while it's nice to hear about this, applying it in practice generally works
for new customers while the original/current customers are paying your bills
at the normal rate. Trying this with your current customers might lead to no
customers.

There are a lot of glass ceilings out there and mental blocks on both sides of
the negotiating table. Even a deal that works for everybody might not happen
because people are not entirely rational when talking about money.

~~~
ScottFree
"Charge more" is rhetoric[0]. If you look closely at those posts where patio11
advocates charging more, his reasoning for doing so is that most _highly
skilled_ developers undercharge for their services. His advice simply doesn't
apply outside of that context.

[0]: If you don't know the difference between Rhetoric and Dialectic, I urge
you to read Rhetoric by Aristotle. It will help explain some of the problems
you may or may not have when talking with non-technical people.

~~~
fierarul
> his reasoning for doing so is that most highly skilled developers
> undercharge for their services. His advice simply doesn't apply outside of
> that context.

Being highly skilled is a personal auto-evaluation. One might (perhaps
wrongly) believe this and still not manage to raise rates.

> I urge you to read Rhetoric by Aristotle. It will help explain some of the
> problems you may or may not have when talking with non-technical people.

This is an interesting piece of advice. You think this would be a common trait
among technical people?

I never did read Rhetoric, perhaps I'll find time over the holidays.

------
tyingq
Have a rate card that encourages clients to pay on shorter net terms, and to
pay on time.

Structure it as a discount instead of a penalty, but have the fully discounted
rate be the figure you wanted in the first place.

Helps in initial negotiations if they want long net terms. You can just say,
"sure...here's the rate for NET 45".

And, helps with slow payers.

So, in month 2, if they have paid on time for month 1, present an invoice with
the discount applied. If they are late, then don't apply it.

------
chx
Don't be afraid to say no if a client looks shitty.

Don't say no to a good client. Quote them an atrociously high price instead.
What's the worst that can happen? They pay it.

------
antoinevg
1\. Not making it clear to the client up front that I'm charging for the week
whether they have enrolled me in their IT systems or not!

2\. Not making it clear to the client up front that if they wanted me to do
the work the following week I've also have to charge them extra for having to
reshuffle my schedule.

With big companies this stuff is very hard to fix after the fact, it has to be
part of the initial negotiation.

------
gesman
Here're mistakes I _didn 't make_:

\- Insisted on payment once contract is done and ignore "could you also do
that and then i'll pay you for everything together.

\- Did not race to the bottom with developers from poor countries.

\- Did not take startup stock/shares/options to sacrifise salary.

\- Realized that 5% of customers are responsible for 95% of revenues and
prioritize attention to their requirements accordingly.

------
sas1ni69
Not billing often enough. Send a bill every 2 weeks. If they miss one, stop
working. No negotiations.

~~~
thdrdt
I think this is very bad advice. I had great clients who overlooked a payment.
Just let them know and everything was fine.

It also depends on what country you live in. Where I live it is 60 days by
rule unless it is in a contract signed by both parties.

~~~
m0zg
My wife is an accountant, and here's a protip on how to make sure that a
client never "overlooks" a payment: put a penalty clause in your contract that
says the client is to pay 1.5% of the balance every month after the payment is
due, and the client is responsible for any recovery fees. Your invoice will
always be paid on time. If the client does not agree to this, walk away. It's
a laughable amount of money, but their accounting department will front-load
any "penalty" contracts nevertheless.

All this "overlooking" is bullshit anyway. Nobody would "overlook" you not
doing any work for a couple of weeks. So why should it be any different when
it comes to payment?

~~~
jimnotgym
Penalty clauses are not always enforceable. Early payment discounts are...

I mentioned it in my post, but the number one reason a reasonably sized
company doesn't pay is that your invoice is not on their ledger. Call their
accounts payable dept up after a few days, check they have the invoice, ask
them when it will be paid. Don't be shy, this is what they expect!

~~~
m0zg
Doesn't matter - they work anyway. Nobody in accounts payable is going to get
into the details of whether things are enforceable or not. They'll just pay
your invoice instead.

~~~
taylortrusty
This is not a universal truth. Discount incentives work much better.

The clients who pay late will pay their invoices without the late fees anyway,
in my experience. Now you’re tracking down payment for your work and the fees.

~~~
m0zg
>> This is not a universal truth.

Nothing is.

>> Discount incentives work much better.

This is not a universal truth. See what I did there?

------
danielovichdk
The problem with consulting as a developer is that you can't charge as much as
it costs to fix shit properly. Endless fucking story. Developers are mostly
crap which treat their work as any other working man.

