4 ms·

First year of freelancing, so I can only give a projected income, but it should be accurate as I'm on a long term contract until the end of the year: $80k. It'

by davedx 13y ago

First year of freelancing, so I can only give a projected income, but it should be accurate as I'm on a long term contract until the end of the year: $80k. It's been a very variable year of course. I consider myself as having had a successful year, but I think most people not on long term contracts will have highly variable monthly incomes. My lowest monthly income: EUR 457 (in January too. That month was difficult). My highest monthly income: EUR 9185 (this month). In my experience it's the transition periods where you really have to be careful (unless you have a substantial savings buffer). Switching between contracts with different invoicing cycles; holidays. I'm still enjoying it. Hoping to break EUR 100K next year.

jacquesm 13y ago
Beware of having only a single long term contract, please diversify. If your contract ever falls through you need instant back-up, not after the 3 months or so that it will take to get your order pipeline filled. You need several customers in parallel to be stable as a freelancer, not one big one.
- kevingadd 13y ago
  This 100x. I had four solid long-term contracts lined up as of a few months ago, scheduled so that I could make adequate progress on them without overloading myself, with the overlap set up so that I'd be protected if any one of them fell through. So far, two of them have fallen through (in the non-paying fashion) and one of them is in the process of actively falling apart. I ended up sinking a ton of energy into trying to salvage each one and trying to protect clients from themselves, but ultimately it's not possible. So now I'm potentially left with one paying project... if that one falls through I'm screwed. Maybe in some fields you can be looking for work and have some good contracts in your lap a week later? For me, jacquesm's '3 months or so' is on the money; some of my better-paying contracts take even longer than that to get to the point where I can actually start doing work and billing for it.
  - gotrecruit 13y ago
    have you ever considered the reason your deals/clients fall through because you're not dedicating enough time and energy to each one? i've had significant experience working with freelance developers and it's very obvious which ones are working with multiple clients and which one is working with only 1 or 2.
    - jacquesm 13y ago
      If a freelancer works just with 1 customer they should simply be hired. A good strategy: 1 background job that is long running and has a reasonably low price tag because it can be pre-empted, one high priority, short bursts of work that are paid top rate and maintenance on a number of old clients that still bring in a part of the income. That way everybody gets value for their money and the freelancer gets a good mixture of income. You're mistaken if you think that having a freelancer with only 1 or 2 customers is good for you, in the long term you'll need to rebuild your relationship with new people because your old ones will go out of business when you don't need them for a while.
      - wprl 13y ago
        Not to mention that if you have only one client, you may actually legally be the employee of your client, which is a big liability for your client! I think there are even situations where having a contract explicitly stating you are not an employee may not be legally binding if you have only one client.
    - kevingadd 13y ago
      In none of these cases did the client ask for more time/energy and not get it; I gave more time and energy than would have been necessary with a properly run project. Just bad clients, bad contracts. They happen, and my point is that it would have been hopelessly irresponsible for me to invest all my hopes in just one or two. To give you an idea of what I mean, the one that's in the process of falling apart took over six months of negotiation, periodic prodding, and concessions to get them to actually provide me fully signed documents so I could start work. The whole time they were telling me how excited they were about the project and how important it was to them. Clients