8 ms·

So You Want to be A Freelancer

72 points by samullen 13y ago

CaptainZapp 13y ago
I recall the absolute dread and horror after my contract - at a global logisitcs firm - moved from Basel to Paris and finally Prague. The legal department in Prague sent me a new contract and it wasn't the two page paper that I got accustomed to from the previous contracts. It was 50 pages of undiluted legal gibberish all inconveniently packed into a Word document. After feeling miserable for 3 days I actually went through this thing and while I didn't like it wasn't quite the expected horror. Of essence where 3 pages, really. Setting the terms and the pay. The rest was mostly CYA legalese and copyright questions. But the most interesting thing was that lil' ol' me, a one man show, was actually able to negociate a few points, which where unacceptable to me and actually get them ammended. This episode always comes to mind, when I'm reminded of the less fun freelancing aspects.
- ChristinaM 13y ago
  I've had a lot of luck negotiating freelance contracts. So far having a lawyer review it and explain until I understand it usually costs <$300. That gives me ammunition to negotiate until I get the terms I can't stomach changed (or turn down the contract so I can sleep at night). I once got pretty much free reign to rewrite a section of a contract on IP ownership that needed to be signed ASAP.
Dj_Anthony2013 13y ago
Freelancing is risky. But lucky if you get good clients.
lifeisstillgood 13y ago
oh hell yes! This is the biggest one in my book Oh, there is one more tiny matter: taxes. Make sure to take a 1/3 of each invoice you are paid and put it into savings for taxes. Seriously, you don’t want to make this mistake.
- davedx 13y ago
  I'm in Europe, so I save 50%.
  - Kurtz79 13y ago
    It think there is a lot of variation beetween member states.
    - deleted 13y ago
      [deleted]
michaelochurch 13y ago
Oh, there is one more tiny matter: taxes. Make sure to take a 1/3 of each invoice you are paid and put it into savings for taxes. Seriously, you don’t want to make this mistake. Also, you will have to pay taxes quarterly (well, more specifically, to make estimated payments each quarter). Withholdings at day jobs abstract away the quarterly obligation, allowing you to file once a year (and, usually, get a refund) but freelancers aren't allowed to hold money owed for 9 months and collect interest; they have to pay more quickly. Here's the solution I came up with for the brokenness of the freelance economy (especially the time wasted in marketing). http://michaelochurch.wordpress.com/2013/05/07/fixing-employment-with-consulting-call-options/ http://michaelochurch.wordpress.com/2013/05/07/fixing-employ... It does require you to sell some of your upside, but that's actually a really good thing, because the option holder (who is probably richer and better-connected than you, and therefore requires an order of magnitude less effort to market you) now has an incentive to participate in your marketing process.
- anu_gupta 13y ago
  > Also, you will have to pay taxes quarterly If you're in the US. In other countries, different tax regulations apply.
  - k-mcgrady 13y ago
    Glad this was clarified. I'm in the UK and pay taxes once per year (and National Insurance every few months). Thought I'd been missing something for a moment :)
- jasonkester 13y ago
  you will have to pay taxes quarterly Have you ever tried not paying your taxes quarterly? The penalty is only a few hundred dollars. As in, one or two billable hours. As in, not enough to justify taking time off from paying work to do them those extra three times a year. In years where my memory is especially good and I remember that I'm supposed to do quarterly taxes, I'll send off an enormous check at some point over the summer for about what I paid in taxes the year previous, with my SSN scribbled on it. That's actually surprisingly effective. Most years, I let it slide and simply tack on an extra 0.4% to my total tax bill in April.
loahou04 13y ago
At least for developers freelancing i dont think even marketing is all that hard. With the number of recruiters and such around its actually quite easy to get calls out and start working within a few weeks. I started out with old co-workers and such but found that the easiest way is to post your resume on one of the career sites (monster, indeed, linkedin, etc..) and you will get a flood of calls. 99% of them will be crap...but if your a 1 man show all you need is 1.
swamp40 13y ago
Anyone have advice on how to handle health insurance for a family? I've always been worried that once you stray from the protections offered in a group plan, the insurance will just dump you if you have any major issues. And then once you're dumped it's a "pre-existing condition" and now no one will cover it but a group plan - forcing you to join a company again.
- mcdougle 13y ago
  There are many options for individual (as in non-group, not as in non-family) health insurance, although to avoid the hassles of what you're talking about you might have to think outside the box. A typical major medical policy will increase premiums if you start to have medical problems, and if you try to switch you have to deal with "pre-existing conditions." There are other options, but they work differently and seem scary to most people who are used to letting the company deal with it at a first glance. Source: I was a health insurance salesman for a short period of time, and was licensed to sell for most of the insurance companies out there. It's part of why I'm not scared of going out on my own and freelancing -- I know enough about how insurance works not to worry about it, and can even sell myself a policy and get commission. However, it's been a couple of years, and I probably can't give you accurate, detailed information -- many of the insurance companies are revamping their business models and policies in anticipation of Obamacare.
