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Ask HN: How to move beyond “freelancer”?
322 points by ryannevius on March 30, 2015 | hide | past | favorite | 123 comments
I've been doing freelance web development for the past 7 years. I have consistent work and "OK" pay. I've experimented with my rates over time, and am at a point where I have trouble finding work if I raise them...but become part of the "commodity freelancer market" if I charge less.

Last year, I had a client (who had their own client...which we'll call the "true client") for a big project. At the beginning of the project, upon receiving my quote, my client told me that it was "way above" what the true client was willing to pay. I asked for more clear budget numbers, and was told very clearly that it was 60% of my original quote. After days of negotiations, I ended up reducing my quote considerably. Keep in mind, this did NOT involve me reducing my rate; I know better.

Part-way through the project, I found out that not only was my original quote under the true client's budget, but my client had also quoted them a price which was 3 times my original quote amount. Not only that...but they had used my quote to create their own, and then proceeded to cut me down farther.

I felt undervalued and belittled by the news. I wasn't upset about another company profiting off of me (of course that's going to happen by default, if I'm working through an intermediary). Rather, I was really bothered by the nickel-and-diming and flat-out lies I was told about the project's constraints and budget.

Since that time, I've paid closer attention to the companies I work with. They're consistently profiting off of me at ridiculous rates; however, if I raise my rates to compensate, I don't get work. I've tried to form my own "digital agency" with another partner...but we had a harder time finding work as a new agency than as freelancers.

TL;DR: I'm tired of being nickel-and-dimed, and want to move beyond the "freelancer" title. How did you become the digital agency that you are today? How did you drop the "freelancer" title and make something more of your daily life?

Sorry to burst your bubble, but you're not a freelancer, you're a contract developer. I make a lot of money off of guys like you, because I have relationships with the guys who ultimately hire you. They're willing to pay me $120/hr for a developer because they trust me to fix things if they get fucked up. I pay a staffing firm $90/hr, and the staffing firm pays you $65/hr. You get fucked over because you're playing the wrong game; clients don't pick up the phone and call you because you do good work, they pick up the phone and call you because they remember who you are and like you.

If you were really a "freelancer" or "consultant" instead of a contract developer, you would have these relationships yourself. You would be able to convince your clients to cut out the middleman and pay you $100/hr instead of paying me $120/hr. But first, you have to build that trust with the people ultimately paying for your services. This generally means upping your game with respect to salesmanship, which isn't something you can "hack". It also means turning down opportunities that may pay well, but don't offer any opportunity for building relationships.

Again, that's the thread that's missing here: personal relationships. Get to know your clients, understand what needs they have, and make them like you enough as a person that they think "Hey, I need a developer. I wonder if ryannevius is available?" You and your friend had a hard time starting an agency because you don't have a pool of potential clients because you don't have that symbolic rolodex of people you can call. You're selling professional services, and professional services are sold through person-to-person relationships.

The tone of this comment sounds a little aggressive, but, in my experience, the following is the truest advice:

> clients don't pick up the phone and call you because you do good work, they pick up the phone and call you because they remember who you are and like you

People want to work with people they like (and to like them they first need to meet them).

They'd rather work with people they like, that do good work, than people they like that do bad work, but given the choice, they will pick people they know and like, that are mediocre, over "superstars" that they don't know and/or don't like.

Which means

- if you don't have direct access to the final ("real") customer, you're mostly wasting your time

- extra hours spent turning out stellar work would be a 1000 times more productive/useful getting to know your clients on a personal basis

- relationships with "customers" will only last as long as the people you're interacting with stay at the company; when people change companies, it's sometimes more effective to follow them to their new home than try to build a new relationship with the new team at the old company

- intermediaries are vampires; do not go near them. They fear light: expose them and they will flee.

Good luck.

I didn't mean to come off as aggressive :) But the reality is that there is way more money in knowing people than in doing work. The sooner in your career you can make the transition from being someone who creates value by doing work to someone who creates value by knowing people, the happier you will be and the more control you will have over your destiny.

I like to think of myself as someone who takes pride in their craftsmanship (whatever the craft may be); I'd imagine many developers feel similarly. As such, this advice stings. But it really has the ring of one of life's "hard truths", and so thanks for being direct (in both of your comments).

It shouldn't sting! Doing a good job is the first step in building a relationship, so you should absolutely work hard and take pride in your work. I'm only able to leverage my relationships to make easy money because my clients trust the quality of my work (and I ensure the quality of the people who are hired through me). Doing good work builds trust, but unfortunately many people stop at that.

I'd recommend reading The Trusted Advisor [1]. It was originally written with management consultants in mind, but it is a good guideline in general for how to walk the line between personal and work relationships. Basically, you should look at your clients as you would a friend: be their friend, know their problems, and help them with those problems. Become invested in them and their success, and they will invest in you. Business is ultimately about people, but I feel many technical workers focus on the technology and get screwed over as a result.

[1] http://www.amazon.com/The-Trusted-Advisor-David-Maister/dp/0...

Thanks for the recommendation! I'll be sure to check it out.

But the reality is that there is way more money in knowing people than in doing work.

There is truth in this, in that knowing people is a prerequisite for getting to the higher tiers of income. If you don't know people to get good gigs, you will inevitably have to go via one or more intermediaries who do, and they will all take a cut. How much of a cut depends on your business skills, not your technical skills.

A related but distinct issue is that clients who hire via agency-style intermediaries tend to have a ceiling on how much they are willing to pay, much as employers do. Even if the quality of your work would fit above that ceiling, it will be almost impossible to break through as someone else's hired help or as one freelancer among many on an agency's books.

On the other hand, once you have a few good contacts in your personal network and a worthwhile professional reputation as an independent, the "new business" side of things can almost start to take care of itself. Then if you're also good at getting the job done, you can either make significantly more as an individual consultant or start to build your own business and probably one way or another become some sort of intermediary yourself, and either way you'll have a lot more options than someone who talks a good talk but doesn't have the technical skills to walk the walk.

