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Creative Tim: Growing a side project into a $17k/month business

indiehackers.com

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Re: Creative Tim: Growing a side project into a $17k/month business

#111

Post by zump »

ffumarola wrote: post #55
merpnderp wrote: post #38

Earlier quoted context omitted.

If you can make more than $17k/month from straight consulting, I would like to subscribe to your newsletter please.

At a modest $200/hr, that's 85 hours. It definitely can be hard to line up that much work month after month, but I've had a few months in a row where I achieved that level of consulting revenue. The key is to keep raising your rates.

I'm a new grad, but since when do consultants get to charge > ~double the hourly rate of what wages would be?

Did I miss the memo?

Re: Creative Tim: Growing a side project into a $17k/month business

#112

Post by kleinsch »

merpnderp wrote: post #38
limelight wrote: post #36

I really love these IndieHackers interviews but surprisingly find them somewhat demotivating. Even the more successful interviewees make less revenue per month than I can make through straight consulting. And they're the success stories—most people (including myself) make far less per month from their products. How do people keep motivated to work on side projects when consulting is so much more profitable?

If you can make more than $17k/month from straight consulting, I would like to subscribe to your newsletter please.

Been doing this for 3 years.

There are tons of programming gigs at $100+/hour. $100 * 40 * 4.33 = $17320 per month. It's usually tough to fill 40 hours consistently, but if your rates are higher, you can work less hours.

Re: Creative Tim: Growing a side project into a $17k/month business

#113

Post by kleinsch »

zump wrote: post #111
ffumarola wrote: post #55

Earlier quoted context omitted.

At a modest $200/hr, that's 85 hours. It definitely can be hard to line up that much work month after month, but I've had a few months in a row where I achieved that level of consulting revenue. The key is to keep raising your rates.

I'm a new grad, but since when do consultants get to charge > ~double the hourly rate of what wages would be? Did I miss the memo?

Happens all the time. As a consultant you're responsible for self employment tax (7.5%), benefits, vacation, sick leave, etc. You also have no job security, so you need to make enough that you can cover gaps in between gigs that ended. You price it into your hourly rate accordingly.

So yes, your hourly rate is significantly higher than a comparable salaried employee. No, you're not actually ending up with double the money at the end of the day.

Re: Creative Tim: Growing a side project into a $17k/month business

#114

Post by withdavidli »

Hbthegreat wrote: post #94
csallen wrote: post #90

Earlier quoted context omitted.

In his defense, he's really comparing ~$200k to ~$400k, not poverty to $400k. Beyond a certain point, the more money you have, the less extra money matters.

This mentality is what drives people to mediocrity. Not reaching your full potential just hurts yourself, your family and your community in the long run. If you have the capability to learn more, earn more and create great businesses don't sit on the sidelines the world needs more action takers.

I understand your point. But it doesn't mean we have to live with a hero complex / white man's burden. To consciously step away from earning more, and creating businesses doesn't mean driving oneself to mediocrity if it is to trade off for something they would rather do, appreciate more, and value more. It can be called selfish or hedonistic to do so. We only have one life, I'm not going to live it doing what others want.

Re: Creative Tim: Growing a side project into a $17k/month business

#115

Post by [deleted] »

lemming wrote: post #86
limelight wrote: post #36

I really love these IndieHackers interviews but surprisingly find them somewhat demotivating. Even the more successful interviewees make less revenue per month than I can make through straight consulting. And they're the success stories—most people (including myself) make far less per month from their products. How do people keep motivated to work on side projects when consulting is so much more profitable?

Because money isn't everything. What I'm working on isn't a side project, it's my main gig, but it's paying the bills nicely. But I started this after quitting from a post-acquisition job at Google paying $400k plus 4 years of retention bonus totalling a lot of money. I would absolutely have been financially much, much better off at Google. But I would have had to live in the US which I didn't want to do, and I would…

[deleted]

Re: Creative Tim: Growing a side project into a $17k/month business

#116

Post by malz »

kleinsch wrote: post #113
zump wrote: post #111

Earlier quoted context omitted.

I'm a new grad, but since when do consultants get to charge > ~double the hourly rate of what wages would be? Did I miss the memo?

Happens all the time. As a consultant you're responsible for self employment tax (7.5%), benefits, vacation, sick leave, etc. You also have no job security, so you need to make enough that you can cover gaps in between gigs that ended. You price it into your hourly rate accordingly. So yes, your hourly rate is significantly higher than a comparable salaried employee. No, you're not actually ending up with double the…

Fair, but what's in it for the company? Why pay me a huge hourly rate when they could hire an employee for less? There are various answers to this: specialized knowledge, limited engagement, and so on. But it's important to establish your value as a consultant along these lines.