- bdunn 13y ago
  You mentioned "family", so I'm going to assume you're married. At least here in Virginia (I'm no insurance expert), a group is 2 or more people. My wife is officially a shareholder of my company, and so she and I have a group policy. We pay a little under $1000/mo to insure the two of us and our two girls.
  - swamp40 13y ago
    You don't happen to have two different last names, do you? I guess I could just ask an agent. I'm in IL, and a group minimum is also 2.
    - 13y ago
davedx 13y ago
Taking your annual salary and dividing by 1000 could be a sure fire way to sell yourself short and pick up terrible clients. I would suggest instead to look at what the better freelancers charge (in the US, somewhere in the 50-100 USD range) and figure out where you fit in that based on your skills, experience, portfolio and available work.
- deleted 13y ago
  [deleted]
- Kurtz79 13y ago
  Um, wouldn't 50-100 USD per hour correspond more or less to an average annual salary divided by 1000 ? I assume the annual salary is already a good summary of what an employer is willing to pay you based on your area,skill and experience, and the "divide by 1000" is just a rule of thumb to translate it to your rate.
  - MrFoof 13y ago
    >Um, wouldn't 50-100 USD per hour correspond more or less to an average annual salary divided by 1000 ? Why would I take on all this extra responsibility and risk to make exactly what I did before (or worse, just the median) when I didn't have to? There are two reasons why I went independent: The first is because I would be able to take off huge chunks of time for side projects. The second is I would make at least twice as much as I used to (after taxes, insurance, etc.) despite taking off huge chunks of time for side projects. Also, you cannot expect 50 weeks a year of utilization. If you're smart, you assume 35 weeks a year, and price yourself with that in mind. If you have higher utilization, you have a good year. If you don't, you have no worries. Moreover, I'm at a client now where I gave them a "fill my rolodex rate", which I was very hesitant of doing. We're tying up after the initial term, because the reason why they couldn't afford me is they have mostly systemic organizational and fundamental business issues than they do technology issues.
Nursie 13y ago
I'd love to go freelance. Luckily here in the UK there is a thriving(ish) market in contract work. Short time, usually project-based, better paying than perm work. So far it's been quite fun.
- danso 13y ago
  Related question...all other things considered, do Europeans (well, anywhere with strong universal healthcare) find it easier to do freelance/contract work because of the healthcare guarantees?
  - k-mcgrady 13y ago
    I've been freelancing for 5 years (since I was 18) and I'm positive I couldn't have done it living in the US. I don't have to worry about health care and I know that if I were unable to get work for a while (not happened so far) I could apply to receive housing and job seekers benefits among other things.
  - mmastrac 13y ago
    As a Canuck I can whole-heartedly: yes. I pay for supplemental health care (~300/mth for a family of 3) on top of universal, but we've been considering ditching it.
    - ChristinaM 13y ago
      As another Canuck, same here. I've gone without benefits sometimes (waiting periods for spouse's new jobs) but that means putting off new glasses or dental cleanings for a few months, not skipping dr's appointments or worrying about breaking an arm.
  - sadkingbilly 13y ago
    This is exactly why I had to stop contracting, once children came along. No US health care. Paying out of pocket was $1200+/month for a family plan. It was worth it to take a perm job paying half the rate just to have health insurance.
bpatrianakos 13y ago
I can relate so much. This is so true. Three years ago I was in a position where the only way to get into the business was freelancing. I quit my job at a place that I'm so embarrassed to have worked for I won't mention it (it was fast good) and started freelancing. I did it for two years and still take on side work now after getting a full time position as a developer at a tech company. I was lucky to make that transition and even luckier to have survived as a freelancer. The Internet using public is changing. Websites are commodities to most people. They don't want to pay and its a huge hustle to get a gig that pays what you're worth. People see the free website they get with hosting and assume you should be able to do it as cheaply, quickly, and the only reason they come to you sometimes is because they just don't want to use the free website builder. They think your job is as valuable as the free site builder and often see you as a mechanical Turk that would just do what they'd do with the free tool. I see the future of indie web dev being in services, not website design and development.
- rodly 13y ago
  It doesn't matter what the layman price website building at. If it did, gasoline would be 5 cents and movie tickets would be free with your $10 popcorn.
- alinajaf 13y ago