I think knowing people is a component, but I wouldn't generalize. It works for you, but I disagree that it's a rule.

My aunt knows a sh*tload of people but doesn't get any jobs.

I'm a freelancer and deal directly with the client whom—admittedly—hire me because they like me BUT, I can also get the job done.

>> It also means turning down opportunities that may pay well, but don't offer any opportunity for building relationships.

Spot on. This is the hard truth.

My experience has been similar this week. I was in a situation to decide between Opportunity (with Higher rate) vs Opportunity (Building relationship). Glad I chose the second option.

Exelius, I don't see the contact info in your profile. Is there a way to contact? My email is in my profile.

>But the reality is that there is way more money in knowing people than in doing work.

Unless, you know, you enjoy doing the actual work more than being essentially a manager/middleman.

The most profitable advice I've gotten for charging good rates comes from two sources:

1. Jim Camp's negotiation book, "Start with No": http://www.amazon.com/Start-No-Negotiating-Tools-that-ebook/... One key takeaway: You can refuse to compromise on your rates, provided that you can afford to walk away if necessary.

2. Patrick McKenzie's (patio11's) advice for moving beyond the "freelancer" title, in particular http://www.kalzumeus.com/2011/10/28/dont-call-yourself-a-pro... and http://www.kalzumeus.com/2012/09/17/ramit-sethi-and-patrick-...

I used these strategies to double my daily rate as an Ember.js consultant from $1k to $2k, and it was a fairly straightforward exercise in the end.

"You can refuse to compromise on your rates, provided that you can afford to walk away if necessary" I also wanted to move away from so-called freelancing, but in the end I discovered that it gives me incredible flexibility: I now cherry-pick my clients, taking only projects that are challenging and truly stimulating. I charge a very high hourly rate but I also put my soul into the project, and in the end the clients are more than happy with the work. This allows me to work for ~4 months/year(in blocks, of course), and the rest of the year is spent on personal projects, travelling and building (self-driving)race cars. Try to find your niche and go for it, it's really worth trying!

The thought of this is what keeps me going. Bravo Sir. Bravo.

You sir, seem to have figured out the secret to life and happiness!

>You can refuse to compromise on your rates, provided that you can afford to walk away if necessary.

This is very important advice, and I've applied it to car purchases, condo lease agreements, cable and phone contracts, you name it.

It's about leverage. If you have alternatives, and what the person on the other side of the table offers doesn't fit your needs, take your business elsewhere. You have to be prepared to leave or say no.

On the other hand, if you can't say no, then you don't have any leverage.

This is mostly true, but not entirely.

The key is the perception of the other party, not the actual reality of whether you can say no or not.

Robert Ringer's amazing (and must read) book, "Winning Through Intimidation." Talks about how he manufactured the perception of being able to walk away, and why image and perception are more important than actual circumstances.

It's of course much simpler to play the part of being able to say no, when you can actually walk away...but you can hack your own perception to believe you can walk away even if you can't, and pull it off... or you can be a good actor and take some risks...

Either way... The premise is true...but it's more about the story you are selling than anything else.

Would love to hear more about the book you mentioned "Winning Through Intimidation". Just marked as to read on Goodreads. What'd you like about it?

Where do I begin :)

My favorite quote from the book is...

"I didn't mean to cut off your hands, but I had no choice when you reached for my chips." This is his argument for DEMANDING a contract for every business deal, especially with friends or people you trust. (I admit I am not great at this...)

He opens with a theory that most successful people who claim "hard work and a positive attitude" drive success are lying. They are either too embarrassed to admit how easy it was for them...or they can't see the forest from the trees and really have no idea why they are successful.

He has a few key points that really stand out for me...

"The results you get from a negotiation are inversely proportionate to how intimidated you are."

"With every deal...The key is to hope for a good result, but expect a negative one. (otherwise you will get discouraged way too quickly and give up.)

Image is everything... "It’s Not What You Say Or Do That Counts, But What Your Posture Is When You Say Or Do it."

I wrote a few blog posts over the years about his book... http://www.davidmelamed.com/2012/11/19/robert-ringers-theory...


Edit: I have a few extra copies. Would be happy to mail one to the first two people who ask. Just find my email on my profile and email me.

I'd love to read that book, but I'm not comfortable giving out an address.

Do you have a link to amazon? I'm willing to buy the book and give you a little profit while doing so.

http://www.amazon.com/gp/product/0449207862/ref=as_li_tl?ie=... (affiliate link)

http://www.amazon.com/Winning-Through-Intimidation-Robert-Ri... (Non affiliate link)


I actually have a Prime account and Kindle so I was able to read the book for free using the Kindle Owners Lending Library.

http://www.amazon.com/Winning-Through-Intimidation-Robert-Ri... (kindle edition link affiliate free)

http://www.amazon.com/gp/product/B00KQZU7SY/ref=as_li_tl?ie=... (kindle edition link with affiliate id)

Doesn't seem to be available on Amazon, try on abebooks http://www.abebooks.com/servlet/SearchResults?sts=t&tn=Winni... it is a few bucks (book + shipping).

Booko lists 7 editions, latest one published October 2013: https://booko.info/works/65280 which is also the cheapest.

You are better off finding a local goodwill or used book store. It was a very popular book in the 70's and 80's...

I was able to find a used copy published in 2013 on Amazon :)

Sounds like a pretty interesting book. Is this the one? http://goo.gl/FXXRTy

"It's about leverage."

I highly recommend Winning Through Intimidation. It's not about what you think. I read it after someone else recommended it in another discussion on HN.


UPDATE: After posting this I read the sibling comments and see someone else also recommended the book. Seriously, read it!

> On the other hand, if you can't say no, then you don't have any leverage.

