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Downsides of Freelancing (vanschneider.com)
51 points by wallflower 13 days ago | hide | past | web | favorite | 45 comments

It’s been said many times on HN, but if you freelance and in case you missed it: 1. Double or triple your rates (if you are fairly new to this you’re likely not charging enough. 2. You are now a consultant. You don’t provide a service, you provide solutions (if you are not sure what you are solving, figure it out). Forget the term freelance and anything associated with it. 3. Stop charging hourly. Try day rate, week rate, bi-weekly. Experiment. 4. Be picky. Fire clients if you have to. You are not a tool, you are a business, act the part.

Yes it's been said many times and they make it sound so easy, yet its not!

>> "You are now a consultant" <- this kills me.

there are so many steps and effort before rising your rates, and becoming a consultant This is so similar to the "how to draw an owl" meme

I heard that advice from HN when I started freelance out of university at age 23.

I ended up embarassing myself a couple of times, by either:

- asking for a high day rate when I lacked experience (e.g., for freelance Rails work, when I kinda knew Rails but lacked experience with most of the tooling, testing frameworks, etc)

- trying to sell "consulting" work when I had only a vague idea how consulting worked.

So, yeah, while "charge more!!!" might be a useful message for underconfident programmers who don't know their own value, it's too simplistic and it omits many essential steps.

My takeway: if you plan to freelance long-term, you should treat it as a business, and plan to build a specialism. Once you've built a specialised skillset, and demonstrated credibility, then you should start systematically looking for higher-paying clients, and be confident in asking for what you are worth. But you have to know you are worth it, first. Once you've done that for a while, then you can start thinking about business-level problems and doing something higher level (which requires nailing a whole bunch of soft skills, too).

Another factor to consider is that if you're in a major city, there are probably other programmers doing freelance/contract work in your skillset, which you can use to gauge what a sensible rate would be, and what knowledge you need to gain.

Oh and - there's also the factor that as a newbie freelancer you often find the really crappy low-end clients that have a fixed budget and high expectations (e.g., small local businesses. I have nothing against small local businesses, but they're not good clients for freelance coding work). I went through a lot of stress working on such projects. Working for more high-paying, professional clients (digital agencies, banks that hire a lot of contractors, etc) is ironically a lot less stressful.

And finally - I never ended up doing freelance work for that long. It was only something I ended up doing in-between other stuff. I realised that it was not a career path I wanted to pursue -- if you are a very ambitious person, doing client work can become a grind after a few years. However, if you want to run a nice small business, starting off as a freelancer and growing into a small consultancy or digital agency can be a very good path to take. You will not become a billionaire, but plenty of people become millionaires that way.

What steps? You are your own boss, you can set your own rates to whatever you like. I think the challenge for most freelancers is fighting their own mind. Somehow, they feel they have to justify their rates and that someone is going to judge them. If you deliver significant value to a business you are helping, does that not justify it? I think a lot of it has to do with self-confidence and ability to think like a business, not a freelancer. If you constantly put yourself in an "employee" inferior position then you will think like that and behave accordingly. Set yourself free of that mindset and you will be on par with the people you talk to.

Actually, no. Step 1 is to increase your rates and start labeling yourself as a consultant. Step 2 is to start charging by the day, with an hour or two in each one reserved for your administrative work (email, prospecting, accounting, etc). The rest will follow.

And if a lead enquires about why you're so much more expensive than that option they found on some cheapo website, you can spell out the consultant's version of the iron triangle: cheap, competent, available; pick two.

Step 1 is to build a specialised skillset.

Step 2 is to network with people a few years ahead of you in your specialism, who can help you figure out how to do more "high-level" work in whatever you do and maybe bring you on as a junior person for some of their projects

Step 3 is to demonstrate credibility (portfolio of projects using your specialism, professional online presence, know how to sell yourself to clients, etc)

Step 4 is to increase your rates and start labeling yourself as a consultant

Acknowledging that you're a one-man business and thus you're the sole responsible for how your business is conducted is not remotely similar to the "how to draw an owl" meme. You only accept what you're willing to accept, and if a client decides to play you for a fool then the only person responsible for keeping a business arrangement that is clearly bad for you and works against your personal interests is yourself.

Can you explain what the work agreement is for a week rate? So if a client wants you to work for them they have to hire you for an entire week at a time?