  I think there's a distinction to be made between a web site and web application developer. One builds posters on the internet and the other builds software that just happens to use HTTP. I've found the latter to be considerably more lucrative and engaging. The work I've done ranges from language teaching software to automated trading bots for second hand books. The market for this sort of work is so screamingly hot right now that if I did all the work that my current clients are asking for in series, I'd be booked into early 2015. And that at a daily rate that the me of three years ago would have trouble even asking for at the negotiation table.
  - bpatrianakos 13y ago
    That could also have to do with location. I'm in Chicago so I have to admit you're right and that market is hot. I think the trouble there is breaking into it. Toward the end of my run as a full time freelancer I tried to get into web applications. The trouble was that I still got a lot of people with an idea for the next Facebook but could barely use MS Word and thought a web developer was the same job as the guy who fixes your PC when it crashes. I was able to build a few web apps but budgets and preparation were so awful that gaining credibility was tough. I could build a great web app but not for $2k and a Month's time. So many people think they can hire you to build an eBay competitor and that the site will magically just create money by simply existing. You're right that there's a huge market now but I would qualify that statement and add that the future is in specialized web applications for people with domain knowledge and an actual business plan. I might have been doing something wrong not to find those people or maybe I was unlucky.
zdw 13y ago
Anyone charging less than $100/hr is probably underselling themselves. The only time you should charge less than that is on very long term contracts with hundreds or thousands of hours, and then, only hesitantly. People make assumptions based on what you charge - frankly, I've found that people tended to blow me off when I charged much less than this, and actually listen when they know they're paying a decent amount for your advice. There's a whole psychology to pricing that needs to be taken into account.
- bdunn 13y ago
  When we link freelancing rates with salaries, we can easily get led astray by: "OMG $200 an hour — that's like $400k a year full-time! That's insane!" If you're looking to augment staff as a contractor, whoever hires you is going to want to compare your hourly rate with what they're paying their team — so it's going to be tricky to break through that ceiling. But if you're working with clients who have problems to solve, and you're hired to solve one or more of their problems, what you charged should be tied to the financial upside that business will experience when all those problems go away. (e.g. pricing for them, not you and your former salary.) I gave a talk last night on value-based pricing for my local Ruby meetup, and covered some of this: https://speakerdeck.com/brennandunn/value-based-pricing-for-freelancers https://speakerdeck.com/brennandunn/value-based-pricing-for-...
  - nhance 13y ago
    When you have a risk, you call an insurance company. When you have an opportunity, you call me. It's only after you stop selling time and start to understand what it is that drive your customers to call you that you'll ever break free from the hourly rate comparisons.
  - danielweber 13y ago
    "OMG $200 an hour — that's like $400k a year full-time! That's insane!" I had a recruiter try this with me. The rates were much lower (I'm not in a top 5 market), but he still tried to convert it into an annual rate. I think I was being negged so I would lower my rates and they could more easily make the sale.
ciclista 13y ago
My main advice: work on your sales skills before you do anything else! I'd like to think I have decent people skills, but when it came to sales, networking, negotiating,... it wa a rough ride to the point that I'm back to look for a day job after 3 years, despite loving the flexibility freelance gave me.
Hawkee 13y ago
I've been an independent business owner and freelancer for the past 8 years. For many of those years I ran my own websites and supported myself from recurring income through affiliate links. That was great, but I didn't like the business of customer sales and felt what I was providing no human value. It was basically SEO and affiliate sales. I got out of that and moved to freelance to provide more of a useful service to humanity. This has been quite a change, but it is much less stressful than keeping up with Google's search engine changes. If you're looking for more free time, expect to earn less. In order to earn full time income you'll need to sacrifice your time. I'm fine with this. I earn enough to support the family, but not enough to buy a fancy new car or even to live in a nice neighborhood. I'm happy living lean and don't want a life of luxury. I find a more humble existence much more fulfilling. It really comes down to what sort of lifestyle you're after.
- medell 13y ago