You are there on the floor with these men, lowest in the hierachy, selling
your time which you can't scale.

You can't set a price on your time, it's something you will never get back,
but if you absolutly must sell it, sell it expensively and to people you
values your time.

Fuck doing work with lousy people and companies. It's not worth it.

Time doesn't scale

~~~
ScottFree
> You are there on the floor with these men, lowest in the hierachy, selling
> your time which you can't scale.

What's the alternative? Being an employee is the same thing, but with better
benefits and worse pay.

------
invalidOrTaken
Charge more. If you can't find clients, the answer is to get a job and build
your experience/network, not to lower your rates.

------
mehrdadn
Related question (especially to those saying you should've charged more): how
do you _start_ consulting in software engineering? Like where do you advertise
and expose your talent to potential clients who would pay at a rate that you
think is worth it?

~~~
neurostimulant
In my case, I start by telling my friends and people I was working with that
I'm now available for consulting gigs. Eventually, one person (who know my
works) recommended me to their friends. I did some projects for them, and they
like my works so they recommend me to their friends, and so on.

My wife also like to talk about what I do to her clients (she was a consultant
working on a big consulting company, different field), leading to more
projects.

------
andrei512
1) Not charging enough. This is harder than it sounds. First time I
significantly increased my price was when I didn't want any extra work, so I
asked for double my rate. After closing that deal I started aiming higher.

2) Not creating content sooner. There hasn't been one thing that influenced my
career as much as my blog - If there would be one thing I would do different
it would be this: I would have started blogging earlier.

------
sumgame
Trying to find work through gig sites.

I've spoken to multiple freelancers to learn that the best way to actually
find good clients that pay well is through word of mouth. There is inherent
trust in the relationship when someone comes in as a referrals vs when they
don't.

And that trust really changes the game in terms of how much more comfortable
they are in terms of how they engage with you. They'll trust you with the
project because they trust the referring source.

The alternative is spending a significant amount of time showing your
skillsets to clients that don't know about you. Which means you may have to
warm them over a few projects before they actually fully trust you. While
starting off job sites maybe the only way to build a portfolio but we believe
that everybody inherently has a professional network of good relationships
they can tap onto, like old colleagues or friends from college that work in a
similar industry.

[1] Here's a post I wrote about the ways different ways experienced
freelancers find clients and most of them said that their best work came
through word of mouth [https://freelancefish.com/things-we-learnt-about-
finding-cli...](https://freelancefish.com/things-we-learnt-about-finding-
clients-by-speaking-to-10-freelance-consultants/)

[2] If you want to bootstrap your referral network, a friend and I are working
on a tool that helps freelancers find work through word of mouth by reminding
you to stay in touch with people and helping them in meaningful ways. It also
encourages you to clearly articulate what you do and how the same people can
help you in return. We just launched the beta a couple of weeks back and are
slowly adding people onto the platform
[https://clienttree.io](https://clienttree.io)

~~~
ama_ma
Interesting. Will like to give this a whirl. Just curious - a) if there is an
option to import my existing network/contacts from LinkedIn or some CRM that I
maintain.

b) are you also building tools to help me showcase my consulting portfolio?
(Like Dribble is for designers, but something more generic to encompass all
types of freelancers/consultants). I would like to have a portfolio page on
the platform - that I can easily create with some (no-code?) tools - and then
something my referral network can easily point to - to their next level
connections - as Proof of Work.

~~~
sumgame
We haven't worked on a) yet but its on the roadmap. We want to import it from
gmail as of now but linkedIn is on the list too.

We have a very basic services page that gets set up. More than portfolio we
focus on how you can help your potential client. So really trying to showcase
a very specific problem that you're dream client can relate to.

------
Pandabob
1) I thought that getting clients would be relatively easy, but getting new
ones is more about trust than anything else. I moved back to my home town
after spending two years away and noticed that my professional network there
was quite poor so it took awhile to find a gig (~2 months and it's not in my
home town).

2) When looking for opportunities (any kind really), the 80/20 rule applies.
Try to focus on the 20% that produce 80% of the results. In our case we
started by cold contacting, with quite poor results. Instead, we've been
pretty successful using local freelancing networks/sites ran by larger
consultancies to outsource the work they don't have the resources to do.
Granted that's just subcontracting but it's a decent way to start out. I'd
imagine the way the 80/20 rule applies when building direct client
relationships is to focus on large-ish corporatios with decent financials that
are already using contractors.

------
nickjj
I've been freelancing for ~20 years.

One of the biggest mistakes was not charging enough early on, which lead to
taking on work from questionable clients.