Basically yeah, so you might charge 100/hour, and the client will get 40 hours @ 4,000 -- but your expectation is to put in 25-30 in dev work, 10 hours is spent in planning, meetings, consulting, give or take.

So the downside now is you have to be available for the whole week, which means you can't commit to other clients that week and you can't take time off? And you've got similar disadvantages with hourly billing where if you get through the work faster you'll have less work to charge for later and there's a cap on how much you can earn because there's only so many hours in the week?

Not saying other approaches are perfect but I'm trying to understand alternatives.

Sure, If you make it your own policy to work on one client at a time, you could have downtime that you still charge for. It doesn’t have to be this way though, retainer does not mean you have to be limited to one client. If you feel guilty that you don’t provide enough value for the work you do, go ahead and charge a half daily or a daily rate, and work on other projects on other days. Personally I will take on 1-2 clients max because that is all I can handle at a time without outsourcing parts of my process (have yet to try this). Essentially you can end up with 2 higher paying “jobs” and charge twice or 3 times what your colleagues are making in-house. It all depends on how you want to do things - you’re the boss.

not necessarily -- client pays for 1 week of your time, you could set that week to this week or next, perhaps you're finishing a week for client A, and then going to work 1 week for client B. -- the benefit is you also save a lot of time (and mind fuckery) having to make detailed hourly estimates that almost never are that accurate, it's much easier to estimate a week's worth of time than it is 5-10 hours worth and be super accurate. Also bigger clients don't really throw up much fuss one way or the other, they just want good developers/freelancers.

It depends on what you do. As a developer you may explore a day rate or a half day rate. I am a UX consultant and my minimum billing increment is 1 week. If the scope is less than a week I simply do not accept the work.

Why do you favour weekly billing over other pricing methods like fixed price? E.g. you could charge the same amount but could finish faster than a week. I usually do fixed when I can and something else if the project requires more flexibility.

Simple: scope creep. When companies want to expand the scope I don’t want to argue with them or say “no, look here” or even to sign another contract. With a weekly rate I just work as long as needed to complete the work. There is trust involved of course. If scope changes, no problem- I won’t make any fuss whatsoever and nothing needs changing, we just work the same we have been. Edit: I should also note that I have a much easier time closing leads when they see pricing broken down vs full quote up front. It’s the same price basically unless scope changes but psychologically it’s easier to accept.

> Simple: scope creep. When companies want to expand the scope I don’t want to argue with them or say “no, look here” or even to sign another contract.

What about when the requirements look unlikely to change though? You always think fixed price is not worth it or too difficult to arrange?

> With a weekly rate I just work as long as needed to complete the work

You mean you can finish in a few days and still get paid for 5 days? And if you take the full 5 days you'll probably get asked to do another week?

> Edit: I should also note that I have a much easier time closing leads when they see pricing broken down vs full quote up front. It’s the same price basically unless scope changes but psychologically it’s easier to accept.

Hmm, to me one problem with weekly from the perspective of the client is the friction it creates when they have to consider if they have enough work to keep you busy for the week to get their moneys worth. I think with fixed price the proposition of "result X for cost Y" is easier for them to weigh up rather than them having to think about time estimates.

My point is, if you're doing hourly billing or something similar, when your expertise allows you to get through the work quickly you'll end up billing for less hours so you make less money. Scope creep is a risk of fixed price but at least fixed price doesn't punish you for being more efficient. No system is perfect though so I appreciate your perspective.

Be a gatherer & not a hunter. In other words, find clients you can put on a monthly retainer instead of big projects that pay you once and force you to look for work for 5 months when done.

I have done this by working for a single employer. I got tired of the uncertainty of contracting and like the steady pay and benefits. Some people might think I'm a sucker but a feel like I sleep better these days (for the last decade, I guess).

Doing your own thing is not for everyone.

Are you saying parent is not doing his own thing, or that the people who think he's a sucker aren't doing their own thing?

I agree with the latter :)

There’s nothing wrong to work for an employer if it’s easier on your life. Some people prefer solo for whatever reason - whatever works for you ya know...

a lot of obvious stuff and it reads like an advertisement

When I first moved to Amsterdam, I gave myself a 3-month "trial period" to figure out if I could find work and if I wanted to stay. This sounded then like a good amount of time, but it goes by much quicker than you think. I only started to contact people when I arrived and looking back now, I probably should’ve started much earlier. Building a network is a slow process, so you have to start before you quit your job.

it's slow and hard? who knew. How does someone with no experience move in one of the most expensive cities and suddenly have a good living? Yeah a lot of stuff does not add up.

