5 ms·

I used to do a lot of contract work. I can't tell you what you should do - but here is what i did and it worked for me Two approaches: 1) Work for one large c

I used to do a lot of contract work. I can't tell you what you should do - but here is what i did and it worked for me Two approaches: 1) Work for one large client and essentially become an employee (consider this. a lot of startups pay good money for remote employees) 2) Work for multiple clients Focusing on #2 here Core rule: You want to be paid premium for quality and service. Avoid marketplaces - it's very hard to compete on quality here. Niche - the more focused you are on a (profitable) niche the better you can charge premium for domain competence As thibaut_barrere mentioned - Build a brand - i would even go further - create an agency like brand. At the point is stopped saying "I" but said "we" i was able to charge more. Dont charge by the hour but by the value - most developers charge their time - you want to charge the value you provide to the client. Read up on "willingness to pay" Most important: Deliver as promised and always try to over-deliver in service, quality, etc. Eg try to understand why the client asks for features and not only what features she/he asks for - you might be able to come up with better solutions or anticipate future requests. Any successful project should usually lead to improved reputation and more projects and clients. Good luck!

aggieben 11y ago
Don't charge by the hour but by the value This sounds like a recipe for disaster to me without a lot more explanation. Time is the main cost to a provider, so it's very natural that time would also be the driver for billing. "Charging for value" sounds like you're trying to say "fixed price" without actually saying it. I have many, many issues with trying to do fixed price projects of any appreciable size (say, more than 20-40 hours). What do you mean, precisely, by "charge by the value"?
- jeffmould 11y ago
  https://training.kalzumeus.com/newsletters/archive/consulting_1 https://training.kalzumeus.com/newsletters/archive/consultin... http://www.kalzumeus.com/2012/08/13/doubling-saas-revenue/ http://www.kalzumeus.com/2012/08/13/doubling-saas-revenue/
- DrJokepu 11y ago
  Really depends on the client. If your client is able to agree on tight specs and project plans, everyone is better off with fixed project fees. The client can more easily plan financially with a fixed budget. You can charge more, because instead of charging $DAILY_RATE * $DAYS, you can charge $REVENUE_CLIENT_WILL_MAKE_WITH_FEATURE - $THEIR_MARGIN, and the latter figure tends to be significantly higher. You can also deliver the project more quickly because now it's in your interest to do so. Everyone wins. That being said, if the client is unable to commit to tight specs and project plans, you need to revert to invoicing on a time & materials basis. But even if you do that, you should really charge a daily rate, rather than an hourly rate.
  - vitd 11y ago
    >You can charge more, because instead of charging $DAILY_RATE * $DAYS, you can charge $REVENUE_CLIENT_WILL_MAKE_WITH_FEATURE - $THEIR_MARGIN, and the latter figure tends to be significantly higher. That's really going to depend on the type of work you do and the type of clients you can find. In my experience, it's difficult to get contracts with larger businesses unless you know someone already or have some sort of "in" with them. And smaller business tend to be poorly run and are barely making any money on their products and services, so they have very thin margins or are even losing money.
- michaelbuckbee 11y ago
  A good example of "charging by value" is productized consulting - where it's a particular task, etc. that needs done for multiple customers. Say you're really good with Postgres, instead of just hanging out a shingle for "any Postgres stuff?" you offer something like a one time $2500 "Postgres Performance Audit". You get really good at this one thing, have a set bunch of scripts, very deep knowledge, predone report template, etc. and providing a bunch of value. So at the end of the day who cares that it only took you 5 hours (effectively making $500/hr). Bunch of examples: http://www.christophengelhardt.com/ultimate-badass-list-of-productized-consulting-services/ http://www.christophengelhardt.com/ultimate-badass-list-of-p...
  - aggieben 11y ago
    Ah - I didn't think of this angle, but I like it. Thanks.
  - nightski 11y ago
    Except that you are making your services a commodity. A large part of what makes my services valuable is that I can't approach every situation with a pre-fab script and report.
    - genericresponse 11y ago
      No it's a commodity if it's non-differentiated from others. You can still have non-commoditized work that operates at scaled efficiency. You just have to have something that makes you better or different.
  - imtringued 11y ago
    As soon as you have a product it's no longer consulting in my eyes.
- peterbsmith 11y ago
  Some clients are rich. You could charge by what you feel you're worth, say $50/hr. Or you could charge by what they value the work at - at that might be 4x as much. They might be used to paying $200/hr, and are happy to do it. That mentality is similar to charge by value.
  - CodeWriter23 11y ago
    Demanding a higher rate allows clients to select for themselves whether they will be on your client list.