  I've been down this same path for five years now, leaving five years of corporate behind. It has not been easy, but the flexible I've gained has allowed for travel and piece of mind. I also enjoy talking with business owners and visibly seeing my efforts helping their growth. Smart move with leaving the SEO/affiliate game, as that is racing towards the bottom as more people flock in (you know the type, following the marketing formula to sell an ebook to get that email to eventually close) and search engines tweak their algorithms. I always felt a unease doing that kind of work. Once all the noise dies down, it comes down to doing good work for good companies. Since focusing on being open and transparent and proud of my work, I'm getting close to the point where I am not chasing contracts and can pick and choose clients. And like you, I've been living lean and don't need six figures to live a full life.
yogo 13y ago
There are days when I want to chuck it all and become a greeter at Walmart... You definitely need the right personality (or develop it), and be mentally tough to endure this lifestyle (especially in the beginning) or it will beat you to the ground.
mathattack 13y ago
The dollar conversion is very important. I used to work with some people who made $800/day as independent consultants. Some full time employees making north of $100K were livid, and complained about being exploited. The complexities of, "Withhold taxes, pay both sides of social security, pay your own 401K and health care, pay for your own training, and don't even think of multiplying the daily rate times 260" just didn't sink in.
- flyinRyan 13y ago
  But $800/day is still significantly more than $100k/yr even after taking those things into account. For me both those numbers were higher but it came to a 45% increase if I only took 6 weeks vacation.
  - mathattack 13y ago
    It was a little more than 100K, but I'm being purposefully vague on the exact #s. But let's do some back of the envelope math: $800 day * 250 days (10 holidays) * 75% (3/4 billable) = 150K - 10K ? Social Security - 5K No more 401K match - 10K Health Insurance (Multiply for a family) - 5K Training - 5K Other benefits (leave, sick days, life insurance, etc) ------ 115K Some of these numbers may be off, and I've missed some things, but this is roughly in line with the original post.
    - flyinRyan 13y ago
      Wait a minute. When you said $800/day I assumed you must be talking contracting [1]. Freelancing would be more like $300/HOUR, not $800/day. That would be an utterly insane rate for consulting. [1] Consulting would be more like 9/10 billable or even more. Some contractors take the absolute minimum required time off since they're paid by the day (I've heard of guys who haven't had a consistent week off for years), which would put them at 11+/10 relatively.
tptacek 13y ago
So my freelancing business that I started with 2 friends in 2005 is about to put me and ~20 of my Chicago coworkers onto a chartered bus to Three Floyds Brewery for the day and I'm a little pressed for time, but let me get a few things out really quickly and maybe someone on HN can flesh out my bullets to links to any of the 200 1000-word posts I've written about them: * Your bill rate isn't correlated with your salary * Any bottom-up bill rate you back out of your salary is likely to end up with you undercharging * Bill weekly or daily, but never hourly, never hourly, never hourly; you are not a furniture mover * Don't rely on rules of thumb for accounting; find an accountant (get them referred to you) as soon as you're reliably making money * Part of the point of running a freelancing business is to have your eyes out for opportunities to bring junior people on to your team; read Patrick McKenzie's most recent piece about "productizing" consultancies to see one way to do that. Consulting companies don't scale to VC-palatable multiples, but they do pretty nicely for a couple founders, and they tend to pay their teams well. If you're in a full-time job now and have never tried consulting/freelancing, and you're the kind of person who thinks about one day starting a company, I emphatically urge you to hang up your shingle and start a consulting business. If you're the kind of person who will do well in entrepreneurship, and you can handle 50% more job stress than you have now, you'll make more money consulting and learn an amazing amount about running a business.
- AndrewLuke 13y ago
  May you link to patio11's article on productizing? Can't find it on his blog.
  - bdunn 13y ago
    https://training.kalzumeus.com/newsletters/archive/services_vs_products https://training.kalzumeus.com/newsletters/archive/services_...
Wilya 13y ago
The average yearly rate divided by 1000 doesn't give me a very high number at all. Maybe it's because I'm in Europe, and salaries are much lower here. Diving it by 100 and taking the result as a daily rate seems a bit more reasonable (and billing by the day is a better idea anyway), but is still on the low side. Once you factor in 50% taxes, you have to bill 200 days a year to get the same income as before. On top of that, I plan for 40% of time spent doing billable stuff, and 60% of client search, marketing, networking, and general business handling. Once you take all that into account, freelancing suddenly becomes less attractive.
- jdminhbg 13y ago
  > On top of that, I plan for 40% of time spent doing billable stuff, and 60% of client search, marketing, networking, and general business handling. Prospective freelancers are often warned that they won't be billing 40+ hrs a week because of ancillary non-billable tasks you have to handle, but this is vast overestimate.
- flyinRyan 13y ago
  I would expect consulting rates to be around $300/hr. IBM charges more than that (over $500/hr).
eurydice13 13y ago
Finding the hourly billing strategy strange. My best estimates are in "half days" worth of work. Will try how the equation fits in the UK though. Pleasant read :)