I think it was easy for me to fall into that trap because I started really
young (pretty much right out of high school). I had no mentors or anyone to
talk to, and this was in the late 90s so there weren't thousands of blog posts
and Youtube videos on this topic.

Your rates make a big difference and it's not just related to your income,
it's also heavily tied into the type of clients you'll be working with. On
average after many hundreds of gigs at varying price rates I find the more you
charge, the more easy going your clients are. They tend to trust you to do
your job instead of trying to micro-manage everything with unrealistic
expectations. Of course this comes with more responsibility, but that's a
trade off I'll make every time.

------
berkes
Not making the client pay specifically and separate for travel. It should cost
them more to have you come over to their office. That way incentives are
aligned. That way they'll book all weeks meetings in one day, instead of
having you come over to their office every day.

And ensuring travel hours, despite being paid, are not working hours. Working
on a train or plane is fine, if you feel like it. But it should be your
choice, a courtesy. Not something they can expect. "I'll get that report 9:30
tomorrow. Tomorrow? But you still have two hours of travelling. Yes. Which is
why I cannot finish it tonight."

------
mattbgates
I think there are three mistakes I'd make:

1\. I wasted a lot of time as a freelance web designer trying to get clients
and convince them to go with me. I think someone would tell me they wanted a
website. Without taking any payment at all, I'd setup a demo website. It
wouldn't be a whole lot, but I'd setup at least half the pages with lorem
ipsum, only to have them tell me they'd get back to me... or take forever for
us to get the website done.

2\. I always undervalued my work thinking that they would go to another
client. To this day, I still am a culprit of making this mistake. It's not
that I should overcharge a client, but for a lot of the bullshit they put you
through, back and forth, meetings... etc. I was giving away a lot of free
time.

3\. A lot of times I'd have clients going into their website and making their
own mistakes.. nothing that was my doing.. nothing that even required me, but
oftentimes, I'd rush to fix everything for them. Soon as I stopped rushing.. I
realized a lot of the time, clients figure it out themselves, especially the
usual minor mistakes they'd make.

------
royandre2k
Here is my way of doing it, after 20+ years of experience in the field. Be
sure to watch the video in the "article".

www.trollandre.com/rent-me/

------
angvp
Those were the errors I made for a project I was a consultant/freelancer:

\- Not charging the right price per hour, because "I was starting, this was an
opportunity". \- Not putting boundaries on client limits, as in, "no you can't
call me whenever you want" (especially if you live in a different timezone) I
personally understand they need to have an answer, but they can do perfectly
fine by e-mail and you'll have to set to them a deadline for replies, for
example "I will call/or reply you as soon as I get the e-mail" on the
contract. \- I didn't bill them for every cost they make me do like travel
meetings and other general costs, so at the end my profits were even low. \- I
didn't had a contract, that was completely solid, so, get a lawyer who can
draft you a solid contract with all your needs. \- I was so overswamp of work
that I couldn't manage all the expenses, or other time that I didn't bill to
them, so also, get an accountant if you are charging them with something that
might be funky.

~~~
herewego
I generally disagree with the “charge more” recommendation in the beginning.
The reality is that until you have a sustainable client base, taking lower
rates is often a necessity. In time, though, you should raise your rates to be
market center.

One more mistake I would add was that I didn’t specialize at first. I marketed
myself as a general full-stack software developer and that was the wrong move.
Now I specialize in a particular area that I focus on and excel at and that is
something companies are willing to pay for. The value proposition is clear;
they’re paying for a specialization that they won’t ever have (or need long-
term) in-house.

Edit: I own and run a very profitable consulting company, among other things.

------
posedge
As a junior software engineer I wonder, how do you get started with contract
work, and how do you keep getting clients? Is it all networking?

------
pier25
1) Setting my rates too low

2) Not saying 'no'

3) Not making contracts and accepting changes mid project

------
jitendrac
Not full time freelancer, but I made many and still make some those includes

-Not charging enough.

-Spending less time to find client

-Not specifying Time required to complete task

-I have micro-experience of many platform and business specific task, but despite knowing its is rare to find such developer I always forget to charge enough.

-Taking fixed price for project with ambiguous scope like firing on own leg.

-Not to know when to refuse to do something

and many more.

------
innocentoldguy
My top-three biggest mistakes were, in order of severity:

1\. Taking on and continuing to work with asshole clients. 2\. Setting my
rates too low (I didn't account for taxes, paying both halves of FICA, and
healthcare as much as I should have). 3\. Not finding a good balance between
finding clients and actually doing the work.

------
eagsalazar2
Constantly update expectations based on how the work is actually going and
based on evolving requirements. If you are T&M or Fixed Fee, you need to
always give people your best expectation of progress and where you think (even
with a lot of uncertainty) you'll be when the budget runs out. If you do this
constantly and early clients feel empowered to make choices (including adding
more budget). If you just work until the money is gone either you eat the
overage or the client is blindsided and pissed off.

The short version of this: Never, ever, go over budget - always ask for more
money or a cut in scope and always do so as early as humanly possible.

If you and/or the client aren't clear on scope or if the budget is enough,
don't sleep at night, confront and squash the uncertainty and resultant
misalignments or you will get bitten!

------
jppope
Everyone here covered 99% of the things I would say so I'm going to add a few
important ones that people missed.

\- Estimation. Devs are notoriously bad at it... so don't think of it as an
estimation of the amount of time something will take, think of it as a
negotiation with the goal of getting them to agree to the most amount of time
something could take. If your estimation doesn't seem ridiculous to you then
you did a bad job of negotiating.

\- Asshole tax. If you get a client that you think is going to be an asshole
tax them for that privilege. +20% at least (make sure you're charging more to
begin with as previously mentioned). Now this may seem wrong but if they turn
out to be not an asshole (which happens a lot), but to make this right with
the universe just do more work and don't bill for it. The idea here is that
you still end up being mentally happy to do the work even if working with them
is painful.

\- Use options to negotiate better. There is a bunch of advice saying "don't
charge by project"... hogwash. If you can make more money by leveraging a
customer's desire to know ahead of time what something will cost you can make
money on that. You can clearly define ahead of time exactly what the project
entails, charge a 2X or 3X what it would cost in hourly, and then charge for
scope changes (which we all know there will be a ton of). Similarly, when you
present a proposal, give at least 3 options: "cheap-ass", "normal", and
"deluxe"... you will be surprised how many people will spend extra money
because they can (you can do this even if the project is billed hourly).
Furthermore... people that head into "cheap-ass" land give you valuable
information on how to deal with them - most of the time this means you do the
same thing but need to itemize your work more heavily (more on this).

\- Itemization. Better Negotiation and billing higher amounts are improved by
itemization. they say the person that comes to the negotiation table with the
most bullet points to negotiate over will win the negotiation. Billing is just
a different negotiation.

\- Getting content is a nightmare for web clients. Charge for that... but as
mentioned elsewhere make the charge in the form of a discount elsewhere. If
the content is delivered by XX-XX-XXXX the project is discounted $XXX. THIS
INCLUDES BASE ECOMMERCE PRODUCTS.

\- Don't try to hire people to do part of your work until you are REALLY
efficient at it.

\- Exercising is part of your job if you are 100% on your own. Seriously.

\- If a tool will save you time buy it immediately. Avoid free tools - you
will pay for them later and it will cost you more.

~~~
smrr723
> Estimation. Devs are notoriously bad at it

I wouldn't say devs are bad at it. It's more that software development is very
hard to estimate. Unless you're doing exactly the same type of work with an
identical setup every time - like billing people to install a Wordpress site,
it's often impossible to estimate the exact amount of days or hours something
will take, especially if you're being paid to fix a bug or a problem to which
you don't yet know the solution.

------
_Codemonkeyism
Too cheap and not sending early enough invoices, because it felt hard to do
while we were still working together. Now I'm more expensive and send invoices
right away. If there are troubles with payment I have a better lever and can
also stop working with a client.

------
TrackerFF
When you're starting out, it can be easy to think that you'll just undercut
your competition - if not for the experience gained.

No, here's the truth: When you undervalue your work, you'll attract the types
of clients you don't want to work with. Scammers, misers and bargain hunters,
etc.

You're also signaling that you're inexperienced - even though you may have a
legit reason for charging less. I know consultants that work from home, and
live in extremely cheap areas, or simply don't have many expenses, compared to
consultants living in high COL areas.

So yeah, charge more. It's a good filter that you don't need to actively work
on.

------
wensley
Lots of advice to raise your prices, which I agree with, but just be careful
if quoting for a dream project or something in an industry you want to move
into.

I recently quoted for such a project, with a higher price than usual but not
unreasonable at all. Heard nothing back from the client for weeks now when
discussions were previously going well. I feel like they have taken offence at
my quote or something.

I am a bit of specialist in the particular area so pretty sure they won't find
someone else to do it for less, which was part of the reason for my slightly
higher quote.