- embwbam 11y ago
  It's vague, because it's a high level idea. I want to earn more than I can by time, therefore I have to get clients to start thinking about how much value they are getting and paying for that. Practically I've had success recently by charging weekly. I keep this rate deliberately lower (about half my old full time consulting rate). Then I send them a weekly report along with the invoice every week. They get to see exactly what they got for the money. It usually takes me 15-20 hours to deliver enough value for the weekly rate. So there are lots of things to try. Small changes in billing can have a large impact on your relationship with your client.
- j45 11y ago
  You can charge by value when you understand the scope of work, have the ability to manage it, and manage risk. The customer gets a fixed price for a fixed scope with a fixed process.
sharemywin 11y ago
The problem with charge for value is now your a product not a service. Not that that's a problem per say but it's a whole different animal than trying to being a contractor.
- aggieben 11y ago
  I'm pretty interested in shifting into a product orientation, so that would be fine by me ;-)
jseliger 11y ago
Avoid marketplaces - it's very hard to compete on quality here. Have an upvote. I don't work in software, but I am a grant writing consultant, and I've never met a successful consultant of any kind who relied on or even used marketplaces. A huge part of many consultants's lives consists of marketing and pitching. I know that we've found email marketing to be our biggest strength in this regard. Consultants who can't get deal flow or close deals won't survive. I also learned a lot about assertiveness and saying no by being a consultant: http://jakeseliger.com/2014/04/07/how-i-learned-about-assertiveness-and-reality-from-being-a-consultant/ http://jakeseliger.com/2014/04/07/how-i-learned-about-assert....
- scrollaway 11y ago
  > I've never met a successful consultant of any kind who relied on or even used marketplaces You have now. I started on PeoplePerHour. Once I had a few good reviews on my profile, I could get jobs more easily; eventually got some big clients off them, which pushed me to PPH's top 5 and I was able to get whichever job I would bid on from then on; I'd always seek the large ones that would last a few months. At the time of course, PPH was a fairly newish marketplace. It's very different now; polluted with low grade jobs and low grade bidders that promise the world for $100. But to me, this tells that the problem isn't "the marketplace" but the target audience. In any case, big +1 to GP post. To reiterate two of their points: 1. Do avoid most marketplaces, unless you can find one where you can easily compete on quality (and if you do find one, tell me about it, heh). 2. Charge fixed price by the value. This means choose your jobs and clients carefully. If you pick a bad client, or a job where you need more time than you anticipated to complete it, you might end up underpaid - Roll with it and learn from it, don't make the same mistake twice.
  - evv 11y ago
    > If you pick a bad client, or a job where you need more time than you anticipated to complete it, you might end up underpaid These things are easier said than done. Could you share a bit about what you've learned in the way of avoiding bad clients and estimating your work?
brudgers 11y ago
Since the work has no value, charging by value rather than time means that the client who doesn't pay because they are not going to use the work is justified in doing so. Which is another way of saying, the general problem isn't a good billing model. It's good clients. Unfortunately, most contractors/freelancers starting out and looking for advice won't have good clients (even when they have clients at all) and will have trouble distinguishing good clients from people who look like good clients until the invoice arrives. YMMV.
- genericresponse 11y ago
  You don't tell them: give me what you value it for. You do your best to estimate what success will be (in value) to them. Then you negotiate from that.
  - brudgers 11y ago
    If your best professional opinion is that the business is going to go under irrespective of your great work, then the ethical choices under the value model are: 1. Don't take the work at any price. 2. Do it for free. Again, if a person has experience and great clients, the choice of pricing model is a problem. If a person lacks experience to judge what the value is in the client's domain and/or the client isn't proven to be good, pricing model doesn't matter as much. The value model price isn't based on what the work is worth, it's based on what the freelancer believes the client believes the work is worth. Under the value based pricing model, if the client is deluded it's reasonable to fleece them...and deluded clients who pay well are good clients.
vitd 11y ago