I gave up here:

> I must admit that I’ve also never worked with a contract and that I don’t have any other form of terms and conditions for clients to sign.

I'm not a freelancer, but this sounds pretty unprofessional to me.

Yes and no, but there are still people that can be honest to each other without contracts and nasty clauses and so on.

A job description though, that both parties know what to expect from each other. (When the work is done and payment is due) can be done in an email.

Ignoring other benefits like assigning liability, a contract isn't going to be able to force your client to pay under all circumstances anyway. Clients can always argue the work wasn't up to the standard they were expecting, they could later disagree with the interpretation of the requirements, clients can go bankrupt and be unable to pay you etc.

In terms of getting paid, knowing which clients and projects to avoid, controlling scope creep, setting expectations and structuring work to get paid as you go are more important in my opinion. Once you're at the stage of pointing to contract terms the project is probably on rocky territory already where your client isn't going to be happy at the end of it.

Get a contract as well but I keep reading people talking about getting "air tight contracts" as if they're the most important part of getting paid.

> Yes and no, but there are still people that can be honest to each other without contracts and nasty clauses and so on.

Contracts are not about honesty. They are a way to avoid having to negotiate how to act when predictable problems occur by setting the conditions (i.e., what to do when something happens) on paper.

If a project stays permanently on its happy path then you don't need safeguard clauses, but often it doesn't and having to decide how to proceed after problems occur is not easy or enjoyable for any part, because someone's ideal solution may not be aligned with someone else's best interests.

I meant that some people will not be honest and fair if things aren’t 100% in writing with signatures, and that’s on both sides

Consultant here. No contracts. Never had any issues.

Email has been my primary "contract" for a large proportion of my freelance gigs. Maybe it has to do with the type of services you provide?

I definitely got started without these things, though I was working for an agency. To do it full time without those things? Never.

With working from home and unlimited vacations becoming more and more widespread, I wonder are there any upsides left in freelancing?

Quite a lot I think - setting your own hours, picking what you work on, picking who you work with, picking how you work (tools, meetings, 100% remote etc.), being able to work on side projects you can profit from without them being owned by your employer, potential to earn a lot more since you're working directly with clients, not having a boss to answer to (you have to answer to clients but not in the same way especially since you have multiple clients) and lots of freedom around vacations (which I'm guessing is closer to "unlimited vacations" than you'd get from an employer).

Unstable income, having to market yourself and more means it isn't for everyone though.

> being able to work on side projects you can profit from without them being owned by your employer

Is not being able to even legal? I'm pretty sure employer can't put anything like that in the work contract where I live. My spare time is my time. Sure one can sign a non-competing clause, but employer owning your side projects sounds just insane.

Discussion on this from 2011: https://news.ycombinator.com/item?id=2208056

Not having to deal with the politics of the office or working with people you don’t like. Setting your own pay. I dunno, those seem like good ones to me.

Diversification. Personally speaking being accountable to a few customers has many mental benefits vs catering to the whims of a single boss.

Doesn't unlimited vacation just mean, take 3 weeks a year with your boss's permission if she/he gives it, or take a smaller bonus at the end of the year if you take more than your peers, or be shamed?

I've never heard anything about unlimited PTO that wasn't a riddle of caution and skepticism.

I'd imagine so... I don't see someone taking 15 weeks a year sticking around long, unless they're a bought out CEO just sitting around to vesting and leading their team when needed, or they're a level 10 developer that is 1 in a million and can't be replaced.

Paying lower taxes is generally another one. Employees generally can't deduct much.

Still offers greater upside on salary/income progression.

I make 3x as much as freelancer for the same work.

seriously? most I ever could get from a day job was about 50/hour, now I get $100-140 depending on size of company, and moving up from there. The downside though is making sure I get paid in a timely manner and always have a pipeline is a bit rough. (Freelance fullstack developer using: nodejs, laravel backends and vue frontends with bootstrap, vuetify, and elementui as primary frontend frameworks.)

I meant I make much more as a freelancer than I did working a job. So we agree completely.

A big surprise many run into: the amount of time it takes to find and sign up new work (“sales”).

It can be incredibly time-consuming, leads to a bunch of stress and uncertainty, and you can’t really bill for it.

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