Any advice on how to follow up in a situation like that?

~~~
safareli
Something as short as "Have you given up on this?" might work

------
cvhashim
Here's some solid advice for consulting:
[https://www.youtube.com/watch?v=2YF0_N7DuwA&t=1254s](https://www.youtube.com/watch?v=2YF0_N7DuwA&t=1254s)

------
greggyb
From a business perspective - regardless of the content of
consulting/freelancing:

People respond to incentives and everything that matters to you and to the
client is up for discussion.

I do a mix of project work, training, and team/design coaching. I have a
graduated rate schedule. If we're doing a long-term project, I'll typically
price work out at the week level and bill at what comes out to be a lower
effective hourly rate. This is fine, because these things are planned in
advance and I can schedule around them. For customers that want to be able to
get an hour or two of time nearly on-demand, I bill a much higher effective
hourly rate and bill at 15 minute intervals.

I value my time, and I value being able to plan for things. I incentivize
clients to do this by charging them more for things that are relatively
inconvenient.

I like being paid on net30 terms - this is how I plan my cash flow. If a
client has a blanket rule for net60 or something else, I'll discuss with them
my preference, and will typically offer early payment discounts, something
like a 2.5/30 net60. Again, incentivizing my preference. I'd rather have a
predictable cash flow.

Regarding the second item - it's always worth discussing something. I've never
had a customer issue with schedule or scope when we've talked through what's
happening. Your work matters to your customer. Keep them apprised of what's
happening.

I will typically have active work with 3-5 clients at a time. I have a mix of
remote clients and those that prefer on-site presence. For much of the last
month and a half, I worked out of one client's office, but had daily standing
commitment from 12-5 for another remote client. The on-site client was fine
with this, because we discussed the schedule. They prioritized the on-site
presence and immediate availability.

I typically won't work full time for a single client. I consider full-time to
be 40hr/wk for more than two consecutive weeks. This doesn't mean I have no
long term clients, just that we work out schedules that work for both of us.
This is because I value my schedule flexibility and don't want to be beholden
to a single client. My clients get this.

------
exabrial
This is going to sound basic: not charging enough. It's worth an entire blog
post. Between imposter syndrome and economics, you probably won't value your
experience enough.

------
unnouinceput
Took a project as a whole price. As a result, the client asked for a lot of
changes and paid only initial price, of course. What was supposed to be a
short 2 days project blew into a full month. Learned my lesson, never worked
on a fixed-price project again, only hourly. Now I welcome clients with
gazillion of change requests and new features since I get paid by the hour.
Also allows me to be at hand maintenance guy after project is done. This way
pays the bills quite nicely.

~~~
mentos
I outsource a lot of game dev related work. Usually I give the requirements,
ask for an estimate from the contractor then I increase it 25% and ask if
they’d do it at that fixed price. Does that seem fair? So far it seems to have
worked out over a few tasks but curious what objections you or others reading
might have to this?

~~~
ScottFree
> I outsource a lot of game dev related work.

Do you mind if I ask what kind of game dev related work?

My experience in the industry involved only hiring companies to do completed
bits of work. This included programming, art, sound and level designs all in
one. Basically, whole playable levels and/or mini-games from scratch. Not
ideal jobs for a single programmer.

~~~
mentos
Working on a first person shooter in Unreal Engine 4 so tasks include stuff
like weapon inventory systems, bullet penetration, AI bots, server hosting,
modding tools, in-game VOIP. I also do a lot of programming (~75%) but
outsource modular tasks where ever I can to try to buy some time.

~~~
ScottFree
I bet that kind of work is more interesting than CRUD work. Thanks for the
info!

------
miesman
Starting work before I had a written purchase order in hand (or at least a
verbal purchase order number with the promise of getting me the written
purchase order soon). if you’re working before you get the purchase order
there’s no need for them to actually make this a priority. It always
eventually turns into a problem. Also having a purchase order shows that
everyone in the company is on the same page (between engineering and the
finance department).

------
sdiw
Like most of here pointed out, I didn't charge high enough. When I started I
was afraid if I charge too much, they will leave.

But still, I haven't learned from my mistakes. I charge way too less compared
to what people posted here. I don't increase the price continuously. PLUS I
don't market myself much. I heard word of mouth marketing is best for
freelancers but I am yet to get a gig from word of mouth marketing.

------
Rebelgecko
When a customer makes a new request or tries to modify a requirement, don't be
afraid to say no if you don't think it's reasonable

------
twobat
Reading many replies here I now understand why prices go from $2 to $200. The
work often gets easier but the intermediaries increase.

------
HeyLaughingBoy
Lot of good comments here. The /r/freelance subreddit is also a good place to
ask questions & discuss issues.

------
andrewstuart
What's the appeal of being an independent consultant?

Why would you do this versus any other business or job?

Genuinely curious what the appeal is.

