
Ask HN: In the current crisis is starting freelancing doable? - iraldir
Hey everyone,
I&#x27;m a full stack JavaScript dev in London with 10 years experience, working as a tech lead in a big company. Because of the Coronavirus directly impacting our revenues, we are being put at 80% pay &#x2F; 80% time.<p>Do you think in the current climate it would be doable to start freelancing &#x2F; consulting? I&#x27;ve already got an LTD setup because I used to be a contractor, but would like to look at turnkey work, where I&#x27;m given a project for a fixed price.
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toyg
_> we are being put at 80% pay / 80% time._

Uhm, you want to check the fine prints. If you've been _furloughed_ , which is
typically what people on "80%" are, then _the Treasury_ is paying your salary,
but you're NOT supposed to work AT ALL. If you are actually working, you and
your company are effectively committing benefit fraud.

 _> Do you think in the current climate it would be doable to start
freelancing _

Everything is doable with enough grit and enough resources; IR35 is a big
concern though, because it has cut demand significantly by scaring companies
away from contractors - even if the postponed changes are postponed again next
April, HMRC will keep the finger on the trigger.

This said, this is probably not the right time to sell in general; it's the
right time to buy / invest / build while prices are rock-bottom.

 _> would like to look at turnkey work_

That's not a great move at the best of times, unless that "turnkey" is highly
automated (in which case it's likely to go away soon as somebody starts
selling the fully-automated version). Fixed-price is a recipe for getting
screwed.

~~~
hanoz
It's highly unlikely he's been furloughed. I don't think a big tech company
would make the mistake of having staff on that scheme working anyway, they
would be in a lot of trouble if they did, but as the limit is £2500 per month
I'm sure the OP would be on noticeable less than 80% of his previous pay as a
London tech lead if he had been.

The 80% rate of the furlough scheme does seem to have prompted a lot of
companies to think this is a suitable rate for a hard times haircut to give
thier staff generally though, even they are still working 100%.

~~~
ghaff
A previous employer cut everyone's salary by 20% during the dot-com bust and
I've heard the 20% figure thrown around quite a bit over the past month--with
or without a reduction in hours.

It seems to be a figure that a lot of companies settle on as a significant
cost savings in the aggregate while not being such a big cut that (most)
people can no longer afford to pay their bills or otherwise feel forced to
just walk out the door.

~~~
wayoutthere
The 20% number comes from the expected revenue hit companies are looking at.
Honestly, they're doing it because they can get away with it right now. What
do you want to bet that many of these 20% salary reductions will be permanent?

In my view, these companies can fuck right off. They're not paying their
workers more when they have a great quarter, so why should they pay people
less when things aren't going well? I suspect the companies that cut pay /
furloughed a significant amount of workers will have a hard time hiring when
this is all over.

~~~
seankimdesign
The reduction in pay comes with a reduction in workload. Which means that for
most companies adopting the 20% paycut, they are also transitioning into a
4-day work week. Its hardly a related to some corporate greed trying to
squeeze their workers, but a sign of desperate measures for desperate times.

~~~
batmaniam
I have a hard time believing that workload is reduced. In theory it makes
sense, but companies are not charities, and unless the government makes it the
rule that workload gets reduced, I think it's just gonna be a direct paycut.

------
dep_b
The requirements to start as a freelancer, in any kind of economic climate:

* You have an accountant

* You are not afraid to draw up a contract

* Have a skill that has higher demand than supply and will remain so for a foreseeable time

* Have worked on paid side projects a few times

* One existing customer is interested in hiring you for 3 months (worth of money) or more

Ensure you set aside 50% of which 2/3rds for tax and 1/3 for bad times. Maybe
you pay less tax in the end. Yay! "Free" money! _Never get in the reverse
situation._

If you don't have customers: don't do it. I have been making a lot of contacts
in the 15 years+ I have as a professional and it's still hard to find work
right now. If you're good for a few months then we're out of the pit in terms
of demand for sure.