Yes. You can try to bluff, but someone might call you.

High five.

Strange, Amazon shows that the "No" ebook is "not currently available for purchase."

Edit: This appears to be a newer edition, and one that's available as an ebook: http://www.amazon.com/Start-No-Negotiating-Tools-that-ebook/...

Have you tried offering more money? ;)

"No" ;)

Yup, thanks - I've updated the parent.

I have been a web-dev freelancer for 5 years and is now building a small team to make quality websites (mostly webtools).

Some random things I learnt from the transition :

- The most interesting projects rarely (mostly never) relies on a one person "team". Big projects are important for the customer and they need to know they will have someone to contact even if it's holiday time. You want the true customer to buy from you interesting projects : don't be alone.

- Once you have a team, you will look for interesting projects. They are more complicated to get. They often come from medium / large organization. Those orgs. have important inertia. Projects can take weeks of month to start. Chase multiple projects at the same time.

- Once you have bigger project you must learn to make precise time evaluation. It is really complicated. It must be done before the project is sold but you must not spend too much time on it. It is key since you want to earn money (no brainer) but mostly to have a smooth production calendar.

In my case, we are just a team of two. I spend half time in sales activities and the other developing websites. My coworker is full time dev.

If you want to discuss in details, reply here or email me : paul@agence-donatello.fr

Good luck ! There are freakingly high mountains of demands and needs outside. You can take your piece.

This is really interesting. So, you are basically saying if you want to work on interesting projects, your options are:

   * join a team (as a contractor or as an employee, and take the rate cut)
   * build a team (and move from development to project management, at least part of the time)
   * become a 'name' in an area and become a true consultant--specialize, but don't pick the wrong area, or if you do, be prepared to switch gears.  (You didn't have this, but I've seen this work as well.)

Joining or building a team doesn't have to be a choice between becoming an employee or a manager of employees.

A few of the most successful freelancers I know have formed 2-3 person partnerships. All of the partners were individual freelancers before, but teaming up allows them to tackle bigger projects, and reassure clients that a holiday or sick time won't stop their project.

Every project still needs some project and client management, but overall it seems that the time each partner spends on "management" is actually reduced in this format.

Or be a contractor (in this case you might only execute interesting projects, not design/think them).

Wouldn't it be more precise to day 'or be a subcontractor'?

Sorry for the multiple typos. I was on a rush.

Seth Godin told me if you want to be a entrpreneuer, you need to hire others to do EVERYTHING you can possibly outsource.

Otherwise you will hire the cheapest labor -which is yourself...and you'll never break free of being a freelancer.

My personal advice...the reason raising your rates isn't working for you is because "you don't get the work." This is key...if you need the work, you will never successfully raise your rates.

I have fetched $350/hr for SEM consulting...when you can easily hire an experienced pro for $50 and someone more experienced than me for $175. How do I charge that much? It's simple. My opportunity cost let's me turn down lower paying gigs.

The secret to winning a negotiation is going in believeing you can walk away without feeling like you missed out. If you can walk away....you are in the driver's seat.

Or in other words,

"The power to destroy a thing is the absolute control over it."

   - Paul-Muad'Dib to the Guild navigators, at his confrontation with the Emperor Shaddam IV.

>> The secret to winning a negotiation is going in believeing you can walk away without feeling like you missed out.

Well said and always works. In every business.

Car dealers would absolutely hate for people to know that.

People who know that probably don't walk into car dealerships...

Well, need to go into the dealership to test drive the cars.

Recently I went through the car buying experience. Here's what have happened. I did some research online to see the models and the prices of the car. Then I started with Costco's car buying program, which referred me to a dealer. Went to the dealership to test drive, and negotiated to a price that they won't sell. I walked. Went online and emailed all the dealerships in the area for a quote on the car spec I gave. One of the dealers actually emailed back with a quote below the test-driven dealer's price. Went over to pick up the car.

Where would they go instead?

Do some research, make a short list of cars that you want (and can afford), have some range of quotes from various websites (I used to check truecar and KBB, not sure if it's still a good source). Then make a few phone calls to the dealers, press for prices (with the exact base model and add-ons you need). Any dealer who doesn't want to give a quote, you can walk away, or rather, end the phone call.

A few years back, it took me half a day researching and half a day visiting two dealers to get the car I wanted, at a reasonable price: I think it was in the 90% percentile cheaper in true car's range, even though I bought my car in SF bay area, which is supposedly more expensive than the average price.

It's not hard to find auto wholesale prices online. Most dealers these days you can call up and say, "hey, I know your wholesale price on this car is $x, can you give me the car for $100 more than that?" They're pretty used to this anymore; they don't expect to make anything on "internet orders". If nothing else, it adds revenue and sales volume to their aggregate numbers.

One of the people in the car dealing industry I talked to recently told me that the business model now is not based on selling new cars, but to sell services/insurances and a bit from used cars. This makes total sense because they got the first placement for the services, and people are probably not as prepared with service/insurance quotes compared with new car price quotes :) Maybe this is also why Tesla gets a hard time with the auto dealers when they want to do after sale services too.

I did this successfully with my agency http://bootstrapheroes.com/ https://experts.shopify.com/socialproof-it we grew from a team of two to 10+. The biggest lesson I learned is if you want to create an agency you need to become one of the top experts in a specific area that is relatively new and growing like crazy. In new areas their is no experts so very easy in the beginning to become one or fake it until you are one. For me it was becoming one of the top Shopify app development experts. If I had tried to start an agency in a mature market like development for Magento/ Drupal sites I would have had a way harder time for their is lots of agencies with great track records in these areas.

I freelanced full-time for several years. I had similar experiences.

I found that the key was to find clients who value your work. Working with individuals or small businesses can be tough because they are usually highly constrained by budget and do not understand everything that goes in to what you do. They want freelancers because they can't afford full time people. They will compare you to the rates they can find on Craigslist or Elance and balk when you require market rates.