It's been over 10 years since I had my own business, but when I did, I tried to use "we" instead of "I" and paint the business as a business offering services rather than one person trying to get work. It became very frustrating dealing with recruiters (the people who typically contact you for work). A typical conversation would go something like this: Me: I see you're looking to fill a position involving a lot of graphics work. We could help you out. Them: Please send the resume. Me: I'm not offering the services of just a single developer. We have a variety of services we offer. Please see our web site at <http://www.example.com/> http://www.example.com/>. Them: Please send the resume. Me: I'm unclear what resume you want me to send. I'm not offering you a single person, but a full-service solution. Them: Please send the resume. Me: ...? I'm sure I could have spent time coming up with some response for these people, but it wasn't worth it. I ended up only working with clients I could deal with directly as it was much easier to have a conversation with them. So just be aware that you'll have to deal with this type of nonsense from time-to-time.
- Ma8ee 11y ago
  Recruiters recruit people, so of course they want a resume. If you aren't a person a person that wants to be recruited or wants to recruit someone, a recruiter is the wrong person to talk to.
  - kelvin0 11y ago
    Unfortunately, many times the 'default' gatekeeper to anyone else worth your time in the org IS the recruiter. Using social engineering and/or linkedin you are sometimes able to figure who you need to speak to and access them directly.
    - andkon 11y ago
      Using social engineering and/or linkedin you are sometimes able to figure who you need to speak to and access them directly I think you just described what 'sales' is.
      - 11y ago
godzillabrennus 11y ago
There are a couple of things you didn't mention. Contracts Do this. Get familiar with contract law and make sure your customers execute one that's favorable to you getting paid. Also, ensure you assign at least a license to the client paying you to avoid any problems down the road if you intend to reuse code. Big projects If you intend to tackle big projects you usually need to deal with net terms. Find an invoice factoring company to help you cashflow those deals. They base interest on the loans on your clients.
goodoldboys 11y ago
#1 is where it's at, in my personal experience. I find it hard and less than optimal to work for multiple clients because of the time it takes switching from project to project. Having just one client is inherently riskier from a standpoint of financial stability, but I think the benefits outweigh that risk.
- jeddawson 11y ago
  Came here to agree with and support this method of contract work. I currently have a contract that consumes roughly 50% of my time in a given month and generates 80% of my income. Initially it was for 12 months, but things are going well and it has been extended essentially indefinitely. These type of contracts might be kind of rare (not sure?), but if you can find yourself one, it gives you all kinds of flexibility with figuring out what to spend the rest of your time on. Domain experience and expertise are also key. I have a rare blend of experience and technical capability that align perfectly with my primary contract. This limits some of the risk that is associated with relying so much financially on a single entity since they'd have a really hard time ending things with me and swapping in another programmer. I'll also go above and beyond for this client as it's needed. It's a two way street. Anyways, best wishes on finding a good source of contract work but I'd recommend investigating any major/long term contract. They can simplify your life and be extremely rewarding.
smacking 11y ago
I am 25. Two years and one month ago I created a company called Pixelmatters (http://pixelmatters.com http://pixelmatters.com). I basically did everything more or less the way you described. Which is something absolutely hard to do. As a result, in Aug 2014 we were 2 but today, as I write this, we are 14 and growing. Company is profitable, has no VC money and is fully self-funded (initially, by my computer and...a decent internet connection).
- jxm262 11y ago
  Do you mind if I contact you for a couple quick questions? I'm essentially in the process of trying #2 as OP mentioned and would eventually like to transition into building a team. Would love to ask you a couple things and maybe get some advice. My contact info is in my HN profile if you prefer to reach me instead.
  - smacking 11y ago
    Happy to help you growing your business, mate! Email me to andre at pixelmatters dot com
- elliotec 11y ago
  I'd rather work for you than hire you. But, I'm in a position to be working for you and not hiring you.
- jbhatab 11y ago
  Where did you find the major contracts? Networking? Friends? A website? referrals?
  - smacking 11y ago
    Depends on what "major contracts" are for you. I can tell you that we don't have any "major contract". We to have several "very nice" ones. The main way clients came to us is through our website, Dribbble, Behance but also through referrals - people that worked with us in the past, and that recommend our work to a friend. This latter is the oldest but definitely the best marketing you can get!
jacquesm 11y ago
Re. 1: never ever put all your eggs in a single basket like that, it may work for some but it is a huge risk and there is no real reason to take that risk. Two is a bare minimum, three clients is stability.
payamb 11y ago
Hey, I'm a Web developer living in UK, and English is not my first language, I can speak okay and also i'm studying to speak fluently. Iv'e been working in the industry for past 6 years, Considering i'm not a native speaker, Do you have any suggestion that i can improve my chance of securing contracts ? Is it possible to keep all communication in email ?

