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Ask HN: What mistakes did you make when starting as a consultant/freelancer?

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Re: Ask HN: What mistakes did you make when starting as a consultant/freelancer?

#191

Post by ghaff »

o-__-o wrote: post #100
londons_explore wrote: post #80

Earlier quoted context omitted.

Do you actually forward receipts to the client and have them pay to the cent? I always find it easier to just have a fixed line item for "travel to client events", and usually I end up coming out ahead by a substantial margin by not booking fancy hotels.

Depends what the contract says. I've had a client tell me to use expensify and call it a day. I've had to manage travel as part of a fixed price bid. I've just had to bill for travel as a line item on a T&M. The bottom line is on your end, you should be capturing receipts, you should be logging costs per project, and you should be providing all this data to an accountant for a nice quarterly rollup.

Yeah, it really depends. I've done it all different ways.

- Bill the client for actual expenses

- Paid out of pocket for travel that was baked into the day rate

- Had major travel (air/hotel) paid for directly by a client's travel agent. (Which I actually preferred to avoid when reasonably possible because now you're dealing with your client's travel policies.)

I'm not an accountant but I tend to agree you shouldn't be billing a broken-out travel line item that's not actual expenses or expenses plus explicit overhead [or a standard per diem].

Re: Ask HN: What mistakes did you make when starting as a consultant/freelancer?

#192

Post by eeZah7Ux »

im_down_w_otp wrote: post #45
bitcoinmoney wrote: post #35

Earlier quoted context omitted.

Just curious what do you consult on for 350/hr? Is this basic CRUD stuff? Wordpress template etc?

$35/hr was writing post-processors for CNC machines. Went up to $75/hr for interactive media work (Flash/Flex). Went up to $150/hr for business systems integration (Netsuite, Salesforce, etc.) Eventually got that up to $300/hr. The astute observer will notice that the rate was inversely proportional to the actual difficulty of the work. This was mostly 10-15 years ago. $350/hr+ was distributed database related consul…

> The astute observer will notice that the rate was inversely proportional to the actual difficulty of the work

This is gold. It happens far too often.

Re: Ask HN: What mistakes did you make when starting as a consultant/freelancer?

#193

Post by pbhjpbhj »

csomar wrote: post #148
londons_explore wrote: post #80

Earlier quoted context omitted.

Do you actually forward receipts to the client and have them pay to the cent? I always find it easier to just have a fixed line item for "travel to client events", and usually I end up coming out ahead by a substantial margin by not booking fancy hotels.

Isn't that fraud? You are supposed to charge exactly how much the travel expenses did cost. If you think you should charge for the travel time proportionally to your work rate, then you should do that but have these separate. It's possible a client will ask you for the travel expenses receipts and it would not be nice to show him that there is difference between what you charged and what it did actually cost.

Could you explain why you think it's fraud (and where you're from might help too).

In the UK there's, for example, a standard "mileage charge" which people tend to claim for driving to a place for work. It's not "the cost of travel" it's an approximate.

When a company charges for sending an operative to a site, they pay the operative £10 ph, and charge the company receiving them £100 -- presumably you think that's fraud too?

How about when Guchi (made up company) charge you $500 for a plain white tshirt made by people who aren't paid a living wage, wouldn't that also be fraud under the same sort of consideration?

Re: Ask HN: What mistakes did you make when starting as a consultant/freelancer?

#194

Post by ghaff »

onreact wrote: post #169
santodante wrote: post #168

Earlier quoted context omitted.

How do I get over the mental barrier of charging more than $100 per hour? - I'm a junior developer and I mostly freelance for larger companies. - I feel like $100/hour is the industry standard and if I charge 150-300 I need to do work that requires managerial work. - 300+ comes from charging a percentage of revenue increase or creating such a narrative, which often requires additional business and strategic consultin…

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

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

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

Re: Ask HN: What mistakes did you make when starting as a consultant/freelancer?

#195

Post by gk1 »

raverbashing wrote: post #82
gk1 wrote: post #41

Earlier quoted context omitted.

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

Interesting How long is your average engagement, if you don't mind asking. Also I suspect this requires a lot of travel (and time away from home), correct?

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

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

Re: Ask HN: What mistakes did you make when starting as a consultant/freelancer?