Instead, find startups with technical people doing the recruiting or large companies with established roles and processes for freelancers. They will at least understand market rates and what you actually do.

You also need to have the power to say no to clients. That usually means savings and the willingness to wait long periods between jobs in order to find the right one. For me, the hit rate of was 1 out of every 8-10 job opportunities.

If you wait long periods of time, does that not reduce your overall hourly rate? Because if you are doing nothing your hourly rate is $0. With such a strategy can you make as much as someone who is full time employee or someone who charges much less but who is filling most of his/her hours?

It's a long term game plan. I found that by substantially raising my rates, yes, work was slow in the beginning. But as time and my rep spread, I now find myself at a comfortable level of work, and gre at money as well. If the trajectory keeps going this way I may double my rates again, even with prior clients. If you produce more value for them than they pay, the good clients will pay. Especially after they switch to someone cheaper and don't get the value they are used to.

No. The purpose is to build quality business and reputation. One of my strategies is to work remotely on stuff I don't particularly love, make sure it's not full-time, and work part-time on developing a reputation locally for what I really want which sometimes leverages other work that I've done.

Do not bill hourly. Bill daily.

If you bill daily, how many hours would you work per day ? 8 or 10 or 16?

This comes up every time people ask about billing daily. You're not billing hourly, you're billing daily, so the number of hours you work doesn't matter.

Some days is 4 hours, some days its 8 hours, some days it's 10 hours. Do more 4 hour days. You're probably only productive for the time period, anyway.

Do not bill daily. Bill per project.

I like project billing, but the upside of time & materials billing is that your time gets a fixed valuation at the beginning of the project. Project billing puts you on the hook for things that come up unexpectedly during the project.

Both are better than hourly billing!

I agree with the value based pricing concept but I don't think it's _always_ effective for newer freelancers or larger projects.

For newer freelancers, it's important to be able to establish an hourly rate that meets your financial goals. For most, that would include a salary, expenses and then profit for your business. After you're receiving steady work at your base rate, you can start experimenting with daily billing, project based billing, increasing your hourly rate and so forth. But it takes time to get there.

For larger projects, there's inevitably scope creep and project based billing can be dangerous. I've been burned a number of times on large projects and now I put a "10% overage" clause in my estimates. If the time to completion is more than 10% over my estimate the project immediately jumps into hourly billing. It opens up a conversation very early on and sets an expectation that my work is not an open checkbook.

Only if you never learned the lesson of feature creep on a fixed budget project. Always put a limit on the time you spend.

Of course! The great thing about project-based billing (in my opinion) is that it forces you (and your client) to come up with clear requirements at the beginning of the project, and anything extra is an additional scope of work. Of course if the requirements are unclear, hourly would be a better option.

Initially, it does. But once you get repeat business and referrals at a higher rate, your net rate goes up again.

"Working with individuals or small businesses can be tough because they are usually highly constrained by budget and do not understand everything that goes in to what you do. They want freelancers because they can't afford full time people."

I've also found this to be very true.

When I'm evaluating clients I consider whether or not the person writing the check is using their own money. More mature clients often have a marketing director or employee that has a budget. With entrepreneurs and small businesses, you're often speaking to the owner and they tend to care more about how much something costs. It's just more difficult.

I like tptacek's list but I'm wondering about how to get clients.

tirrellp makes a good point, though. I guess that's how?

You work really hard to get your first clients, fighting for each billable day, dealing with lots of dry spells. Then you "roll them up": you over-deliver and establish a reputation at those clients, find more work inside of them, and ask them for referrals. The stories you generate from over-delivering becomes the ammunition for any promotional work you to to generate new bluebird inbound clients.

There is no secret trick to getting those first clients. It's a scary suck for most people who build successful consultancies. The "trick" is in carefully and aggressively exploiting those hard-to-get first clients in order to make subsequent clients easier and easier to get.

Here's how I got my first clients:

1. At university there was a billboard for people looking for developers.

2. Responded to everyone, with a ridiculously low price of $25.

3. Completed first job with flying colors. Collect glowing reference.

4. Stitch up reference on to personal website.

5. Hike price by 50%, find next client.

6. Rinse and repeat.

I got up to $100 per hour for some clients[1], or $450 per day for other clients, before I finally found a full time developer job.

I'm glad I did this freelancing thing because my company knows I can walk any time and make 6-figures on my own.

I still get pinged by my former clients about new projects and refer them to friends.

[1] (I was offered $115 one time but I felt that was too much of a raise - I priced myself at the highest possible rate where I am certain I will receive a glowing reference. And glowing references means raises.)

P.S. I read patio11 and tptacek's advice at the time it was very useful.

Why did you switch to full time job if you were successful as a consultant?

I haven't tried being a full time developer.

As a consultant it's rare I had engagements lasting more than a couple of months. At a company there's more of a "narrative". It's like reading short stories vs reading a novel, both are good at various times.

Here's some solid advice which I used to make the transfer myself.

First of all, pick a niche industry and own it. Too many agencies I see are just out to make money by developing as many apps and sites as possible. This means a lot of cold calling into different industries and talking to a lot of different people with different needs. If you stick with one industry, pretty soon, you'll find areas where you can really start to focus. This in turn makes you valuable to not only business, but then your name starts to get passed around since you have specific ways you're helping other people in that industry. Less cold calling and more referrals is what follows then. I would also start locally, get as many customers in your local niche then broaden out, go regional, then national.

Secondly, the one thing that has made my agency successful is minimizing overhead. It's basically me and my partner. We work from our homes, but are in constant contact with each other (technology is great ain't it?). This means, no employees to pay, no office rent, no heating bills, no additional hardware or furniture. It allows us to keep our rates fairly low and still have a very nice profit margin since we have so little upfront costs. This also benefits our clients since it saves them money too.