like this all seem to exist somewhere on a spectrum, and you have to figure out whether they're just a 'less profitable' client because you'll have to put more work in (and set your hourly rate accordingly), or whether they're a fundamentally problematic client that will just never work out. This client turned out to be the latter, even if I am billing hours now. I suspect once you've been freelancing long enough you can just say no to any client that seems like they could be a problem. For me, it's been a little over two years and the influx of work is not remotely enough to justify that (even if I get way more offers than I used to, and they're better offers)
- kybernetyk 13y ago
  Very important! Though I'm not a freelancer myself I know a guy who was making fairly good money off one client. He knew he should diversify but it was always "I'll look next month for other clients because I'm too busy right now". Some time ago that said client stopped giving work to him. Now he jobs part time at the gas station to make rent and gets only small contracts because he couldn't build a client network while working for his only client.
  - mgkimsal 13y ago
    And seemingly didn't save enough either. "fairly good money" means different things to different people, but keep your living expenses as low as possible. If, for example, your living expenses require a minimum of, say, $8k/month, you probably are going to struggle starting freelancing without $50k in the bank already (and sadly, few people actually have this amount of ready cash available to start make such a move).
- grn 13y ago
  How do you structure your work with several clients? Do you work for a few weeks for one client, then a few more for another, etc?
- moopmoop 13y ago
  The other way around this is to simply not pay yourself everything your company is earning. If you have a long contract you can make up a big enough buffer in your business account so you can go months without any business income and still pay yourself a decent salary. Other bonus is giving yourself a massive dividend now and again :}
- smallegan 13y ago
  It depends on the length of your contract and your confidence in the client. I've had several clients/projects that have lasted longer than a year and since I always bill at least 2-3x what my expected cost of living is I am easily giving enough runway to find my next client. In 2011 for instance I took the year off to focus on personal projects and wait for the right new client to come along. I have now been with that same client for 2 years at 40+/hrs a week.
- gexla 13y ago
  It depends on your market and the depth of your network. Some markets are so hot that you can land one gig after another. Certain types of clients may require a lot of lead time, which lengthens your cash-flow cycles. Sometimes you come across client work where the client can wait for X months. Sometimes the client needs the job done yesterday. Each situation can be beneficial depending on your own situation.
- davedx 13y ago
  > If your contract ever falls through you need instant back-up, not after the 3 months or so that it will take to get your order pipeline filled. Is this not the case with smaller projects too, though? I always tend to look for a new project towards the end of the last one, and that has worked out so far. > You need several customers in parallel to be stable as a freelancer, not one big one. I actually found the opposite: trying to maintain 2 projects at the same time was a nightmare.
k-mcgrady 13y ago
>> My lowest monthly income: EUR 457 (in January too. That month was difficult). I've been freelancing full-time for 5 years and January is always the hardest for me too. Basically the last two weeks of December and first two in January are impossible (people aren't available to speak to you, pay you, or give you new work). I try to get more jobs that I can usually handle at the end of Nov/start of Dec, take my usual 50% up front, but give longer than usual deadlines. That way I can spread the jobs out throughout the dry spell at the end of the year but I'm also financially secure as the extra jobs+50% will cover me. It might not work for everyone but I tend to prefer working on small 1 month projects so it works for me.