aggieben 11y ago

Don't charge by the hour but by the value This sounds like a recipe for disaster to me without a lot more explanation. Time is the main cost to a provider, so it's very natural that time would also be the driver for billing. "Charging for value" sounds like you're trying to say "fixed price" without actually saying it. I have many, many issues with trying to do fixed price projects of any appreciable size (say, more than 20-40 hours). What do you mean, precisely, by "charge by the value"?

jeffmould 11y ago
https://training.kalzumeus.com/newsletters/archive/consulting_1 https://training.kalzumeus.com/newsletters/archive/consultin... http://www.kalzumeus.com/2012/08/13/doubling-saas-revenue/ http://www.kalzumeus.com/2012/08/13/doubling-saas-revenue/
DrJokepu 11y ago
Really depends on the client. If your client is able to agree on tight specs and project plans, everyone is better off with fixed project fees. The client can more easily plan financially with a fixed budget. You can charge more, because instead of charging $DAILY_RATE * $DAYS, you can charge $REVENUE_CLIENT_WILL_MAKE_WITH_FEATURE - $THEIR_MARGIN, and the latter figure tends to be significantly higher. You can also deliver the project more quickly because now it's in your interest to do so. Everyone wins. That being said, if the client is unable to commit to tight specs and project plans, you need to revert to invoicing on a time & materials basis. But even if you do that, you should really charge a daily rate, rather than an hourly rate.
- vitd 11y ago
  >You can charge more, because instead of charging $DAILY_RATE * $DAYS, you can charge $REVENUE_CLIENT_WILL_MAKE_WITH_FEATURE - $THEIR_MARGIN, and the latter figure tends to be significantly higher. That's really going to depend on the type of work you do and the type of clients you can find. In my experience, it's difficult to get contracts with larger businesses unless you know someone already or have some sort of "in" with them. And smaller business tend to be poorly run and are barely making any money on their products and services, so they have very thin margins or are even losing money.
michaelbuckbee 11y ago
A good example of "charging by value" is productized consulting - where it's a particular task, etc. that needs done for multiple customers. Say you're really good with Postgres, instead of just hanging out a shingle for "any Postgres stuff?" you offer something like a one time $2500 "Postgres Performance Audit". You get really good at this one thing, have a set bunch of scripts, very deep knowledge, predone report template, etc. and providing a bunch of value. So at the end of the day who cares that it only took you 5 hours (effectively making $500/hr). Bunch of examples: http://www.christophengelhardt.com/ultimate-badass-list-of-productized-consulting-services/ http://www.christophengelhardt.com/ultimate-badass-list-of-p...
- aggieben 11y ago
  Ah - I didn't think of this angle, but I like it. Thanks.
- nightski 11y ago
  Except that you are making your services a commodity. A large part of what makes my services valuable is that I can't approach every situation with a pre-fab script and report.
  - genericresponse 11y ago
    No it's a commodity if it's non-differentiated from others. You can still have non-commoditized work that operates at scaled efficiency. You just have to have something that makes you better or different.
- imtringued 11y ago
  As soon as you have a product it's no longer consulting in my eyes.
peterbsmith 11y ago
Some clients are rich. You could charge by what you feel you're worth, say $50/hr. Or you could charge by what they value the work at - at that might be 4x as much. They might be used to paying $200/hr, and are happy to do it. That mentality is similar to charge by value.
- CodeWriter23 11y ago
  Demanding a higher rate allows clients to select for themselves whether they will be on your client list.
embwbam 11y ago
It's vague, because it's a high level idea. I want to earn more than I can by time, therefore I have to get clients to start thinking about how much value they are getting and paying for that. Practically I've had success recently by charging weekly. I keep this rate deliberately lower (about half my old full time consulting rate). Then I send them a weekly report along with the invoice every week. They get to see exactly what they got for the money. It usually takes me 15-20 hours to deliver enough value for the weekly rate. So there are lots of things to try. Small changes in billing can have a large impact on your relationship with your client.
j45 11y ago
You can charge by value when you understand the scope of work, have the ability to manage it, and manage risk. The customer gets a fixed price for a fixed scope with a fixed process.