Lastly, I use a progressive billing system. I start out working with my clients on an hourly rate - mainly doing consultation work. Then once we start having steady work, I go to them and say, "Hey, you're paying a lot for my hourly rate since and we're always doing work for you, why don't we just set up a monthly total (a 5-8% discount off my hourly rate) with a minimum of hours I need to work for your company each month and go from there?" 90% of our clients have switched over to a monthly or yearly billing subscription. This is a biggie since you don't have to worry so much about where your next project is coming from, you can really focus on your clients and know you have a steady stream of revenue coming in. This also allows you to continue to cold call and bring in new business - makes a huge difference compared to working project to project.

Hope this helps!

Most people run into this at some point. Many times a business will try and take advantage of freelancers and beat you down on rate because "some guy" is 50% cheaper or whatever. You have to learn to walk away from these deals, that is part of what changes you from freelancer to consultant. A consultant knows to walk away from these deals or arguments because you cannot win in a race to the bottom. Not that being a consultant is better than being a freelancer, I just feel it is a mental shift in how you approach deals and set them up.

People have suggested building our own product. That is all well and good, and honestly at some point you will want to stop selling your time because your time is finite and can't be scaled. That's when product development becomes more attractive. But if you are still having fun writing other peoples stuff and just want to get out of a rut and increase your rate then you can do that.

Pricing is a skill, we charge weekly rates (based on 32hrs) per person and honestly most clients equate that to an hourly rate in the end. We also set a minimum charge for all projects and bill based upon value delivered instead of hours when appropriate, for example, we just picked up a small project < 1 week in duration where we charged $7k. Every time a potential client starts trying to negotiate our rate down, I move the conversation to value and most of the time I can win solid deals and I don't negotiate my rate down. I have in the past, but once someone knows you will negotiate your rate, they will always go for more and you end up in a death spin to the bottom.

Nice thread there since I'm pretty new in Web Dev+Design freelancing (2y part-time, 7m full-time), but I think I've got in touch with a hint of an answer few days ago.

Someone came to me 2 weeks ago with a clear idea of copying a website, because her business was in the same market. We finally met 3 days ago about her project, and she told me she has seen 5 freelancers and 2 agencies for her website, but she still wanted to speak with me because she wasn't decided yet.

The first thing I asked her was: "Can you explain me about your business ? And what process the customer is going through ?". Then we went through a pleasant hour-long brainstorming phase, until she realized her point was totally different from the existing website she wanted to copy, and that we ended up with a way better and more suited solution for her. She surpisingly said : "You're the only one that asked me those things, and I loved it!".

Then I asked her how it went with those 7 other clients and she told me nobody cared about her business, and how they only seemed to want to get the contract, at any price. Even though some of them looked professionals, she wasn't sold.

After this meeting, I understood that a freelancer shouldn't be positioned as an "expert" sitting at the opposite of his client, but as someone sitting alongside his client, as a friend caring about their goals. When you're the right person, your time is invaluable, and your price will be the right one.

In conclusion, there is a lot of bad freelancers out there. Just be nice, get close to your client by genuinely caring about their problem, be honest , and you will build a strong network that will like you, trust you, and pay you well.

How much of a commodity is your work? Are you doing work that most web devs could do? For example vanilla PHP is easier to find than a cutting edge SPA developer who knows the latest frameworks, architecting important services, etc.

How good are your communication skills? In consulting/freelance/contract this is huge. You will never be able to charge as much as someone who has great rapport with the customer, articulates points in a clear way, and shows understanding of the big picture goals.

How big are the companies you work with? As a rule of thumb small companies are not usually paying the highest rates. Small companies have more interesting work, but pick your poison.

What percentile are you capabilities in? This requires some brutal self honesty but usually it's harder to get top rates if you are not at the top of your field.

Do you try to work remote? Jobs usually pay more if you are willing to stay on site most of the time. Hate this but it's true.

Do you have an impressive portfolio of work to show? When people see it do they "ok, thanks", or do they say "wow that's really cool"?

The good news is you can change and improve everything on this list.

It sounds like you are a successful freelancer. What you are trying to become is a successful business owner.

You need to hire a couple people to write code, and start selling full time. This is where things get hard. I haven't made it work correctly yet either. Good luck!

This is the reason the EMyth was written - to help freelancers become entrepreneurs. Read it if you have the time.

Is this emyth.com? Or the book on Amazon, or is there a relation between the two?

Edit: Wow. In the small sample on Audible this guy already mentions something I've seen over and over with the clients I work with.

When you start your company you go from employee to business owner. But your mind stays in employee mode. You keep doing your job just like an employee. You get over worked (those 80 hour weeks) and never thrive.

Everything you do needs to involve building a process to hand off to someone else. Otherwise you are simply substituting a 40 hour work week for an 80 hour work week.

Everything you do needs to involve building a process to hand off to someone else

Derek Sivers also discusses this issue in Anything You Want (http://www.amazon.com/gp/product/1936719118), which one of my favorite books, ever, and highly recommended.

It's this: http://www.amazon.co.uk/E-Myth-Revisited-Small-Businesses-Ab...

One of the best books out there on how to build and grow a business.

There's also a company based on the book, https://emyth.com

It's all about relationships and the client's experience. If it helps, think of the clients as users of an app, who go through an onboarding process. How do they discover the app? What do they associate with the brand? What steps do they go through and what is the conversion rate on the "funnel"?

You simply build your brand, including a website, a blog and attract people to it. Get known widely (by having content that people share) and deeply (through good work and referrals). This takes time to build. But it's like any other brand.

