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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?

#201

Earlier quoted context omitted.

“My ordinary rate is X000 per week, HOWEVER I’d love to work with you/this project/this stack/this industry so how does a 20% discount sound?”

I think I get what he was saying. I would say the discounted number instead of saying anything about percentages. Round up whatever that number is to nearest hundred. Saying $x748.35 is your weekly rate does sound kind of sad versus $x800. As an example. Still sounds professional.

Or $750, for that matter. (Mind you, if they take $800, good for you!)

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

#202
Constantly update expectations based on how the work is actually going and based on evolving requirements. If you are T&M or Fixed Fee, you need to always give people your best expectation of progress and where you think (even with a lot of uncertainty) you'll be when the budget runs out. If you do this constantly and early clients feel empowered to make choices (including adding more budget). If you just work until the money is gone either you eat the overage or the client is blindsided and pissed off.

The short version of this: Never, ever, go over budget - always ask for more money or a cut in scope and always do so as early as humanly possible.

If you and/or the client aren't clear on scope or if the budget is enough, don't sleep at night, confront and squash the uncertainty and resultant misalignments or you will get bitten!

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

#203

Earlier quoted context omitted.

None of those two. Charge by value you deliver. You can build a 100K car in an hour? Excellent. Don't punish yourself by charging only $100 for the hour you worked on it. Know your value - which in capitalism depends on market demand - and charge accordingly. When you are a distinguished expert you can charge more of course as well. Make a name for yourself and ensure that everybody knows upfront that you are not a "…

> You can build a 100K car in an hour? Excellent. Why wouldn't ur hourly rate be 100k then (vs $100) ?

[deleted]

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

#204
post #185

Earlier quoted context omitted.

> You can build a 100K car in an hour? Excellent. Why wouldn't ur hourly rate be 100k then (vs $100) ?

- what if you found an even faster way and did it in 30 minutes, do you charge half that? - what if it takes you a bit longer, 2 hours, is it fair to charge the client 2x? The point is, the client wants a car, not an hour of car-making. Also, the moment you provide an hourly rate you get compared to other hourly workers, whether it’s fair or not. “What?! $100k an hour? Even our lawyers cost less!”

> The point is, the client wants a car

Except most clients don't know what they want in such clearcut way before the project begins.

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

#205
post #70
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…

Yeah, such projects happen and it always surprises me - why can't such shops find in-house devs (with regular salaries) for such projects?

Turf. Big orgs aren’t good at sharing developers or other staff, people “belong” to their feudal lord. I had a friend billing $300 to zone luns on a SAN (ie he had nothing to do and spent his days studying) while the team 50 feet away was working 16 hour days on something he could do.

The difference was that they worked for different big shots.

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

#206
Everyone here covered 99% of the things I would say so I'm going to add a few important ones that people missed.

- Estimation. Devs are notoriously bad at it... so don't think of it as an estimation of the amount of time something will take, think of it as a negotiation with the goal of getting them to agree to the most amount of time something could take. If your estimation doesn't seem ridiculous to you then you did a bad job of negotiating.

- Asshole tax. If you get a client that you think is going to be an asshole tax them for that privilege. +20% at least (make sure you're charging more to begin with as previously mentioned). Now this may seem wrong but if they turn out to be not an asshole (which happens a lot), but to make this right with the universe just do more work and don't bill for it. The idea here is that you still end up being mentally happy to do the work even if working with them is painful.

- Use options to negotiate better. There is a bunch of advice saying "don't charge by project"... hogwash. If you can make more money by leveraging a customer's desire to know ahead of time what something will cost you can make money on that. You can clearly define ahead of time exactly what the project entails, charge a 2X or 3X what it would cost in hourly, and then charge for scope changes (which we all know there will be a ton of). Similarly, when you present a proposal, give at least 3 options: "cheap-ass", "normal", and "deluxe"... you will be surprised how many people will spend extra money because they can (you can do this even if the project is billed hourly). Furthermore... people that head into "cheap-ass" land give you valuable information on how to deal with them - most of the time this means you do the same thing but need to itemize your work more heavily (more on this).