72 points by samullen 13y ago

I recall the absolute dread and horror after my contract - at a global logisitcs firm - moved from Basel to Paris and finally Prague. The legal department in Prague sent me a new contract and it wasn't the two page paper that I got accustomed to from the previous contracts. It was 50 pages of undiluted legal gibberish all inconveniently packed into a Word document. After feeling miserable for 3 days I actually went through this thing and while I didn't like it wasn't quite the expected horror. Of essence where 3 pages, really. Setting the terms and the pay. The rest was mostly CYA legalese and copyright questions. But the most interesting thing was that lil' ol' me, a one man show, was actually able to negociate a few points, which where unacceptable to me and actually get them ammended. This episode always comes to mind, when I'm reminded of the less fun freelancing aspects.

ChristinaM 13y ago
I've had a lot of luck negotiating freelance contracts. So far having a lawyer review it and explain until I understand it usually costs <$300. That gives me ammunition to negotiate until I get the terms I can't stomach changed (or turn down the contract so I can sleep at night). I once got pretty much free reign to rewrite a section of a contract on IP ownership that needed to be signed ASAP.

Dj_Anthony2013 13y ago

Freelancing is risky. But lucky if you get good clients.

lifeisstillgood 13y ago

oh hell yes! This is the biggest one in my book Oh, there is one more tiny matter: taxes. Make sure to take a 1/3 of each invoice you are paid and put it into savings for taxes. Seriously, you don’t want to make this mistake.

davedx 13y ago
I'm in Europe, so I save 50%.
- Kurtz79 13y ago
  It think there is a lot of variation beetween member states.
  - deleted 13y ago
    [deleted]

michaelochurch 13y ago

Oh, there is one more tiny matter: taxes. Make sure to take a 1/3 of each invoice you are paid and put it into savings for taxes. Seriously, you don’t want to make this mistake. Also, you will have to pay taxes quarterly (well, more specifically, to make estimated payments each quarter). Withholdings at day jobs abstract away the quarterly obligation, allowing you to file once a year (and, usually, get a refund) but freelancers aren't allowed to hold money owed for 9 months and collect interest; they have to pay more quickly. Here's the solution I came up with for the brokenness of the freelance economy (especially the time wasted in marketing). http://michaelochurch.wordpress.com/2013/05/07/fixing-employment-with-consulting-call-options/ http://michaelochurch.wordpress.com/2013/05/07/fixing-employ... It does require you to sell some of your upside, but that's actually a really good thing, because the option holder (who is probably richer and better-connected than you, and therefore requires an order of magnitude less effort to market you) now has an incentive to participate in your marketing process.

anu_gupta 13y ago
> Also, you will have to pay taxes quarterly If you're in the US. In other countries, different tax regulations apply.
- k-mcgrady 13y ago
  Glad this was clarified. I'm in the UK and pay taxes once per year (and National Insurance every few months). Thought I'd been missing something for a moment :)
jasonkester 13y ago
you will have to pay taxes quarterly Have you ever tried not paying your taxes quarterly? The penalty is only a few hundred dollars. As in, one or two billable hours. As in, not enough to justify taking time off from paying work to do them those extra three times a year. In years where my memory is especially good and I remember that I'm supposed to do quarterly taxes, I'll send off an enormous check at some point over the summer for about what I paid in taxes the year previous, with my SSN scribbled on it. That's actually surprisingly effective. Most years, I let it slide and simply tack on an extra 0.4% to my total tax bill in April.

loahou04 13y ago

At least for developers freelancing i dont think even marketing is all that hard. With the number of recruiters and such around its actually quite easy to get calls out and start working within a few weeks. I started out with old co-workers and such but found that the easiest way is to post your resume on one of the career sites (monster, indeed, linkedin, etc..) and you will get a flood of calls. 99% of them will be crap...but if your a 1 man show all you need is 1.

swamp40 13y ago

Anyone have advice on how to handle health insurance for a family? I've always been worried that once you stray from the protections offered in a group plan, the insurance will just dump you if you have any major issues. And then once you're dumped it's a "pre-existing condition" and now no one will cover it but a group plan - forcing you to join a company again.