Basically, you need a brand, and cultivate relationships. Probably the best two pieces of advice I can give you are:

1) Make it safe to fail, so you can iterate and try better things. For example, have 100 users and only try a particular pricing or offer with 5 of them. A/B test various website designs, email marketing strategies, etc. Partner with one or more business developers who are passionate about client relations, and give them % of PROJECTS, not the company. This way, if anything fails, it doesn't bring down the whole thing. And you can do this "all day" because your expected value is always nonzero, so the more you do it, the more you get. You can even hire others to do your job for you - again, on commission. Like 2 levels of MLM.

2) Establish relationships before you need them. Network, and let people know what you need without pushing them. Over time when you really need something, you do 90% of the work (set up the whole experience etc) and let them know how they can be of help by doing only 10% of the work. Something simple and well-defined that starts off your onboarding process. Inbound leads basically, and "warm introductions".

To get more in depth than patio11's link below, I would recommend looking at Brennan Dunn's courses (the free one is great to get started), and at the risk of being accused of self promotion: sign up to my course at: productizedconsulting.com (free and my own service was inspired by Patrick and Brennan's workshop a while back)

The TLDR is: package a small part of your expertise as a product, and sell it as a SaaS. Having dependable recurring revenue is a game changer.

A wholehearted +1 to this. Brennan's courses and newsletter have done quite a bit in opening me up to how to properly run a solo consulting business. He provides a huge amount of good information.

Thanks for the suggestions - I signed up for Brennan course and yours. I am on the "interested but not ready" side of consulting and want to learn as much as possible before jumping in. Looking forward to your course!

Thank you - hope the course helps you. The reframing into product focus has been a life changer for me. (And I say that as a YC alumni)

"but my client had also quoted them a price which was 3 times my original quote amount."

There's your answer. You just found your new rates. Get a part-time dev job if you lose work for a while, to keep the lights on. Stick to that 3X amount and don't waver. Profit.

I wrote about how I stopped freelancing and joined an agency. If you can't setup your own one (for whatever reason), then it's worth looking around for existing agencies who have established themselves and know all the ropes. Here's my post: http://blog.higg.im/2014/12/06/freelancing-financial-freedom...

My post was inspired by a great book called "stop thinking like a freelancer". It's a good read ― http://myshar.es/freelancer-book

You can consider becoming a consultant. See "Don't Call Yourself a Programmer"[0] by Patrick McKenzie. Also see the link he posted to another thread.[1]

You're being nickel-and-dimed because you don't value yourself enough. Stop charging hourly rates and stop working for middlemen.

[0] http://www.kalzumeus.com/2011/10/28/dont-call-yourself-a-pro...

[1] https://news.ycombinator.com/item?id=4245960#up_4247615

Finding direct clients/projects/work is the harder work, and as such, you'll make more when people come to you directly, but you'll need to spend time actually making connections and selling (vs being sold).

What are you doing to find work directly?

I'm not OP but how do you find work/clients/projects? I saw a posting earlier that had some suggestions.

Nearly all networking and word-of-mouth. Sounds trite, but... some suggestions:

1. Go to technical meetup/groups relating to technology you're interested in. Get known in that community.

2. Go to technical meetup/groups relating to technology you're NOT interested in. Get known in the community. With PHP and Java skills, I go to the .NET group a few times a year. When some of those folks I network with need PHP, I'm the first (and sometimes only) person they think of.

3. Go to industry group meetings that relate to a particular industry you want to serve - education, govt, manufacturing, retail, etc. Learn who's doing what, what their terms are, etc. Start making connections there.

4. Go out of your way to connect people in your existing network who you think might be able to benefit each other. Invite them for a mutual coffee, make introductions. See what happens.

5. If there's not any sort of meetup in your area that doesn't cater to your interests, start one, and publicize it. If it's successful, you'll be one of the 'go to' folks for that topic in your area.

There are many other steps and paths to follow; this is just one I point out to people.

For me and most of the folks I know this isn't a fast process, but it does have payoffs over the long haul.

These are very good points. It's what I tried but it seems like I never met anyone. Just keep at it, I guess.

It's partially a function of geography though - not every area is as amenable to this approach as others. And you may need to change approach if this really isn't working. If it's working for others in your area, and not you, it's probably something in what you're doing (or not doing). If no one is having success in your area, it's likely more geographic area.

Happy to take this offline at mgkimsal@gmail.com if you or others want to dig a bit deeper.

I really like the second point, I am going to try it, thank you.

Give me a followup report in a few weeks or month as to how some of this might have worked for you.

Also, on point #2, make a concerted effort to find unrelated people that you can refer work to. When I get .net projects crossing my path, I have 3 people I immediately can hand off to (depending on their schedule). Make part of the networking purpose at those meetings to find people you can refer work to first.

The sibbling's recommendations are obviously good, but sometimes rather impractical. I have an advice that has work out great for me and other people I know and is how most contracting business keep afloat and get early growth.

Specialize and partner up. If we use a webdev for example, he might specialize in marketing. Shopping cart platforms, Survey/Forms software, SEO/PPC agencies, basically everything that tangentially touches web development in that particular field. Instead of marketing, you might try HR and go for Companies that resell Sharepoint, Alfresco, Opentext, recruiting agencies, etc. The possibilities are endless.

Carve out a niche that has well-paying clients. Do some cool stuff on your website to showcase your skills. Start outreaching for companies in that niche. Keep in touch with them and mention from time to time that you're looking to build a clientbase. Referrals and/or subcontracts will fly your way. You will also get visitors on your site from SEO/social. In the meantime, you can straight-out cold email target customers with sales literature. It might sound silly, but it works if you're smart about it.

You will build a large enough network to fill all your hours in no time.

You're not wrong, but I didn't want to write a whole book on the topic (well, I'm in the middle of one actually).

But what you described is another part of networking - finding other people in the field who can get you work, and becoming a partner to them - either for direct referral or subcontract work, or just pre done services.

Niching is certainly my recommendation - one of my points was to find a particular industry you want to serve, then focus on that - f2f meetings in that industry is just one aspect of it (but can also open a lot of doors quickly - one mention from a f2f contact 2 weeks ago turned us on to a whole network of related professionals that need a service we're working on).