sharemywin 11y ago

The problem with charge for value is now your a product not a service. Not that that's a problem per say but it's a whole different animal than trying to being a contractor.

aggieben 11y ago
I'm pretty interested in shifting into a product orientation, so that would be fine by me ;-)

jseliger 11y ago

Avoid marketplaces - it's very hard to compete on quality here. Have an upvote. I don't work in software, but I am a grant writing consultant, and I've never met a successful consultant of any kind who relied on or even used marketplaces. A huge part of many consultants's lives consists of marketing and pitching. I know that we've found email marketing to be our biggest strength in this regard. Consultants who can't get deal flow or close deals won't survive. I also learned a lot about assertiveness and saying no by being a consultant: http://jakeseliger.com/2014/04/07/how-i-learned-about-assertiveness-and-reality-from-being-a-consultant/ http://jakeseliger.com/2014/04/07/how-i-learned-about-assert....

scrollaway 11y ago
> I've never met a successful consultant of any kind who relied on or even used marketplaces You have now. I started on PeoplePerHour. Once I had a few good reviews on my profile, I could get jobs more easily; eventually got some big clients off them, which pushed me to PPH's top 5 and I was able to get whichever job I would bid on from then on; I'd always seek the large ones that would last a few months. At the time of course, PPH was a fairly newish marketplace. It's very different now; polluted with low grade jobs and low grade bidders that promise the world for $100. But to me, this tells that the problem isn't "the marketplace" but the target audience. In any case, big +1 to GP post. To reiterate two of their points: 1. Do avoid most marketplaces, unless you can find one where you can easily compete on quality (and if you do find one, tell me about it, heh). 2. Charge fixed price by the value. This means choose your jobs and clients carefully. If you pick a bad client, or a job where you need more time than you anticipated to complete it, you might end up underpaid - Roll with it and learn from it, don't make the same mistake twice.
- evv 11y ago
  > If you pick a bad client, or a job where you need more time than you anticipated to complete it, you might end up underpaid These things are easier said than done. Could you share a bit about what you've learned in the way of avoiding bad clients and estimating your work?

brudgers 11y ago

Since the work has no value, charging by value rather than time means that the client who doesn't pay because they are not going to use the work is justified in doing so. Which is another way of saying, the general problem isn't a good billing model. It's good clients. Unfortunately, most contractors/freelancers starting out and looking for advice won't have good clients (even when they have clients at all) and will have trouble distinguishing good clients from people who look like good clients until the invoice arrives. YMMV.

genericresponse 11y ago
You don't tell them: give me what you value it for. You do your best to estimate what success will be (in value) to them. Then you negotiate from that.
- brudgers 11y ago
  If your best professional opinion is that the business is going to go under irrespective of your great work, then the ethical choices under the value model are: 1. Don't take the work at any price. 2. Do it for free. Again, if a person has experience and great clients, the choice of pricing model is a problem. If a person lacks experience to judge what the value is in the client's domain and/or the client isn't proven to be good, pricing model doesn't matter as much. The value model price isn't based on what the work is worth, it's based on what the freelancer believes the client believes the work is worth. Under the value based pricing model, if the client is deluded it's reasonable to fleece them...and deluded clients who pay well are good clients.

vitd 11y ago

It's been over 10 years since I had my own business, but when I did, I tried to use "we" instead of "I" and paint the business as a business offering services rather than one person trying to get work. It became very frustrating dealing with recruiters (the people who typically contact you for work). A typical conversation would go something like this: Me: I see you're looking to fill a position involving a lot of graphics work. We could help you out. Them: Please send the resume. Me: I'm not offering the services of just a single developer. We have a variety of services we offer. Please see our web site at <http://www.example.com/> http://www.example.com/>. Them: Please send the resume. Me: I'm unclear what resume you want me to send. I'm not offering you a single person, but a full-service solution. Them: Please send the resume. Me: ...? I'm sure I could have spent time coming up with some response for these people, but it wasn't worth it. I ended up only working with clients I could deal with directly as it was much easier to have a conversation with them. So just be aware that you'll have to deal with this type of nonsense from time-to-time.