~~~
themodelplumber
Huh. I know a lot of people who did almost none of this and freelanced their
way into successful businesses. Why is having an accountant necessary? Where I
live, even simple books from the office supply store and basic tax software
will tell you what you need to know as a beginner. Personally I operated my
business just fine for 15 years without an accountant.

Drawing up a contract, similar, but here I would certainly mention that you
can also consult a professional if needed, like a business consultant or
attorney. You can also write a letter contract and communicate well enough
that contracts don't matter that much in the end, which is the case for a lot
of freelancers, guessing the majority.

Knowing what skill has high demand is less important than finding a team or
business that likes you and needs you. If you are in tech, someone probably
needs your help. Many times they will find a way for you to stick around
anyway, if it's a good psychological complement.

If no one can pay you for three months worth of money, you get to decide how
long you hang in there. Personally I found a veteran graphic designer who was
excited to work together and started sending work immediately. Within 3 years
of that I was turning down more work than I was accepting. But there was never
any promise of income.

Setting aside 50% would have been impossible due to medical bills at the time.
I was lucky to have free rent via the in-laws and a wife who was working as
well. Still, when freelancing picked up the problem quickly became burnout and
setting boundaries. This has been the same with many of my peers. Many of us
went through 2008 and even the dot com crash together. Demand was never really
a problem except at the very start, but the perception of an urgent need to
hustle for every last client can easily break you.

~~~
dep_b
My accountants saved me enough money every year to be basically free, while I
don't need to worry about all kinds of stuff. I did my taxes myself often as
well, but I didn't like to do it (instead of doing billable work or having
spare time).

Contracts: I really suck at them. I rarely do them. I got lucky so far,
perhaps 2 clients that managed to pinch me but then again assholes will be
assholes with or without contracts. But hourly work is easier than fixed
price. Especially when it goes sour.

> Knowing what skill has high demand is less important than finding a team or
> business that likes you and needs you

True. I'm a specialist in mobile remote communication solutions which should
be somewhat sought after right now but I can't find matching clients. I should
have networked way more the last years than I did, and I don't consider myself
a bad networker.

> Still, when freelancing picked up the problem quickly became burnout and
> setting boundaries.

The worst thing that always happens that after a slump in work I'm going
basically YES YES YES YES YES YES to all work and I've never been in the
situation that when one job finally came through at least two others I've
YES'ed came at more or less the same time.

So going from 0 to 60 hours per week for a few weeks. Which after a week or
four really starts to turn into 30 hours worth of productivity while being
behind your computer for 70.

~~~
jlevers
As a consultant with no accountant -- in what areas did they save you that
much? Entirely taxes?

~~~
dep_b
Yeah all kinds of tax laws I didn't know existed, places where I could earn a
bit more, starting a company together with my wife so the earnings are divided
instead of going into one big pile where the top part gets taxed most.

But also a US$1500 bill that never was paid by a customer by going over bills
vs the business bank account's movements.

------
ujjain
Contract work has been under attack by IR35, fortunately this has been
postponed by a year.

These are uncertain times. A lot of contractors have moved back to permie and
competition is high.

You can try to obtain a 6 or 12 month contract if you have a decent stack of
emergency cash (e.g. £25k) lying around.

I wouldn't overanalyze it. Try to see your options out there.

If you can get 3 contract offers in 1 month, then obviously you're still fine.
If you can get 1 contract offer after trying for 3 months, I'd consider not
taking it.

Analyze and feel the market, so you can form your opinion instead of just
going based on stories that other people produce. Some people can't find a
low-paying job in the best of times. Some people will have plenty of
opportunities in the worst of times.

~~~
bluehatbrit
This seems pretty sensible advice to me. I've seen it go both ways for
contracts at the moment, some are really struggling and others are doing
really well.

As ever, with contracting you're always taking on some risk when you come to
the end of a contract. Much of your ability to get a contract will depend on
your network (as well as skills and experience).