by davedx 13y ago

jacquesm 13y ago

Beware of having only a single long term contract, please diversify. If your contract ever falls through you need instant back-up, not after the 3 months or so that it will take to get your order pipeline filled. You need several customers in parallel to be stable as a freelancer, not one big one.

kevingadd 13y ago
This 100x. I had four solid long-term contracts lined up as of a few months ago, scheduled so that I could make adequate progress on them without overloading myself, with the overlap set up so that I'd be protected if any one of them fell through. So far, two of them have fallen through (in the non-paying fashion) and one of them is in the process of actively falling apart. I ended up sinking a ton of energy into trying to salvage each one and trying to protect clients from themselves, but ultimately it's not possible. So now I'm potentially left with one paying project... if that one falls through I'm screwed. Maybe in some fields you can be looking for work and have some good contracts in your lap a week later? For me, jacquesm's '3 months or so' is on the money; some of my better-paying contracts take even longer than that to get to the point where I can actually start doing work and billing for it.
- gotrecruit 13y ago
  have you ever considered the reason your deals/clients fall through because you're not dedicating enough time and energy to each one? i've had significant experience working with freelance developers and it's very obvious which ones are working with multiple clients and which one is working with only 1 or 2.
  - jacquesm 13y ago
    If a freelancer works just with 1 customer they should simply be hired. A good strategy: 1 background job that is long running and has a reasonably low price tag because it can be pre-empted, one high priority, short bursts of work that are paid top rate and maintenance on a number of old clients that still bring in a part of the income. That way everybody gets value for their money and the freelancer gets a good mixture of income. You're mistaken if you think that having a freelancer with only 1 or 2 customers is good for you, in the long term you'll need to rebuild your relationship with new people because your old ones will go out of business when you don't need them for a while.
    - wprl 13y ago
      Not to mention that if you have only one client, you may actually legally be the employee of your client, which is a big liability for your client! I think there are even situations where having a contract explicitly stating you are not an employee may not be legally binding if you have only one client.
  - kevingadd 13y ago
    In none of these cases did the client ask for more time/energy and not get it; I gave more time and energy than would have been necessary with a properly run project. Just bad clients, bad contracts. They happen, and my point is that it would have been hopelessly irresponsible for me to invest all my hopes in just one or two. To give you an idea of what I mean, the one that's in the process of falling apart took over six months of negotiation, periodic prodding, and concessions to get them to actually provide me fully signed documents so I could start work. The whole time they were telling me how excited they were about the project and how important it was to them. Clients like this all seem to exist somewhere on a spectrum, and you have to figure out whether they're just a 'less profitable' client because you'll have to put more work in (and set your hourly rate accordingly), or whether they're a fundamentally problematic client that will just never work out. This client turned out to be the latter, even if I am billing hours now. I suspect once you've been freelancing long enough you can just say no to any client that seems like they could be a problem. For me, it's been a little over two years and the influx of work is not remotely enough to justify that (even if I get way more offers than I used to, and they're better offers)
kybernetyk 13y ago
Very important! Though I'm not a freelancer myself I know a guy who was making fairly good money off one client. He knew he should diversify but it was always "I'll look next month for other clients because I'm too busy right now". Some time ago that said client stopped giving work to him. Now he jobs part time at the gas station to make rent and gets only small contracts because he couldn't build a client network while working for his only client.
- mgkimsal 13y ago
  And seemingly didn't save enough either. "fairly good money" means different things to different people, but keep your living expenses as low as possible. If, for example, your living expenses require a minimum of, say, $8k/month, you probably are going to struggle starting freelancing without $50k in the bank already (and sadly, few people actually have this amount of ready cash available to start make such a move).
grn 13y ago
How do you structure your work with several clients? Do you work for a few weeks for one client, then a few more for another, etc?
moopmoop 13y ago
The other way around this is to simply not pay yourself everything your company is earning. If you have a long contract you can make up a big enough buffer in your business account so you can go months without any business income and still pay yourself a decent salary. Other bonus is giving yourself a massive dividend now and again :}
smallegan 13y ago
It depends on the length of your contract and your confidence in the client. I've had several clients/projects that have lasted longer than a year and since I always bill at least 2-3x what my expected cost of living is I am easily giving enough runway to find my next client. In 2011 for instance I took the year off to focus on personal projects and wait for the right new client to come along. I have now been with that same client for 2 years at 40+/hrs a week.
gexla 13y ago
It depends on your market and the depth of your network. Some markets are so hot that you can land one gig after another. Certain types of clients may require a lot of lead time, which lengthens your cash-flow cycles. Sometimes you come across client work where the client can wait for X months. Sometimes the client needs the job done yesterday. Each situation can be beneficial depending on your own situation.
davedx 13y ago
> If your contract ever falls through you need instant back-up, not after the 3 months or so that it will take to get your order pipeline filled. Is this not the case with smaller projects too, though? I always tend to look for a new project towards the end of the last one, and that has worked out so far. > You need several customers in parallel to be stable as a freelancer, not one big one. I actually found the opposite: trying to maintain 2 projects at the same time was a nightmare.

k-mcgrady 13y ago

>> My lowest monthly income: EUR 457 (in January too. That month was difficult). I've been freelancing full-time for 5 years and January is always the hardest for me too. Basically the last two weeks of December and first two in January are impossible (people aren't available to speak to you, pay you, or give you new work). I try to get more jobs that I can usually handle at the end of Nov/start of Dec, take my usual 50% up front, but give longer than usual deadlines. That way I can spread the jobs out throughout the dry spell at the end of the year but I'm also financially secure as the extra jobs+50% will cover me. It might not work for everyone but I tend to prefer working on small 1 month projects so it works for me.