mcdougle 13y ago
There are many options for individual (as in non-group, not as in non-family) health insurance, although to avoid the hassles of what you're talking about you might have to think outside the box. A typical major medical policy will increase premiums if you start to have medical problems, and if you try to switch you have to deal with "pre-existing conditions." There are other options, but they work differently and seem scary to most people who are used to letting the company deal with it at a first glance. Source: I was a health insurance salesman for a short period of time, and was licensed to sell for most of the insurance companies out there. It's part of why I'm not scared of going out on my own and freelancing -- I know enough about how insurance works not to worry about it, and can even sell myself a policy and get commission. However, it's been a couple of years, and I probably can't give you accurate, detailed information -- many of the insurance companies are revamping their business models and policies in anticipation of Obamacare.
bdunn 13y ago
You mentioned "family", so I'm going to assume you're married. At least here in Virginia (I'm no insurance expert), a group is 2 or more people. My wife is officially a shareholder of my company, and so she and I have a group policy. We pay a little under $1000/mo to insure the two of us and our two girls.
- swamp40 13y ago
  You don't happen to have two different last names, do you? I guess I could just ask an agent. I'm in IL, and a group minimum is also 2.
  - 13y ago

davedx 13y ago

Taking your annual salary and dividing by 1000 could be a sure fire way to sell yourself short and pick up terrible clients. I would suggest instead to look at what the better freelancers charge (in the US, somewhere in the 50-100 USD range) and figure out where you fit in that based on your skills, experience, portfolio and available work.

deleted 13y ago
[deleted]
Kurtz79 13y ago
Um, wouldn't 50-100 USD per hour correspond more or less to an average annual salary divided by 1000 ? I assume the annual salary is already a good summary of what an employer is willing to pay you based on your area,skill and experience, and the "divide by 1000" is just a rule of thumb to translate it to your rate.
- MrFoof 13y ago
  >Um, wouldn't 50-100 USD per hour correspond more or less to an average annual salary divided by 1000 ? Why would I take on all this extra responsibility and risk to make exactly what I did before (or worse, just the median) when I didn't have to? There are two reasons why I went independent: The first is because I would be able to take off huge chunks of time for side projects. The second is I would make at least twice as much as I used to (after taxes, insurance, etc.) despite taking off huge chunks of time for side projects. Also, you cannot expect 50 weeks a year of utilization. If you're smart, you assume 35 weeks a year, and price yourself with that in mind. If you have higher utilization, you have a good year. If you don't, you have no worries. Moreover, I'm at a client now where I gave them a "fill my rolodex rate", which I was very hesitant of doing. We're tying up after the initial term, because the reason why they couldn't afford me is they have mostly systemic organizational and fundamental business issues than they do technology issues.

Nursie 13y ago

I'd love to go freelance. Luckily here in the UK there is a thriving(ish) market in contract work. Short time, usually project-based, better paying than perm work. So far it's been quite fun.

danso 13y ago
Related question...all other things considered, do Europeans (well, anywhere with strong universal healthcare) find it easier to do freelance/contract work because of the healthcare guarantees?
- k-mcgrady 13y ago
  I've been freelancing for 5 years (since I was 18) and I'm positive I couldn't have done it living in the US. I don't have to worry about health care and I know that if I were unable to get work for a while (not happened so far) I could apply to receive housing and job seekers benefits among other things.
- mmastrac 13y ago
  As a Canuck I can whole-heartedly: yes. I pay for supplemental health care (~300/mth for a family of 3) on top of universal, but we've been considering ditching it.
  - ChristinaM 13y ago
    As another Canuck, same here. I've gone without benefits sometimes (waiting periods for spouse's new jobs) but that means putting off new glasses or dental cleanings for a few months, not skipping dr's appointments or worrying about breaking an arm.
- sadkingbilly 13y ago
  This is exactly why I had to stop contracting, once children came along. No US health care. Paying out of pocket was $1200+/month for a family plan. It was worth it to take a perm job paying half the rate just to have health insurance.

bpatrianakos 13y ago

I can relate so much. This is so true. Three years ago I was in a position where the only way to get into the business was freelancing. I quit my job at a place that I'm so embarrassed to have worked for I won't mention it (it was fast good) and started freelancing. I did it for two years and still take on side work now after getting a full time position as a developer at a tech company. I was lucky to make that transition and even luckier to have survived as a freelancer. The Internet using public is changing. Websites are commodities to most people. They don't want to pay and its a huge hustle to get a gig that pays what you're worth. People see the free website they get with hosting and assume you should be able to do it as cheaply, quickly, and the only reason they come to you sometimes is because they just don't want to use the free website builder. They think your job is as valuable as the free site builder and often see you as a mechanical Turk that would just do what they'd do with the free tool. I see the future of indie web dev being in services, not website design and development.