~~~
gk1
For me:

\- I get to work on something new every few months. New company, new people,
new challenges, etc. This keeps things interesting.

\- I get to do what I think is best for the client, rather than taking orders
from someone.

\- Pays much better than salaried positions (for me, at least).

\- I get to define my own job. If next year I decide to switch from marketing
consulting to, say, operations consulting or sales consulting or illustration
work or some narrow marketing thing like site conversion optimization, I just
update my website headline it's done.

\- Experience the joy of running a business. Project cash flow, close deals,
scope out projects, deliver results, collect feedback, track invoices... Love
it.

\- Ultimate flexibility. Last year I took a month off to travel, and this year
I took a month off for paternity leave. All it took is advance notice to my
clients, and a return date so they know when we can pick back up.

~~~
bitcoinmoney
Can you share what you consult on?

~~~
gk1
I'm an engineer-turned-marketing-consultant for enterprise software startups.
I help them attract and convert more enterprise customers in a repeatable way.

~~~
raverbashing
Interesting

How long is your average engagement, if you don't mind asking.

Also I suspect this requires a lot of travel (and time away from home),
correct?

~~~
gk1
Starts with two months, usually, and on average goes for over a year. As the
startup grows there are always new challenges that pop up.

Actually I barely travel even though most my clients are in the Bay Area and
I’m on the east coast. Everything is done remotely with email, slack, and
zoom. I go there once a quarter but even that is just for some face-to-face
time and not out of necessity.

------
JJMcJ
Do not work extended periods without getting paid. Especially if it's
something approaching 40 hours a week.

------
Tangokat
Bring the client in to ask them what to do when something unforseen happens in
a project. Even if you know what should be done, having them make the decision
with you means they can't come back 6 months down the line and complain about
the project not being delivered on time.

------
mtbcoder
If you are in the US, make sure you are up to speed on any county/local
regulations and tax laws about running a business. Even as a freelancer and
depending on your area, you may need to obtain a business license, pay gross
receipts or any other such legal obligations.

------
thdrdt
The thing that most forget: it is impossible to estimate. So don't do it.
Charge by period and keep communication to the client what you did in that
time. Give them confidence that you provide them company value for the time
they pay you.

------
AvrohomSpadone
Get a retainer and start work when check clears. Invoice client against the
retainer. When the retainer low, ask for more money. When the retainer is
spent, stop work until additional funds are deposited.

------
tomaszs
As freelancer or as a consultant? As a freelancer i once didn't stop working
for a client who didn't pay for a month. Because we cooperated for a year and
good contact with him. I never got these money back.

------
rmetzler
Also, there is this advice from Mike Monteiro (explicit language):

[https://www.youtube.com/watch?v=jVkLVRt6c1U](https://www.youtube.com/watch?v=jVkLVRt6c1U)

------
regularfry
Not sufficiently understanding my own brain. If I'd known then what I know now
about ADHD, things would have gone very differently.

(OK, I don't really think of this as a mistake, but still...)

------
whalesalad
There is an excellent book that I would suggest called “The Secrets of
Consulting” by Gerald Weinberg.

