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?
Ask HN: What mistakes did you make when starting as a consultant/freelancer?
121–130 of 276 posts
Re: Ask HN: What mistakes did you make when starting as a consultant/freelancer?
#122Not billing often enough. Send a bill every 2 weeks. If they miss one, stop working. No negotiations.
I think this is very bad advice. I had great clients who overlooked a payment. Just let them know and everything was fine. It also depends on what country you live in. Where I live it is 60 days by rule unless it is in a contract signed by both parties.
All this "overlooking" is bullshit anyway. Nobody would "overlook" you not doing any work for a couple of weeks. So why should it be any different when it comes to payment?
Re: Ask HN: What mistakes did you make when starting as a consultant/freelancer?
#123Earlier 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…
Yeah, such projects happen and it always surprises me - why can't such shops find in-house devs (with regular salaries) for such projects?
It turned out they couldn't produce their compliance documentation and that was delaying the release of a new drug.
The solution wasn't that complex but it did involve the intersection of several different skills. They had in-house devs but none of them wanted to touch it, to them it looked like a problem, to me it looked like an opportunity.
Re: Ask HN: What mistakes did you make when starting as a consultant/freelancer?
#124Earlier 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…
Reason I'm asking is because I recently started freelancing in software/web development (about 6 months ago) and I think I'm doing okay. I love to design and think out all of the odd, interesting or difficult back-end problems and so far all of my clients love my work, and with that I'm slowly increasing my rate, started at 50eu/h ($55/hr) and am currently at 75eu/h ($82). This is all in Europe (The Netherlands) However I feel like I'm a bit stuck, the clients I'm able to find don't want to pay more then $80 and with that the work isn't as challenging as I'd like it to be. At the same time it feels like the clients that do want to pay more aren't looking for me.
Re: Ask HN: What mistakes did you make when starting as a consultant/freelancer?
#125Earlier 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…
> Sometimes average corporate developer just does not cut it. The thing is, it's not just some Kentucky Postal Service inc. but it is quite common in such BigCo's as Microsoft, Google, etc...
Re: Ask HN: What mistakes did you make when starting as a consultant/freelancer?
#126Earlier quoted context omitted.
Is it better to charge per project or per hour?
Don't know the ideal scenario in the tech industry but in the advertising/marketing industry, it's useful to charge by a project. One may try to calculate (in their mind) how much time they will take to complete the project and then quote a fixed amount based on the no. of hours that came up.
I'd feel more comfortable presenting a fixed project quote for a creative project than a software project, because in the case of a creative project I can choose to dedicate a fixed amount of time, and have the result - to be judged subjectively - that I was able to produce in that time.
In the case of software, I would need to keep working until it objectively meets requirements. The quality of software I deliver doesn't degrade smoothly under time pressure, it falls off a cliff.
Re: Ask HN: What mistakes did you make when starting as a consultant/freelancer?
#127www.trollandre.com/rent-me/
Re: Ask HN: What mistakes did you make when starting as a consultant/freelancer?
#128Hire 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…
What country are you basing this advice on? I think it’s good advice, but if your income can increase by 20-30% as a result of optimising your business structure for tax purposes, that’s a dysfunctional tax system. I’d like to believe that in some countries this advice is not necessary.
However it is a pretty simple one off step to incorporate, which your accountant should handle easily for you. After that optimise to maximize cashflow, and don't get excited about other tax savings. Some people get bogged down trying to save little pieces of tax by, for instance, buying assets they don't really need. Optimise for best cashflow. Optimise for best cashflow. There I said it three times. I am a finance professional who has held fc roles. I think about tax very rarely. I think about cashflow constantly.
Optimise cashflow for consultants:
Charge more Charge up front If you supply anything make a margin on it, and get paid upfront Bill on time Bill on time. Seriously stop working and write your bill out. A well functioning finance department at the client will pay all authorised invoices around the due date. Authorisation takes time, get in the queue early. Chase your debts immediately, if you have large bills due for payment call your clients accounts payable (know who this is) and ask them if they have the bill and ask them to confirm what date it will be paid on and the amount. Send statements too. I see this every day, where someone is waiting for co to pay them but co has no record of the invoice, it is in spam, in the wrong persons inbox etc. AP departments don't mind being chased, they expect it, it is their job, don't be shy!
Copy your bills directly to accounts payable as well as your direct contact. AP are generally good at chasing internal people for things they know about
Re: Ask HN: What mistakes did you make when starting as a consultant/freelancer?
#129Based upon 20+ years experience.
Be sure to watch the video listed in the doc.
Re: Ask HN: What mistakes did you make when starting as a consultant/freelancer?
#130Not 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?