rodly 13y ago
It doesn't matter what the layman price website building at. If it did, gasoline would be 5 cents and movie tickets would be free with your $10 popcorn.
alinajaf 13y ago
I think there's a distinction to be made between a web site and web application developer. One builds posters on the internet and the other builds software that just happens to use HTTP. I've found the latter to be considerably more lucrative and engaging. The work I've done ranges from language teaching software to automated trading bots for second hand books. The market for this sort of work is so screamingly hot right now that if I did all the work that my current clients are asking for in series, I'd be booked into early 2015. And that at a daily rate that the me of three years ago would have trouble even asking for at the negotiation table.
- bpatrianakos 13y ago
  That could also have to do with location. I'm in Chicago so I have to admit you're right and that market is hot. I think the trouble there is breaking into it. Toward the end of my run as a full time freelancer I tried to get into web applications. The trouble was that I still got a lot of people with an idea for the next Facebook but could barely use MS Word and thought a web developer was the same job as the guy who fixes your PC when it crashes. I was able to build a few web apps but budgets and preparation were so awful that gaining credibility was tough. I could build a great web app but not for $2k and a Month's time. So many people think they can hire you to build an eBay competitor and that the site will magically just create money by simply existing. You're right that there's a huge market now but I would qualify that statement and add that the future is in specialized web applications for people with domain knowledge and an actual business plan. I might have been doing something wrong not to find those people or maybe I was unlucky.

zdw 13y ago

Anyone charging less than $100/hr is probably underselling themselves. The only time you should charge less than that is on very long term contracts with hundreds or thousands of hours, and then, only hesitantly. People make assumptions based on what you charge - frankly, I've found that people tended to blow me off when I charged much less than this, and actually listen when they know they're paying a decent amount for your advice. There's a whole psychology to pricing that needs to be taken into account.

bdunn 13y ago
When we link freelancing rates with salaries, we can easily get led astray by: "OMG $200 an hour — that's like $400k a year full-time! That's insane!" If you're looking to augment staff as a contractor, whoever hires you is going to want to compare your hourly rate with what they're paying their team — so it's going to be tricky to break through that ceiling. But if you're working with clients who have problems to solve, and you're hired to solve one or more of their problems, what you charged should be tied to the financial upside that business will experience when all those problems go away. (e.g. pricing for them, not you and your former salary.) I gave a talk last night on value-based pricing for my local Ruby meetup, and covered some of this: https://speakerdeck.com/brennandunn/value-based-pricing-for-freelancers https://speakerdeck.com/brennandunn/value-based-pricing-for-...
- nhance 13y ago
  When you have a risk, you call an insurance company. When you have an opportunity, you call me. It's only after you stop selling time and start to understand what it is that drive your customers to call you that you'll ever break free from the hourly rate comparisons.
- danielweber 13y ago
  "OMG $200 an hour — that's like $400k a year full-time! That's insane!" I had a recruiter try this with me. The rates were much lower (I'm not in a top 5 market), but he still tried to convert it into an annual rate. I think I was being negged so I would lower my rates and they could more easily make the sale.

ciclista 13y ago

My main advice: work on your sales skills before you do anything else! I'd like to think I have decent people skills, but when it came to sales, networking, negotiating,... it wa a rough ride to the point that I'm back to look for a day job after 3 years, despite loving the flexibility freelance gave me.

Hawkee 13y ago

I've been an independent business owner and freelancer for the past 8 years. For many of those years I ran my own websites and supported myself from recurring income through affiliate links. That was great, but I didn't like the business of customer sales and felt what I was providing no human value. It was basically SEO and affiliate sales. I got out of that and moved to freelance to provide more of a useful service to humanity. This has been quite a change, but it is much less stressful than keeping up with Google's search engine changes. If you're looking for more free time, expect to earn less. In order to earn full time income you'll need to sacrifice your time. I'm fine with this. I earn enough to support the family, but not enough to buy a fancy new car or even to live in a nice neighborhood. I'm happy living lean and don't want a life of luxury. I find a more humble existence much more fulfilling. It really comes down to what sort of lifestyle you're after.

medell 13y ago
I've been down this same path for five years now, leaving five years of corporate behind. It has not been easy, but the flexible I've gained has allowed for travel and piece of mind. I also enjoy talking with business owners and visibly seeing my efforts helping their growth. Smart move with leaving the SEO/affiliate game, as that is racing towards the bottom as more people flock in (you know the type, following the marketing formula to sell an ebook to get that email to eventually close) and search engines tweak their algorithms. I always felt a unease doing that kind of work. Once all the noise dies down, it comes down to doing good work for good companies. Since focusing on being open and transparent and proud of my work, I'm getting close to the point where I am not chasing contracts and can pick and choose clients. And like you, I've been living lean and don't need six figures to live a full life.

