3 ms·

So You Think You Can Freelance?

54 points by whather 15y ago

thibaut_barrere 15y ago
If I had to give a single tip, it would be "don't do fixed price contracts".
- whather 15y ago
  I agree you shouldn't do fixed priced contracts for larger, long-term projects. But a fixed price for a 1-week long project seems to work out pretty well. That's why we developed the 1 week long sprint payouts.
  - thibaut_barrere 15y ago
    Hehe - I remember my first freelance contract: I quoted 6 hours, and it ended up being 36 hours. But then if the scope and environment and almost everything is crystal clear etc, it's totally doable :)
- tptacek 15y ago
  If I had to give a single tip, it would be "don't bill hourly". The simplest fix for this: give clients proposals that quote an estimated price for the whole project in units of person/weeks, and have your SOW say "time beyond N weeks can be billed at a cost of $X/person/day".
  - thibaut_barrere 15y ago
    For clients expecting estimates, I tend do these in days or weeks; but these are still (best-effort) estimates.
    - tptacek 15y ago
      Here's my thought process on this: Most of our projects run in week increments. We do "a couple day" projects sometimes, and somewhat more commonly do projects that are longer than a week but don't end on a week boundary. If I sell you a day of my time, the remainder of the week is then shot for my more typical N-week projects. That doesn't mean we round 1 day to a week (nothing is more miserable than being stuck on a project that "morally" already ended but demands that you find something to do for the remainder of the time) but does mean we avoid proposing work that is likely to fragment our schedule. Now, take that logic and apply it to hours: none of our projects are for N hours. There's no such thing as a "partial day". Almost uniformly we'll just do something and not charge for it instead of billing for half a day. Furthermore, context switching is brutal to hourly schedules. It can take more than an hour just to mentally switch from one task to another. So it makes absolutely zero sense to bill hourly.
- jontas 15y ago
  If I charge hourly, the better I get the less money I make. I can offset this by raising my rate, but a high rate can be intimidating to clients. They'd rather hear that a project will cost them $1,000 and they can assume that is 20 hours @ $50. In reality, it might take me 5-10 hours. They would've balked at a $200/hr rate, but don't blink at the $1,000 project fee. Working hourly means your own interests are directly aligned against the client's.
ChrisLTD 15y ago
I really like the idea of charging for 1 or 2 weeks at a time. I'll have to try it.
tptacek 15y ago
I'm not in love with any scheme that causes you to resist quoting prices your clients will understand. They want to know how much the project will cost. Tell them how much you think it will cost. There is a huge premium to be captured by consultants simply by eliminating the appearance of uncertainty. Clients pay extra for perceived determinism.
- medinism 15y ago
  I agree giving the project owner the appearance of certainty will make him feel safe and comfortable - however it is not good for them. The longer and more complicated the project the more likely your estimate will be wrong. So giving the customer a sense of overall effort is good - misleading them by telling them you know how much the overall project will cost is bad.
  - tptacek 15y ago
    So provide a conservative estimate billed in week-long increments. You come in way under the wire, they get a week or two deducted from the final cost of the project. Customer dicks around with requirements, you get to say "I am happy to do whatever you'd like and make whatever changes you'd like but I need to remind you that we have a fixed schedule for this project". All this stuff about "what's best for the customer" tends to be an elaborate justification for complicated pricing schemes that alienate customers while ironically undercharging them for the services you provide. Avoid customers for whom a week's worth of your time is a make- or- break- the- business decision.
    - medinism 15y ago
      Good point. the way I was thinking about it was more like this 1- you provide an overall estimate on where you think you could come in at. you do this to give all clarity on how you are thinking about the problem, anchors your estimate and the functionality you are about to build, and allows the owner to get a sense of price 2- only commit to a week or 2 at the time. this allows the client to tweak things, see quick progress, and add or subtract features as you make progress. Or even stop, test features on customers - and pause. thoughts?
Swizec 15y ago
Really good post, I'd just like to add one more piece of advice: Don't over-extend yourself. When your paycheck is directly proportional to the amount of work you put in, it is very easy (and indeed tempting) to take on more work than you can comfortably handle. Avoid the temptation. You are no good to your clients if you're always tired.