Excellent points :)

There are a lot of ways to do it as proved by the comments here. My personal move from freelancer to "company" was a slow transition that involved moving away from clients that nickel-n-dime and moving towards those who do not.

For me, life did not really get easier until I had a roster of clients that wanted repeat work - either as a formal retainer, or just a somewhat regular billing amount each month.

Rate hike was one technique which rid me of a client that was too much hassle, but as you know it takes a lot of guts to let go of a paying customer. You claim that raising your rates led to losing work. You do lose clients when you raise rates, that is the point. You don't want to employ this strategy if you have zero clients who are willing to stick around at the higher rate.

Another is actively seeking out your own clients to cut out the middle-man. I found my sweet spot with small (10-50) companies who did not have full-time programmers on staff and were located in my area. It took me about five years of actively seeking clients and word-of-mouth to get a decent business going.

I would strongly recommend reading the following book: http://www.amazon.com/Go-Alone-Streetwise-Secrets-Employment... It's very clear and accessible, and is aimed at people with domain knowledge but not business knowledge and experience. It's consistent with the excellent advice offered by others in this thread, in book length.

I'm getting my cofounders to read it now, I first read it 12 years ago, and I still think it's the single best introduction to business and sales skills I've seen, despite having read a LOT of such books before, during and since my MBA. Good luck with the business!

I left "freelancing" to do "Contracting" as I was in a similar position.

Alas this also means that I often need to actually turn up to the clients office.

Working though an agency has similar issues, as you describe, but let's face it - no-one likes paying their bills or pay the full whack for stuff.

It's just the cost of doing business.

The only way (that I can see) to totally escape is to actually make something other people will want to buy and sell direct.

> The only way (that I can see) to totally escape is to actually make something other people will want to buy and sell direct.

There are many consultants (myself included) who make a living consulting, have fantastic clients, work remotely, and are able to deliver massive value to those clients without having to work through middle-men.

My comment was rather negative, and I agree it's possible, personally I try to keep to a few small but busy clients and avoid agents when I can.

However when you're having a bad period, or just get tired of it all, the temptation to pack up and do something else can be very tempting :)

It's also worth quoting the famous business aphorism: "Production - Sales = Scrap"

In your case, production is worth 3 times what you quoted the middleman (because the end customer was willing to pay it), what you got was scrap value, and the difference between your price and the end-customer price is the value the middleman created by selling well. TL;DR: Learn to sell!!! :-)

Don't you have a considerable portfolio and work history? Even if you went through an intermediary before, you should be able to prove you did the work, right? Whatever your weaknesses are, play them out as strengths.

If you don't have a huge history as a 'company', that's not a weakness, because you can pay more attention to each new client you get.

My personal trick was to move the hell out of SF and the Bay Area (this could be generalized to out of any large concentrated hub of people who also do the same thing as you). If you're not dealing with tons of other engineers who need odds and ends like dev tools, integration testing, api adapters, and other such things that will never see the light of the outside world, you can get much "better" terms on your projects. For example, if your client is a starving country musician in backwater Louisiana, you can build his entire website for him and charge him a portion of whatever album sales happen through his website. This means a lot less upfront $$, a little more risk, but generally much more stable long term pay-offs because you've aligned your mutual incentives.

1. Meet and befriend more freelancers of similar caliber and complementary skillsets.

2. Help each other find new clients and pool your incoming work.

3. Hire subcontractors for the little stuff that piles up.

4. Slowly back away from the less interesting stuff, and take on the most-interesting/high-paying/high-responsibility jobs.

This post has received several excellent tips and reading suggestions already.

If you're looking to up your game from Freelancer/Contractor, you'll do well to read Alan Weiss, The Guru of building a successful consulting business > http://www.amazon.com/Million-Dollar-Consulting-Alan-Weiss/d...

Maybe in webdev it is different but my story is simple - offer clients something they cannot get anywhere else. I offer rails security audit and charge minimum 375 per hour, but usually around 500.

Bugs I find can save clients millions. Others firms in the industry charge 200-250 but I truly don't care - they don't have what we have. Find your niche.

Oh, and marketing of course. I had plain text website but new version gets better conversion see sakurity.com

Stop working for agencies and work with the end clients. You'll have to work harder to find clients but you will be valued and will make more money.

I'm coming at this question from the other side, as a person who has hired web developers, and orthogonally, as a person who also works in a small consulting business.

1. Word-of-mouth.

2. I do grant writing for nonprofit and public agencies, and we occasionally get pitches for the "true client," and we always tell the would-be middlemen to just send the true client to us. This almost never happens, and in reality there is rarely a true client, and even if there is the middleman won't pay our rate because we're already near the top of the market (see point 4).

3. You might not be able to move beyond "freelancer" without getting a conventional job or starting a startup.

4. If you can't find a way to charge more you may have found the market rate for what you're doing and who you're doing it for. In my consulting firm ~$200/hour is the top market rate. We can't functionally charge more.

5. I don't want to be a jerk, but I wonder how your sales and marketing skills rank. I wrote more about that issue here: http://jakeseliger.com/2014/04/07/how-i-learned-about-assert.... In many small consulting firms, sales and marketing are at least as important as product. Have you thought about hiring a business or voice coach? What's your sales funnel like?

I do know that we're in the process of hiring a firm to re-do our website, and we found a couple through http://wpengine.com/partners/ and one through our ISP. One guy we sent an email to, and he said he didn't talk on the phone. Not surprisingly he's off the list: If he's that uninterested or busy before we send him a lot of money, what's he going to be like after?. We found an outfit named Orange Blossom: http://orangeblossommedia.com/ that has an impressive portfolio, and they seemed to understand the non-standard stuff we needed. CohoWeb: http://cohoweb.com/ is another favorite, and they came through our ISP. In both cases their sales guys were efficient.