yogo 13y ago

There are days when I want to chuck it all and become a greeter at Walmart... You definitely need the right personality (or develop it), and be mentally tough to endure this lifestyle (especially in the beginning) or it will beat you to the ground.

mathattack 13y ago

The dollar conversion is very important. I used to work with some people who made $800/day as independent consultants. Some full time employees making north of $100K were livid, and complained about being exploited. The complexities of, "Withhold taxes, pay both sides of social security, pay your own 401K and health care, pay for your own training, and don't even think of multiplying the daily rate times 260" just didn't sink in.

flyinRyan 13y ago
But $800/day is still significantly more than $100k/yr even after taking those things into account. For me both those numbers were higher but it came to a 45% increase if I only took 6 weeks vacation.
- mathattack 13y ago
  It was a little more than 100K, but I'm being purposefully vague on the exact #s. But let's do some back of the envelope math: $800 day * 250 days (10 holidays) * 75% (3/4 billable) = 150K - 10K ? Social Security - 5K No more 401K match - 10K Health Insurance (Multiply for a family) - 5K Training - 5K Other benefits (leave, sick days, life insurance, etc) ------ 115K Some of these numbers may be off, and I've missed some things, but this is roughly in line with the original post.
  - flyinRyan 13y ago
    Wait a minute. When you said $800/day I assumed you must be talking contracting [1]. Freelancing would be more like $300/HOUR, not $800/day. That would be an utterly insane rate for consulting. [1] Consulting would be more like 9/10 billable or even more. Some contractors take the absolute minimum required time off since they're paid by the day (I've heard of guys who haven't had a consistent week off for years), which would put them at 11+/10 relatively.

tptacek 13y ago

So my freelancing business that I started with 2 friends in 2005 is about to put me and ~20 of my Chicago coworkers onto a chartered bus to Three Floyds Brewery for the day and I'm a little pressed for time, but let me get a few things out really quickly and maybe someone on HN can flesh out my bullets to links to any of the 200 1000-word posts I've written about them: * Your bill rate isn't correlated with your salary * Any bottom-up bill rate you back out of your salary is likely to end up with you undercharging * Bill weekly or daily, but never hourly, never hourly, never hourly; you are not a furniture mover * Don't rely on rules of thumb for accounting; find an accountant (get them referred to you) as soon as you're reliably making money * Part of the point of running a freelancing business is to have your eyes out for opportunities to bring junior people on to your team; read Patrick McKenzie's most recent piece about "productizing" consultancies to see one way to do that. Consulting companies don't scale to VC-palatable multiples, but they do pretty nicely for a couple founders, and they tend to pay their teams well. If you're in a full-time job now and have never tried consulting/freelancing, and you're the kind of person who thinks about one day starting a company, I emphatically urge you to hang up your shingle and start a consulting business. If you're the kind of person who will do well in entrepreneurship, and you can handle 50% more job stress than you have now, you'll make more money consulting and learn an amazing amount about running a business.

AndrewLuke 13y ago
May you link to patio11's article on productizing? Can't find it on his blog.
- bdunn 13y ago
  https://training.kalzumeus.com/newsletters/archive/services_vs_products https://training.kalzumeus.com/newsletters/archive/services_...

Wilya 13y ago

The average yearly rate divided by 1000 doesn't give me a very high number at all. Maybe it's because I'm in Europe, and salaries are much lower here. Diving it by 100 and taking the result as a daily rate seems a bit more reasonable (and billing by the day is a better idea anyway), but is still on the low side. Once you factor in 50% taxes, you have to bill 200 days a year to get the same income as before. On top of that, I plan for 40% of time spent doing billable stuff, and 60% of client search, marketing, networking, and general business handling. Once you take all that into account, freelancing suddenly becomes less attractive.

jdminhbg 13y ago
> On top of that, I plan for 40% of time spent doing billable stuff, and 60% of client search, marketing, networking, and general business handling. Prospective freelancers are often warned that they won't be billing 40+ hrs a week because of ancillary non-billable tasks you have to handle, but this is vast overestimate.
flyinRyan 13y ago
I would expect consulting rates to be around $300/hr. IBM charges more than that (over $500/hr).

eurydice13 13y ago

Finding the hourly billing strategy strange. My best estimates are in "half days" worth of work. Will try how the equation fits in the UK though. Pleasant read :)