A lot of it depends on whether OP is looking to do full time contracting and
leave their current job or just fill the 20% of their time they have now. But
either way, the best idea is to go and look for the work and see what's
around.

~~~
cs02rm0
+1

The picture seems to be mixed, not just in the contract market. That might
mean those out of contract are swarming around what's available, but you only
need to land one contract to get started.

Personally, I don't know _anyone_ who's not moved to a new contract for the
same client over the financial year boundary, but that's obviously just
anecdotal and most of the contractors I know are in the same sector.

------
Joe8Bit
The contract market in London is in a difficult place at the moment. IR35 has
generally made buyers weary (in a way they weren't before) as well as limited
the type of work contractors are given; budgets have also been very tightly
squeezed because of Corona, it's hitting contractors pretty hard.

As a 'buyer' of these services myself, full-stack JS dev contractors are in
one of the most oversaturated parts of the market and many in my network are
attempting to find full-time work at the moment. Those that aren't are having
to compete on rates in a way they never have before, definitely a buyers
market.

The other side of this is how much more volatile contractor work is than
before, many companies with a mixed full-time/contractor team see their
contractor pool as the most 'expendable' when cuts need to be made. Many
people in my network have had existing long-term contracts ended with little
to no notice.

I've also seen limited evidence the pushing back of IR35 to next year is
changing the policies towards contractors at large corporates, where (by
volume) most contractors get their contracts.

In short, I don't think it's the best time, but: if you do make the jump, make
sure you have contracts SIGNED before you make any big decisions. Not a hand-
shake or an email, a written contract. If you can get that, then you'll be in
a good place.

~~~
sbacic
Interesting. How is the market in London for frontend devs, specifically ones
working in the React stack (plus some GraphQL)?

I was in London last year and got the impression that it's a pretty lackluster
market - high cost of living, average earning potential. I did some back of
the napkin math and realized it only made sense if I worked remotely and
occasionally visited London (once a month, twice a month maybe?).

What do you think is the going rate in London for short-term (up to 3 months
max, preferable 1-1.5 month contracts) freelancers that don't live there but
can occasionally visit for meetings and such?

~~~
Joe8Bit
Pretty saturated as well, lots of FE folks looking for contracts at the
moment.

Day rates of £400-1000 a day for FE devs were common before COVID, now I’d
expect ~20% less than that but YMMV.

Remote and visiting occasional is getting a lot more common for contractors
these days, so you could detonate it work.

~~~
sefrost
£4-600 sure, but £1000 day rates? Who's getting that?

~~~
Joe8Bit
£1,000+ is pretty standard for Lead/Principal level engineers, in my
experience, especially in financial services where it's often even higher than
that.

------
colinloretz
Definitely. With such an economic contraction, you're going to see companies
hiring contractors for a while because they don't have to commit to the full
overhead of an employee. We saw a huge influx of freelancers in 2008-2009 and
as the economy grew pre-covid19, more and more freelancers took jobs at
companies because of salaries, benefits, etc. We will very likely see a repeat
of that.

Things to make sure of: make sure your rates take into account your overhead.
You're going to have to pay for your own insurance, pay withholding taxes,
business licenses, account for some time off/sick days, etc.

After years of freelancing, attempting to set aside money for taxes and
_never_ paying into retirement, I started using an app called
[https://www.catch.co/](https://www.catch.co/) to track all of this and it
allowed me to focus more on freelancing and less on the overhead.

------
msrpotus
If you can find clients to hire you, anything is possible. I started
freelancing during the Great Recession (because I couldn’t get a job) and was
able to make it work.

Find at least one client before you quit, though. And make sure you have at
least 6 months of savings so that even if that client fired you on day 1,
you’d be okay.

------
PunchTornado
From my experience in the last 2 months, companies are scaling back their IT
projects now. Got several contracts that were supposed to start later this
year and they were canceled.

So there will be more competition for less bread. But you can try.

~~~
stevehawk
Counter to that, a lot of companies are scaling up their web/mobile presence
and offerings because they can't let their customers into the building. I'm a
contract programmer and business is arguably booming.

~~~
tomlagier
What market segments are you seeing this in?

