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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?

#111

Post by Roark66 »

FpUser wrote: post #58
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?

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.

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

#112

Post by imhoguy »

wensley wrote: post #101

Lots of advice to raise your prices, which I agree with, but just be careful if quoting for a dream project or something in an industry you want to move into. I recently quoted for such a project, with a higher price than usual but not unreasonable at all. Heard nothing back from the client for weeks now when discussions were previously going well. I feel like they have taken offence at my quote or something. I am a…

Just ask if they have made a decission already and eventually what is a planed start date. You may politely explain that your availability slots are filling up for upcoming weeks/months.

It is normal for projects to be deprioritized. In that case usually all focus is shifted onto something else - that includes decisions and communication effort too.

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

#113

Post by m0zg »

mattferderer wrote: post #3

Hire a good tax person immediately. Maybe hire 2. A significant amount of your income earned is gained through having someone walk you through handling taxes & health insurance. I'm not suggesting cheating on taxes. There are common practices such as knowing how to best incorporate your business for your situation. How to best pay yourself (dividends vs income) & how to handle your personal & company expenses. This c…

Nah. Just create an LLC and make an S-corp election if flying solo. That way you can pay yourself a salary, and pay the income tax just from the salary as opposed from revenue, which is much larger. There, I just saved you at least a hundred thousand dollars (if you're in the US and charging market rate). You can totally do it yourself - it's not complicated.

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

#114

Post by aliswe »

fyfy18 wrote: post #83

Not when I started, but after I'd been contracting for five years I ended up in a contract where the client ran out of money so couldn't pay me. I figured that because I was hired through a recruitment agency I was safe, but apparently not. For those who aren't aware 'contracting' in Europe refers to what is effectively a short term employee who charges X/day. Clients usually pay net 30 - 60 and often you work throug…

> Clients usually pay net 30 - 60

What do you mean by this?

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

#115

Post by aliswe »

harrisonjackson wrote: post #37

Don't charge per project - charge for your time. The only exception I'd make on this rule is sweat equity and that's because I'm well aware of the gamble I am making with my time. Still charge a token amount of actual $$ for sweat equity unless you are a co-founder. Do not overengineer anything. Charge for your time - 3.6x what you are currently charging ¯\_(ツ)_/¯ no idea what that is. Don't work for clients that bli…

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

Don't you think 3.14 would be more scientific?

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

#116

Post by juanuys »

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…

> fire bad accountants

What is bad? What is good?

I guess I expect my accountant to be a bit of a financial advisor sometimes, which they aren't.

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

#118

Post by aliswe »

o-__-o wrote: post #106

- Not forming an LLC: first gig was done as myself, in hindsight i could have been sued and had a judgement or bankruptcy hang over my personal head for 10 years (no assets back then, but you could lose your home if you own one. don't do it). Get an LLC, get a registered agent, get a PO box, get a bank account and a bank ledger. Money you want to spend from the business goes into the bank account as a deposit and com…

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

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

#119

Post by dfsegoat »

mehrdadn wrote: post #63
dfsegoat wrote: post #4

Embarrassing but honest: Pay your taxes on time (quarterly), assuming you are US based and on a 1099. Put that money away as soon as possible with ea. payment - just like an employer were withholding it. I managed my finances poorly, and it gets increasingly difficult to catch up. All good now but was the most expensive lesson I learned. Edit: seeing other replies here, I would meet with a tax/financial person from t…

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

https://www.irs.gov/publications/p17#d0e106605

But I would also find a good accountant in advance.

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