54 points by whather 15y ago

thibaut_barrere 15y ago

If I had to give a single tip, it would be "don't do fixed price contracts".

whather 15y ago
I agree you shouldn't do fixed priced contracts for larger, long-term projects. But a fixed price for a 1-week long project seems to work out pretty well. That's why we developed the 1 week long sprint payouts.
- thibaut_barrere 15y ago
  Hehe - I remember my first freelance contract: I quoted 6 hours, and it ended up being 36 hours. But then if the scope and environment and almost everything is crystal clear etc, it's totally doable :)
tptacek 15y ago
If I had to give a single tip, it would be "don't bill hourly". The simplest fix for this: give clients proposals that quote an estimated price for the whole project in units of person/weeks, and have your SOW say "time beyond N weeks can be billed at a cost of $X/person/day".
- thibaut_barrere 15y ago
  For clients expecting estimates, I tend do these in days or weeks; but these are still (best-effort) estimates.
  - tptacek 15y ago
    Here's my thought process on this: Most of our projects run in week increments. We do "a couple day" projects sometimes, and somewhat more commonly do projects that are longer than a week but don't end on a week boundary. If I sell you a day of my time, the remainder of the week is then shot for my more typical N-week projects. That doesn't mean we round 1 day to a week (nothing is more miserable than being stuck on a project that "morally" already ended but demands that you find something to do for the remainder of the time) but does mean we avoid proposing work that is likely to fragment our schedule. Now, take that logic and apply it to hours: none of our projects are for N hours. There's no such thing as a "partial day". Almost uniformly we'll just do something and not charge for it instead of billing for half a day. Furthermore, context switching is brutal to hourly schedules. It can take more than an hour just to mentally switch from one task to another. So it makes absolutely zero sense to bill hourly.
jontas 15y ago
If I charge hourly, the better I get the less money I make. I can offset this by raising my rate, but a high rate can be intimidating to clients. They'd rather hear that a project will cost them $1,000 and they can assume that is 20 hours @ $50. In reality, it might take me 5-10 hours. They would've balked at a $200/hr rate, but don't blink at the $1,000 project fee. Working hourly means your own interests are directly aligned against the client's.

ChrisLTD 15y ago

I really like the idea of charging for 1 or 2 weeks at a time. I'll have to try it.

tptacek 15y ago

I'm not in love with any scheme that causes you to resist quoting prices your clients will understand. They want to know how much the project will cost. Tell them how much you think it will cost. There is a huge premium to be captured by consultants simply by eliminating the appearance of uncertainty. Clients pay extra for perceived determinism.

medinism 15y ago
I agree giving the project owner the appearance of certainty will make him feel safe and comfortable - however it is not good for them. The longer and more complicated the project the more likely your estimate will be wrong. So giving the customer a sense of overall effort is good - misleading them by telling them you know how much the overall project will cost is bad.
- tptacek 15y ago
  So provide a conservative estimate billed in week-long increments. You come in way under the wire, they get a week or two deducted from the final cost of the project. Customer dicks around with requirements, you get to say "I am happy to do whatever you'd like and make whatever changes you'd like but I need to remind you that we have a fixed schedule for this project". All this stuff about "what's best for the customer" tends to be an elaborate justification for complicated pricing schemes that alienate customers while ironically undercharging them for the services you provide. Avoid customers for whom a week's worth of your time is a make- or- break- the- business decision.
  - medinism 15y ago
    Good point. the way I was thinking about it was more like this 1- you provide an overall estimate on where you think you could come in at. you do this to give all clarity on how you are thinking about the problem, anchors your estimate and the functionality you are about to build, and allows the owner to get a sense of price 2- only commit to a week or 2 at the time. this allows the client to tweak things, see quick progress, and add or subtract features as you make progress. Or even stop, test features on customers - and pause. thoughts?

Swizec 15y ago

Really good post, I'd just like to add one more piece of advice: Don't over-extend yourself. When your paycheck is directly proportional to the amount of work you put in, it is very easy (and indeed tempting) to take on more work than you can comfortably handle. Avoid the temptation. You are no good to your clients if you're always tired.