~~~
stevehawk
I mostly operate in the banking industry right now.

~~~
tomlagier
Good to know. Feels like a strong place to be. I'm just starting out and most
of my contacts are in advertising in one shape or another, which hasn't been
nearly as active.

I wonder if the best way to get started in a niche is to just start cold-
emailing with a service.

------
DataSciGuy_401
My sense is that freelancers become a lot more attractive in the short /
medium term because: \- WFH / remote work will be the norm for a while, and if
there's no benefit to having a FTE in the office with you, why not contract
lots of work out? \- freelancers are a lot more flexible in terms of overhead
than FTEs, and the economy will likely be jittery for a while

------
AznHisoka
Just anecdotally, I've been hearing from friends that work from Upwork hasn't
been affected from COVID. I think platforms like Upwork/Fiverr might even be
more enticing for employers during recessions. Of course the pay there is not
very competitive, but just giving you 1 data point.

~~~
dpau
personally on upwork i have noticed a decrease in "good" job postings and an
increase in proposals. anecdotal. but i think it's a mistake to assume that
_any_ business has not been fundamentally affected by covid in some way.

~~~
bdcravens
I'm sure it's also going to become a buyer's market, so the prices will drop.
Does Upwork have a "UK only" option? I know they have a "US only" option,
where you can bypass alot of the worst projects and the race to the bottom.

------
PappaPatat
I say (from experience) during hard times is the best time to start.

You will not be lured into massive fixed costs and start with the absolute
minimum and required, which you can scale up when your business start flying.

As long as you start tight, you will stand a good change.

~~~
chuck3201
What fixed costs would a freelancer have?

~~~
loriverkutya
\- an accountant \- web hosting \- email service \- company phone

------
saluki
Aside from the legalities regarding your employer/employment.

I expect more companies are going to be using freelancers for projects and
tasks to minimize using employees since everything is currently uncertain.

I wouldn't recommend using online services to find projects. Reach out to your
network (outside of your employer/co-workers) to find projects.

Research what to charge and how to manage your freelance projects.

Now could also be a good time to use your 20% time to build up an audience for
future info products or start stair stepping from products to a SaaS (Rob
Walling, see below).

You might enjoy StartupsForTheRestOfUs.com podcast, start in the archives with
episode 1.

Build Your SaaS is a great podcast as well.

Good luck.

------
rwieruch
It depends on your clients. Don't put all your eggs in one basket which I did.

My two current clients in Germany are heavily invested in the automotive
industry. They have everything on stop for the manufacturing and their
software department is not working their full 100% capacity. On the other
side, I hear lots of good news from people who are bringing physical services
to the web. The digital revolution is just starting here and people have to
keep up with more and more demand.

So yeah, I think there is lots of opportunity. It really depends on who you
are aiming for as clients.

~~~
HeyLaughingBoy
> bringing physical services to the web

What does that mean?

~~~
bdcravens
I presume companies who would never have considered online are being forced to
rethink their position. For example, I take Pilates and my instructor quickly
rethought how to do the exercises in order to continue remote sessions. Now
that she's done that work, her clients in the future will not be limited to
the local area.

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DrNuke
You have a network for sure and a lot of relevant people are still however
working, so just spend a couple of days networking from home, making cold
calls and preparing a portfolio?

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evanmoran
It's completely dependent on your ability to close the deal. If you can get
the business then yes, if not then no, and it's hard to tell which will happen
without you trying to get a deal signed. I'd recommend reaching out informally
to places you have contacts and going from there. If you get no traction then
you know the answer.

Also, make sure you setup the contract with short milestones as some companies
will slow in paying.

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MichaelMoser123
i used to be a contractor in 2002. I was not a big success, but it paid my
bills for that year. If you have similar inclinations then my advice is to
stick with your current job, as long as possible...

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jbverschoor
If you have to ask this, then just don’t