I also use a tool called FreshBooks that has been killer as far as invoicing
and tracking time.

~~~
mooreds
Happy ex customer of Freshbooks (ex because I am no longer consulting). I will
say if you are disciplined and want to save every penny, you can get by with
Excel and word for invoicing, but once you get your first client or two,
Freshbooks is real nice to have. Easier, invoices look better, you get
reporting.

And the Weinberg book is top notch. Anyone who wants to solve problems in
business should read it.

------
the_resistence
For B2C, get 100% upfront. For B2B, 50%. I am willing to walk away from all
business when my payment terms are not met. Life is so much less problematic.

------
scandox
Don't be afraid to fire the client. Be conscientious but don't allow your
priorities to be kidnapped.

------
deforciant
Would you take company options/shares as part of the compensation if they
can't afford to pay more?

------
royandre2k
Here is my way of doing it; www.trollandre.com/rent-me

Based upon 20+ years experience.

Be sure to watch the video listed in the doc.

------
carc1n0gen
Underestimate time needed, and I didn't communicate often enough.

------
camel_gopher
Not charging enough. Not spending enough time looking for new business

------
awinter-py
Don't forget to withhold quarterly taxes if you're 1099

------
sys_64738
Undercharging. Double your rate to get better clients.

------
xwdv
Didn’t buy errors & omissions insurance.

------
o-__-o
\- Not forming an LLC: first gig was done as myself, in hindsight i could have
been sued and had a judgement or bankruptcy hang over my personal head for 10
years (no assets back then, but you could lose your home if you own one. don't
do it). Get an LLC, get a registered agent, get a PO box, get a bank account
and a bank ledger. Money you want to spend from the business goes into the
bank account as a deposit and comes out as a business check or business
credit/debit purchase. If you spend on a personal CC, reimburse yourself from
the business bank account. Don't pierce that veil.

\- Closing the deal / Asking for the sale: Gave away waaaay too much work for
free thinking it's advancing us to the point of the sale. Don't give away your
work for free, not only does that lower your value in their eyes (people care
when they pay for things) but you are ultimately,

\- Undercharging: left money on the table like a fool not billing for "small
things"

\- Using my own ERP: no one uses whatever system you found on github, they use
quickbooks. get that, export to whatever format your erp understands

\- Paying taxes quarterly like a fool

\- Forgetting I am a contractor: got a migraine? no meetings or deliverables?
found a hot lead? DON'T GO TO THE CLIENT SITE

\- Self-hosting the wrong tools trying to save a buck: Opensource gitlab is
nice. Opensource gitlab is not nice when you need to troubleshoot why Postgres
is spewing vacuum errors.

\- Going SaaS with the wrong tools and hemorrhaging money between clients:
Paying for heroku to host an app I can run in docker locally, paying for
dropbox when google or onedrive is free, paying yearly on something only used
twice a year.

\- Not billing 2/10NET30 and not charging late fees: Get your money faster if
you offer them a 2% discount if paid in 10 days instead of 30. If they pay
after 30, they will be fees that will continue to be added until they are
considered deliquent and then collections. I've also offered 5% on higher $
contracts

\- Not having a contract or blindly accepting the clients contract: My
business insurance discounts me if I execute using my contract. Without a
contract spelling out requirements change procedures, it becomes a back and
forth negotiation game in the middle of project crunch time. Don't do it, have
an outlined process agreed to at the start of th engagement and use a
bugtracker.

\- Enforcing the contract consistently: If you require something in writing,
make sure there is a paper trail. If you end up in court it makes your lawyers
job that much easier and that much lighter on your pocket book. I just watched
$200k fly out the window because writings were saved on the client controlled
G Suite and there were a lot of verbal face-to-face handshake agreements.
Always in writing, summarized from your regular business email address.

\- Not growing: I'm in profit from this client. I should have another client
lined up or two or three executing at the same time. I should hire someone to
help me with that fourth client or to find the fifth client.

\- Thinking you can land a USG contract: don't waste your time. Unless you
want to suffer through the GSA, try to partner through an established firm
instead. YMMV, but i'm done with the US public sector.

~~~
aliswe
Can you elaborate on the "DON'T GO TO THE CLIENT SITE" point?

~~~
sgt
Probably that if you show any weakness - anything from physical discomfort,
being sick, not being 100% mentally, the customer may end up losing confidence
in you. It's better come to delay and come back fully prepared.

~~~
o-__-o
I like to use the plumber model to describe this. When you have a major
problem in your house you hire a plumber. He or she will show up as necessary
to fix the problem, probably every day, but what about when that part needs to
come in. They are going to come to your house, pull out a laptop and sit at
your table while they talk to other suppliers about other jobs and direct
their workers at other sites? No, they are going to give you a summary and
head off to make money somewhere else.

Now if you don’t have anything else to do, sure go in and network.. find
leads. But if your contract is 6 months and you’re just extra hands on site...
go try to make more money!

------
trustfundbaby
Charging too little.

------
franze
Charge by the hour.

------
Seufman
Few things:

\- Get your accounting in order. Pay a professional to do it; don't try to do
it yourself.

\- Take care of yourself. You'll probably be flying a lot; don't take the
cheapest routes, tell the client it's business at >4 hours in the air, etc.

\- I unfortunately get brought into a lot of situations where a CEO / VP is
looking for justification in firing someone or making a big structural change.
In these cases, it's important to keep in mind that you're working for the
person who is paying your fee and to not get hung up on trying to fix the
situation. It sucks.

\- Charge a lot. Think up the largest number you believe would be reasonable
for your services and multiply that by 1.5x. Consultants are supposed to be
expensive.

\- You'll be amazed by how many people reach out and want to take phone calls
to go on fishing expeditions / mine you for free value. The way I deal with
this is: A) I ask very pointed questions about what, exactly, they're looking
for in an engagement via email before I take a call. If they don't have a
compelling need, I decline ("I don't think this is a good fit for me." -> be
blunt) and B) I have developed a 6th sense for whether a company can afford me
/ the project sounds viable. If you have enough inbound, don't be afraid of
false positives in turning down phone calls.