Re: Creative Tim: Growing a side project into a $17k/month business

#117

Post by MichaelBurge »

malz wrote: post #116
kleinsch wrote: post #113

Earlier quoted context omitted.

Happens all the time. As a consultant you're responsible for self employment tax (7.5%), benefits, vacation, sick leave, etc. You also have no job security, so you need to make enough that you can cover gaps in between gigs that ended. You price it into your hourly rate accordingly. So yes, your hourly rate is significantly higher than a comparable salaried employee. No, you're not actually ending up with double the…

Fair, but what's in it for the company? Why pay me a huge hourly rate when they could hire an employee for less? There are various answers to this: specialized knowledge, limited engagement, and so on. But it's important to establish your value as a consultant along these lines.

Employees are extremely undesirable to have. They're highly regulated, and mean that you have to hire HR departments to mitigate the constant risk of being sued. And there are many many regulations that kick in after you have X number of employees, so many companies stay at X-1 employees until they're ready to make the jump to 2X employees.

With a consultant, you cut them a check, they do the work, and then they go away. No hassle or risk.

It's the difference between logging onto a website like Fiverr and putting in your credit card, and paying a lawyer $500/hour to help you set up an employee health care plan.

Re: Creative Tim: Growing a side project into a $17k/month business

#118

Post by zump »

kleinsch wrote: post #113
zump wrote: post #111

Earlier quoted context omitted.

I'm a new grad, but since when do consultants get to charge > ~double the hourly rate of what wages would be? Did I miss the memo?

Happens all the time. As a consultant you're responsible for self employment tax (7.5%), benefits, vacation, sick leave, etc. You also have no job security, so you need to make enough that you can cover gaps in between gigs that ended. You price it into your hourly rate accordingly. So yes, your hourly rate is significantly higher than a comparable salaried employee. No, you're not actually ending up with double the…

How do I establish a background to be a profitable consultant?

- Work at X company for Y years?

- GitHub?

- Networking?

Re: Creative Tim: Growing a side project into a $17k/month business

#119

Post by morgante »

zump wrote: post #111
ffumarola wrote: post #55

Earlier quoted context omitted.

At a modest $200/hr, that's 85 hours. It definitely can be hard to line up that much work month after month, but I've had a few months in a row where I achieved that level of consulting revenue. The key is to keep raising your rates.

I'm a new grad, but since when do consultants get to charge > ~double the hourly rate of what wages would be? Did I miss the memo?

In addition to the factors kleinsch mentioned, consultants aren't necessarily charging double the hourly rate of employees.

Most of the consultants charging >$150/hr are people who could readily get a job in Big Tech paying >$250k/yr.

Re: Creative Tim: Growing a side project into a $17k/month business

#120

Post by snowwrestler »

zump wrote: post #118
kleinsch wrote: post #113

Earlier quoted context omitted.

Happens all the time. As a consultant you're responsible for self employment tax (7.5%), benefits, vacation, sick leave, etc. You also have no job security, so you need to make enough that you can cover gaps in between gigs that ended. You price it into your hourly rate accordingly. So yes, your hourly rate is significantly higher than a comparable salaried employee. No, you're not actually ending up with double the…

How do I establish a background to be a profitable consultant? - Work at X company for Y years? - GitHub? - Networking?

You need to be able to find clients without spending a fortune on marketing. Networking is good for this; there are a ton of blog posts about how to build up a professional network. Low-cost "thought leader" content marketing might work too, like blogging, an email newsletter, social media presence.

You also need to understand what problems your potential clients are facing. This takes experience, which can come from working as an employee in that industry.

You need to convince your potential clients that you will reliably solve their problem--not only the technical skills, but the ability to apply them on time, on budget, and do what you say you can do. Case studies and client referrals are key here.

Working at X company for Y years is a good way to learn all about the problems that companies like X face, and to develop some stories about how you have solved those problems professionally. It can also be a good way to build a network.

GitHub is useful if it demonstrates skill and perseverance. If it is filled with half-done hobby projects, it will be useless or even a detriment. It is less important than a good track record on actual paying projects.

Finally, to be a profitable consultant, you need to know how to run the business--to estimate your expenses and set rates that are competitive but still make enough money.

EDIT: the blog at http://www.kalzumeus.com is chock full of detailed content on how to start your own software business, including consulting.

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