Clients often have a hard time evaluating consultants. That's one reason we've been writing a blog for the last seven years: We're professional writers, and the blog does at least show that we can write, and it also attracts a lot of potential clients via search traffic. How are your clients finding you?

If your sales and marketing are not very hot—and I'm not saying that, but I am saying it's possible—you may want to consider trying to work for Orange Blossom or someone else on the WP-Engine list.

Do good work. Over, and over, and over (referrals).

Know your worth. Be increasing your rates ever 6-12 months based on how much learning you've accomplished.

You're a consultant, not a freelancer. You want to be paid for your deep expertise and experience, not just your ability execute code/pixels/words etc.

Care to share your email in your profile? Would love to follow up with you as I am looking into the same problem as well.

It's hard to build a team. We are working on that for 3 years now. Since we are in a developing country clients expect lower rates.

But you have to stick to your rates no matter what. Usually the good clients come once you can provide good quality work. Word of mouth is much powerful that anything.

Freelancing is very competitive with lots of supply. Hence struggles with rates.

Build and sell your own product or service. This also will carry way higher residual value than hit-and-run freelancing gigs.

You've been doing web development for 7 years and you're not familiar with this practice?

Get involved in a business before you try to start a consultancy/agency.

Don't sacrifice quality for nothing!

Check out doubleyourfreelancingrate.com.

Everyone is finding ways to save money!

It sounds like you want to create a company (digital agency) as opposed to a sole proprietorship (freelancer). This doesn't mean that you need to start a huge company, but it does mean that you need more infrastructure. Infrastructure will give you more leverage.

I founded Glass & Marker (www.glassandmarker.com) with 2 creative directors who were tired of being paid low freelance rates, and working at big agencies who stepped on their ideas. Today, we've been in business 4 years, and we have a strong portfolio of tech clients (including over a dozen YC alum companies!), and a much larger team. I helped my partners by building business infrastructure; a strong and profitable vehicle to make content for our clients.

My business partners and I complimented each other because they wanted someone to run the agency who knew how to (1) generate new business (2) negotiate (3) ride the delicate balance of client management and enforcing the rules of the SOW (4) manage employees and (5) identify new areas for growth and scalability (expanding services, hiring, pricing, etc.).

My advice would be to find your business counterpart. Let him or her handle all money, contracts, difficult client scenarios, and all of the other stuff that aren't interested in. You have much better things to do with your time and your talents. In looking for a business partner, I recommend identifying a candidate with these characteristics:

-Transparency/Honesty: Clearly you don't like it when you have a client who is shielding the truth from you. 3x markup on your work is too much, especially if they are getting that while asking you to drive their price down (if you got to name your ideal price, it doesn't matter if they made 10X). Find a partner who speaks truthfully and doesn't mind pulling back the curtain on finances, even in front of client. I do this, and it has always been appreciated.

-Confidence: Your work is valuable. You want someone who understands that, and isn't going to wimp in the negotiation with the client. Sales hungry leaders often short themselves because they can't play chicken with the client. Get someone who will hold their ground in the sale. Ditto on revisions. Not that you want someone who is keen on conflict, but don't get someone who is conflict averse or passive aggressive. When clients get pissed about overages (even though they totally blew past the scope), your partner should be able to resolve conflicts while making the client both feel positive about the work and paying the additional fee.

-Meticulousness: If I let a client get a revision for free, it is definitely not because I'm obligated to. I made sure that my contracts were written simply, and effectively. That gives me confidence that if I had to, I would be entitled to enforce a tough client decision. I have NOT ONCE had to use a contract on a client and my agency has had over 130 engagements to date. I'm also organized with my account management, and I've trained my account managers to be this way. When a client first takes a step outside of bounds, we address it politely, immediately, and clearly. We don't let small grievances build up until the final stages of the project. Organized and meticulous communication is key, and your business partner should be a master of this.

Those are my initial thoughts.

TL;DR: Sounds like you need a business partner. Let him or her handle all money, contracts, difficult client scenarios, and make you more profitable. Find someone who is honest, transparent, confident, and meticulous.

Sounds like the middle man you worked with was an asshole. What's the lesson there? Don't work with that company/person. And think about what signs you can look for in future partners that can tell you they are a similar sort of asshole.

The "true client" proves there's business for you to get which will pay you what you want to be paid. Go out and find the customers. That's really what it comes down to.

there's plenty of other good advice here, but unless you're turning down 3-4 offers for every job you do accept, you're not charging enough money. this is true even when you're not working.

wrapping your head around this and going without a paycheck is tough. most people aren't tough enough to deal with it, including you, until now. this is why agencies can charge 200% markup on your estimate AND screw you for 40% on the backend.

Are they "not tough enough" or not rich enough? If you don't have much saved, are running out of food and have a kid and your rent is due, turning down a job because it doesn't pay well means your kid goes hungry and your wife divorces you.

yeah, sure, that's true. so what?

i mean literally, so what? do you want to make the money, or not? nobody is going to hand it to you. you have to go out and find it. you're competing with people with no kids, no debt, no spouse, and plenty of savings. tough cookies.

if you don't want to risk it, then don't. going on your own is not for people who sit around all day and think of reasons why they can't do something.

I'm looking to get away from contract programming, to being a consultant.

A contract programmer will write a software package, whether for an hourly or a fixed rate.

An example of consulting I've actually done, is that a client flew me from San Jose to Albuquerque to look into why his programmer's application repeatedly crashed. After an hour or so of discussing it with him, I determined that his custom memory allocator was not respecting the alignment restrictions of the CPU.

That second case is what I'd like to do. It's not about the money, it's that I would like more people to benefit from my many years of experience.

The trick is avoiding middlemen and finding rich clients. Its not easy and I haven't figured it out. Maybe try to look more hipster.

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