\- Don't bill hourly. I charge per project on the basis of value; if a
potential client fights you on this, reject them.

\- Try to get work on a retainer basis. You're being paid to not only do work
but to be available -- you're a service provider. This is nice because the
revenue "stacks" up and you also get more integrated into the team this way as
it frames you as a source of insight / wisdom. If you're using consulting as
an entry point into a new role, this is very effective.

\- Build something proprietary: an Excel model, some tech, an audit framework,
a taxonomy, whatever. Brand it. That's now "your thing" and you can set a
market price for it that is divorced from incremental work.

\- Build out a proprietary funnel for business: a blog, Twitter presence,
whatever. If you have to go find business on your own / do sales, you can't
charge as much as when people come to you.

\- In general, I think it's good to be skeptical and to err on the side of
telling people "no." There are a ton of lightweights / window shoppers /
sleazy people out there; get good at detecting them and rejecting them
quickly.

\- NOTHING IS FREE. You don't pitch, you don't do exploratory onsites, you
don't give samples, you don't take "no-agenda meetings," you don't let people
"pick your brain." You are a consultant and if people want your insight, they
need to pay you for it. Internalize this phrase: F __* YOU, PAY ME.

------
gpresot
I am a management consultant, so field of work might be different from yours,
but general rules are probably the same. Also, I am not a freelancer, though i
have worked often with them. My two pence:

\- Always have a Scope of Work (SOW) agreed BEFORE you start working: Clients
are often bad at explaining what they want in detail, and consultants are
equally bad at being realistic at what they can offer in the amount of time
available.

\- Always (ideally) have a contract signed before you do any substantial work.
The contract and the SoW are your main protection against scope creep. And
usually it is the consultant who drafts them first, not the client, so it is
your best chance of driving the project details.

\- Rates vary with client, length of the contract, stage of client
relationship (lower rates for first project), but ...

\- Rates tend to be sticky. If you work for Xusd/h for the first project, many
clients will expect that rate to stay for the next one too. So your first
negotiation is the more difficult and the more important at the same time.

\- Rather than offer a low rate, state your full rate and the discount you
apply and why (e.g. first project, long project, maybe the client is putting
some resources and tools on the project...)

\- Preferably charge by hour, day or week. The proposal or contract should
have an estimate of total price, based on estimate of duration, but it should
clearly state that it is an estimate and you will change based on time units.

\- However, it is very likely that yours is not the only offer they receive,
so they will compare them on the same basis, based on a fixed amount of hours
per day, and the duration of the project. A consulting firm staffing a team
has more leeway with the composition of the team (junior consultant to
Partner), and comparisons among firms are slightly more difficult (usually
done on the basis of blended rate). The quotes of freelancers are very easy to
convert and compare.

\- Expenses are always on top (travel, hotels; meals are a question mark)

\- Try to find out hourly or day rates of consulting firm (in you field of
activity) in your country: they are likely a lot higher than what you think of
charging, partly because they have higher costs, but also because they factor
in a % of idle time of their resources during the year. You should do the
same. Your rate will probably still be lower then theirs as there is a real
value in being part of a firm with established methodologies, expertise,
examples... (this may be less applicable in other fields of consulting )

\- Think about why they need a consultant: is it because their resources are
too busy or because they do not know how to resolve the problem they have? The
latter gives you more leverage on the rate.

\- Remember that every client is different: some impose work based on a fixed
total price, some do not want to reimburse expenses (and may be fine with a %
markup on the rate). Often it is due to internal procurement rules and
guidelines, which will be difficult to change.

\- Bill often throughout a project (frequency depends on project duration:
weekly for short assignments, monthly for longer).

\- A good practice is to send a fee tracker weekly to the client, showing
hours worked and incurred fee. This avoids surprises. It is best if you have
some deliverables or progress report to show as well.

\- If you feel that the project is taking longer than expected, be open about
it and explain why (it may be because some input from the client was delayed,
and they usually do not object to additional compensation, or at least they
will push to accelerate on their side; it may be because things are more
difficult than expected: this may become a difficult conversation, so be
prepared to explain why it is so, what can be done, etcetera).

\- Your project is also the best occasion to get another project with the same
client (as a follow-on activity or maybe because while working on it you get
to know they have other problems that you can help with. It is BY FAR the best
form of business development.

------
ossworkerrights
My most regrettable mistake was not doing it earlier in my career.

~~~
fastbeef
This. If I had started back in ‘11 or ‘12 instead of ‘18 I wouldn’t have a
mortgage right now.