Ma8ee 11y ago
Recruiters recruit people, so of course they want a resume. If you aren't a person a person that wants to be recruited or wants to recruit someone, a recruiter is the wrong person to talk to.
- kelvin0 11y ago
  Unfortunately, many times the 'default' gatekeeper to anyone else worth your time in the org IS the recruiter. Using social engineering and/or linkedin you are sometimes able to figure who you need to speak to and access them directly.
  - andkon 11y ago
    Using social engineering and/or linkedin you are sometimes able to figure who you need to speak to and access them directly I think you just described what 'sales' is.
    - 11y ago

godzillabrennus 11y ago

There are a couple of things you didn't mention. Contracts Do this. Get familiar with contract law and make sure your customers execute one that's favorable to you getting paid. Also, ensure you assign at least a license to the client paying you to avoid any problems down the road if you intend to reuse code. Big projects If you intend to tackle big projects you usually need to deal with net terms. Find an invoice factoring company to help you cashflow those deals. They base interest on the loans on your clients.

goodoldboys 11y ago

#1 is where it's at, in my personal experience. I find it hard and less than optimal to work for multiple clients because of the time it takes switching from project to project. Having just one client is inherently riskier from a standpoint of financial stability, but I think the benefits outweigh that risk.

jeddawson 11y ago
Came here to agree with and support this method of contract work. I currently have a contract that consumes roughly 50% of my time in a given month and generates 80% of my income. Initially it was for 12 months, but things are going well and it has been extended essentially indefinitely. These type of contracts might be kind of rare (not sure?), but if you can find yourself one, it gives you all kinds of flexibility with figuring out what to spend the rest of your time on. Domain experience and expertise are also key. I have a rare blend of experience and technical capability that align perfectly with my primary contract. This limits some of the risk that is associated with relying so much financially on a single entity since they'd have a really hard time ending things with me and swapping in another programmer. I'll also go above and beyond for this client as it's needed. It's a two way street. Anyways, best wishes on finding a good source of contract work but I'd recommend investigating any major/long term contract. They can simplify your life and be extremely rewarding.

smacking 11y ago

I am 25. Two years and one month ago I created a company called Pixelmatters (http://pixelmatters.com http://pixelmatters.com). I basically did everything more or less the way you described. Which is something absolutely hard to do. As a result, in Aug 2014 we were 2 but today, as I write this, we are 14 and growing. Company is profitable, has no VC money and is fully self-funded (initially, by my computer and...a decent internet connection).

jxm262 11y ago
Do you mind if I contact you for a couple quick questions? I'm essentially in the process of trying #2 as OP mentioned and would eventually like to transition into building a team. Would love to ask you a couple things and maybe get some advice. My contact info is in my HN profile if you prefer to reach me instead.
- smacking 11y ago
  Happy to help you growing your business, mate! Email me to andre at pixelmatters dot com
elliotec 11y ago
I'd rather work for you than hire you. But, I'm in a position to be working for you and not hiring you.
jbhatab 11y ago
Where did you find the major contracts? Networking? Friends? A website? referrals?
- smacking 11y ago
  Depends on what "major contracts" are for you. I can tell you that we don't have any "major contract". We to have several "very nice" ones. The main way clients came to us is through our website, Dribbble, Behance but also through referrals - people that worked with us in the past, and that recommend our work to a friend. This latter is the oldest but definitely the best marketing you can get!

jacquesm 11y ago

Re. 1: never ever put all your eggs in a single basket like that, it may work for some but it is a huge risk and there is no real reason to take that risk. Two is a bare minimum, three clients is stability.

payamb 11y ago

Hey, I'm a Web developer living in UK, and English is not my first language, I can speak okay and also i'm studying to speak fluently. Iv'e been working in the industry for past 6 years, Considering i'm not a native speaker, Do you have any suggestion that i can improve my chance of securing contracts ? Is it possible to keep all communication in email ?