#196

Post by ghaff »

gk1 wrote: post #32

Longer write-up here: https://www.gkogan.co/blog/how-i-learned-to-get-consulting-l... Some things I learned through mistakes: - Charge more. - Travel like a professional and bill the client. For my first business trip I used airline points, stayed at an Airbnb on my own dime, and even refused the client's offer to reimburse me. Stupid. (Full story here: https://www.gkogan.co/blog/stupid/ ) - If I'm not enjoying the w…

> Travel like a professional and bill the client.

Yep. I don't eat at McDonald's or stay at Motel 6 on my own dime. I'm sure not going to on a company's dime.

Re: Ask HN: What mistakes did you make when starting as a consultant/freelancer?

#197

Post by Spooky23 »

csomar wrote: post #148
londons_explore wrote: post #80

Earlier quoted context omitted.

Do you actually forward receipts to the client and have them pay to the cent? I always find it easier to just have a fixed line item for "travel to client events", and usually I end up coming out ahead by a substantial margin by not booking fancy hotels.

Isn't that fraud? You are supposed to charge exactly how much the travel expenses did cost. If you think you should charge for the travel time proportionally to your work rate, then you should do that but have these separate. It's possible a client will ask you for the travel expenses receipts and it would not be nice to show him that there is difference between what you charged and what it did actually cost.

It depends on the client. With a government client, expenses for lodging and meals are usually capped to the GSA scale. It depends on the contract though.

Re: Ask HN: What mistakes did you make when starting as a consultant/freelancer?

#198

Post by FpUser »

Roark66 wrote: post #111
FpUser wrote: post #58

Earlier quoted context omitted.

I once charged $20,000 for 3 days worth of work. Happened like this: one very huge phone company wanted some very specific self contained component written in Java. They shopped around and did not find anyone willing to do it. My friend was working there and told them that he knows that genius consultant (yours truly). So they called me up and during negotiations I told them that I will do it for $20,000. I was prepa…

It is cool when that happens, but it is extremely important to define the scope of work very well when it does. As if the client had a different expectation for the time frame don't be surprised if they then continue bothering you about details of integration of your feature with the rest of their project for a month.

Nah. Somehow I've always managed to put enough on paper to not get nailed on things like you've just mentioned.

Re: Ask HN: What mistakes did you make when starting as a consultant/freelancer?

#199

Post by ghaff »

pbhjpbhj wrote: post #193
csomar wrote: post #148

Earlier quoted context omitted.

Isn't that fraud? You are supposed to charge exactly how much the travel expenses did cost. If you think you should charge for the travel time proportionally to your work rate, then you should do that but have these separate. It's possible a client will ask you for the travel expenses receipts and it would not be nice to show him that there is difference between what you charged and what it did actually cost.

Could you explain why you think it's fraud (and where you're from might help too). In the UK there's, for example, a standard "mileage charge" which people tend to claim for driving to a place for work. It's not "the cost of travel" it's an approximate. When a company charges for sending an operative to a site, they pay the operative £10 ph, and charge the company receiving them £100 -- presumably you think that's fr…

I'm not sure it's fraud but it's probably not a good practice.

Standard "mileage charges" in the US are actually set by the IRS. I assume it's similar in other places so that's a well-established practice for car-related expenses. I'm not sure how else you would do it as there's no way to directly capture expenses other than fuel.

I assume that in most cases billing some standard travel day rate/per diem (perhaps based on location) would be fine as well with, possibly, air charged separately for the actual amount.

The key is that you're being explicit that you're not charging the actual amount but rather some standard rate that, in principle, approximates average/typical expenses.

Re: Ask HN: What mistakes did you make when starting as a consultant/freelancer?

#200

Post by FpUser »

allenskd wrote: post #105
FpUser wrote: post #81

Earlier quoted context omitted.

Sometimes average corporate developer just does not cut it. Like you've got a bunch who know how to take data from a database and feed it to web form. Ask them to do anything else and they would expect you to send them to a training courses. I've met quite a few shops like that. Meanwhile. This project required some imagination and multi-disciplinary knowledge. Sure the company have some geniuses but the company is h…

I've done freelancing and I'm currently developer on a corporation. I've seen a lot of talent go in and out. Usually it goes out like this: - PM is seeking resources internally, you could be reached out and be told on what they are trying to do. - The project can be complex or easy. Honestly it doesn't matter within the context of working for a company. As far freelancer, you can go on a nitty-gritty with the client…

"I'd say, believe me there are quite a lot of geniuses"

I did not say they were not. Some products said company did develop do require a genius. But from my experience those tend to compartmentalize in appropriate departments and the rest is just average.

Of course there are always exceptions.

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