- Itemization. Better Negotiation and billing higher amounts are improved by itemization. they say the person that comes to the negotiation table with the most bullet points to negotiate over will win the negotiation. Billing is just a different negotiation.

- Getting content is a nightmare for web clients. Charge for that... but as mentioned elsewhere make the charge in the form of a discount elsewhere. If the content is delivered by XX-XX-XXXX the project is discounted $XXX. THIS INCLUDES BASE ECOMMERCE PRODUCTS.

- Don't try to hire people to do part of your work until you are REALLY efficient at it.

- Exercising is part of your job if you are 100% on your own. Seriously.

- If a tool will save you time buy it immediately. Avoid free tools - you will pay for them later and it will cost you more.

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

#207
post #70

Earlier quoted context omitted.

Yeah, such projects happen and it always surprises me - why can't such shops find in-house devs (with regular salaries) for such projects?

I've had a couple of those projects come along. I remember one in particular for a UK pharmaceuticals company. I went to see them and the first thing they said was "We are so glad you are here, we have been looking for a solution for months without any success. At the moment it's costing us a million pounds a day." It turned out they couldn't produce their compliance documentation and that was delaying the release of…

> 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.

It wasn't an opportunity for them. The Risk/Reward was probably insanely bad. If they fixed it, they are just "doing their job" and get a pat on the back. If it was that big of a deal though, if they screwed it up its possible they would get fired.

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

#208
Never work for free.

I had a guy contact me and con me into developing a feature for him and then disappear.

The other way to put this is, get paid upfront. Estimate your price, triple it, then demand 1/3 upfront before you start to code. That way if the client flakes out on the rest you're at least covered. (Heh... I wrote this from just the headline, before reading the blurb. Your friend who "refuses to take on a project without at least 30% advance" is spot on.)

Which brings me to the next gem: Charge more. The A-#1 mistake most people in every business make is to charge too little. (Flip it over: don't compete on price. Not as a freelancer/consultant.)

What else? Don't work for liars or incompetents.

Also, just because a client has money and is willing to give it to you doesn't mean that you should take it.

Sometimes the right thing to do is sit Gil down and tell him: your project is the Winchester Mystery House and I have better things to do with my time.

(Ah, Gil... what a client. He would come in to discuss the project, and we'd say, "Well, there's A, B, or C?" and he would say, "What about D? And E? Could it also F and G?" and the PM would smile and say, "Sure Gil! We can do all that!". It was the only project I ever worked on that had 100% code coverage. No, really, 100%. Every line. Every single line. Because Gil wanted it. :-)

So yeah, charge more, and brook no bullshit. It helps if you're good at what you do, or at least dedicated.

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

#209
post #85

Not 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.

It's a great advice. If my job,as a consultant,is to consult them,their job is to make sure payments do happen and they happen on time. In my current job, I do have a decent visibility on when,who and why gets paid. And guess who gets paid first? A massive tech company, that threatens to suspend our system if we don't pay,which would mean the company going into ground.

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

#210

Earlier quoted context omitted.

Apologies. I should have clarified. United States of America. I don't believe it's dysfunctional for this particular reason. There are for sure trade-offs between simplification & trying to optimize for the best outcome. A simpler tax code would be nice but then people on all sides of the political aisle would start saying we should really give X a break for Y reasons and that's how it seems to get complicated. There…

It’s not a crime if they don’t catch you. But ensure that your taxation system does not have rules about transfer pricing to expressly prevent tax avoidance. The cheaper (with AI and automation) it gets for IRS to chase for transfer pricing violations, the more likely it is to get a fine.

   It's not a crime if they don't catch you.
With that mentality, you're as good as caught, anywho.
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