10 ms·

Stop Freelancing

339 points by robertnealan 13y ago

deleted 13y ago
[deleted]
- MrBuddyCasino 13y ago
  Have you read the article? He is simply suggesting to get a business license and act as a company, instead of calling yourself "freelancer". Its a pure image/marketing thing, and I can see his point.
  - Zoomla 13y ago
    It also protects your personal assets...
    - bdcravens 13y ago
      In most cases, a business license != corporation or other veiled corporate entity. It's merely the first step. It typically is just a piece of paper you get from the municipality.
      - thatthatis 13y ago
        Well if he isn't going further and advocating spending $300 a year to create a delaware LLC that elects to be taxed as a disregarded entity, he should be.
- mathattack 13y ago
  I think you're missing the point. He's still doing freelancing work, it's just packaged as being the owner of a consulting firm. The difference is subtle, but I think you see it in rates.
- mylons 13y ago
  read the article.
StefanPatelski 13y ago
I used to be one of those kid webmasters working from the basement of my parents. Though I did technically have a company. So having a company doesn't really mean anything.
- castis 13y ago
  The base point of the article is that its all in how you market yourself.
christiangenco 13y ago
Interesting. I've been toying around with this idea for a while, but inexperience with starting a company is prohibitive enough to prevent action. How is your current freelance shell company marketed? I'd love to see what that website looks like, and how you advertise it differently.
- mcdougle 13y ago
  I imagine he just set up an LLC or something to that effect, and made his site look more professional, with a logo on it. I can't imagine it's that difficult. People do it all the time for all sorts of personal businesses. I haven't looked into it in-depth as I'm not at that stage yet, but I eventually plan to do the same thing -- although I hope to scale freelancing into a much bigger business if at all possible
  - atwebb 13y ago
    Here you can register/setup an LLC in about 10 minutes online for around $300.
    - hadem 13y ago
      Looks like you forgot your link. Mind updating your comment?
  - benburleson 13y ago
    Yes, there's a lot of information out there regarding this, but it's not too terribly expensive to file for an LLC. When the business is actually just you, it's basically invisible in regards to your tax situation. Just open a separate bank account under the LLC's EIN so you don't have to spend as much time tracking business income and expenses when you want the tax benefit of those business expenses.
    - jtbigwoo 13y ago
      >> When the business is actually just you, it's basically invisible in regards to your tax situation. Not true. In the U.S. if you create an LLC or S-corp you can pay yourself a salary and also pay yourself dividends (sometimes called distributions). Both salary and dividends are subject to regular income taxes, but only the salary is subject to payroll taxes. The justification goes like this: if you were paying an employee, you'd pay them a fair salary and then take some extra for yourself as the owner. The owner's payment isn't technically a salary so you don't need to pay payroll taxes on it. Lots of single-person companies play games with salary and dividends to try to drive their payroll taxes as low as possible. The IRS can crack down on those owners that don't pay themselves a fair salary in an attempt to evade taxes.
karnajani 13y ago
I thought we were calling ourselves consultants now.
mprat 13y ago
I get the marketing / branding aspect. From a contractor's point of view, though, there still isn't any guarantee that the firm that is you that is doing contract work will do quality work - there is no audit system other than referrals anyway. I wonder why people are more inclined to refer companies than individuals. Do companies incur more overhead for the client?
- robertnealan 13y ago
  Agreed that there isn't any guarantee of quality work - largely it comes down to their public portfolio and referrals. At the end of the day there's a big difference between "I know this company that does great work" and "I know this guy that does great work". As far as overhead goes - currently it's mostly the same, but part of my motivation to go the "company" route is the ability to hire someone else in the near future. Once that starts to happen there will be a lot more overhead to consider regarding labor costs, employee income taxes, hardware, etc.
- bdunn 13y ago
  Companies tend to project stability more than individuals. I remember being a hard ass about ensuring that our office was full of life whenever a prospective client came to visit. Even though my employees could just as easily work from the corner coffee shop or home, the idea is: A company with overhead and payroll is obviously doing something right and likely more permanent than this freelancer I met working from his house. Therefore, they're more likely to succeed. The perceived risk of failure is the #1 reason proposals are rejected. You don't need a brick & mortar office or whatever to help mitigate that risk, but it helps.
bdunn 13y ago
It really all boils down to risk management. If you're a self-identified say, "Ruby freelancer", the value proposition is "I am an independent Ruby developer for hire". For staff augmentation gigs or applying for a FT position, this is all well and good, because whoever's hiring is looking for warm bodies with specific technical capabilities. However, many companies are looking to solve specific business problems and might not know how. Simply hiring a developer who happens to know Ruby doesn't guarantee that the problem will be solved — it's a huge risk. It's sort of like saying, "all I need is someone who knows how to swing hammers if I want to build my wife and I's dream home." Mitigating that risk means stepping away from the "<technology> freelancer" title and becoming a business consultant who happens to use e.g. Ruby to solve business problems. On your end, this is going to require less time spent thinking about the technology, and more about the path to solving the underlying problem at hand. From the perspective of a client, this is a much safer bet. And when there's less risk involved, clients are willing to spend more. And treat you more as a consultant. And you'll be happier, your closing rates will go up, etc.
- nork 13y ago
  Yup. The trick is picking your ideal demographic and catering your "brand" to be most attractive to them.
- mjn 13y ago
  This really depends a lot on the business. Even for consultants, many companies prefer to split business and technical consulting, sometimes contracting them out separately, or sometimes just contracting one of them out as needed. In that situation, they typically do not want the technical consultant involving themselves in the business case, because they were hired to solve a technical problem, not to second-guess the role of the technical problem in the hiring company's business. This is particularly common in large companies hiring engineering consultants: a metallurgy consultant hired by Exxon or BP to assist with a design or problem (actual example a friend does regularly) is supposed to provide technical input on metallurgy as required, not try to sell a company on the value proposition of Metallurgical Solutions. Their value proposition is that they are an expert who can provide expert advice and problem-solving in a specific technical domain.
pvnick 13y ago
This seems like a great idea, one that I've been tossing around in my head for a while now. To the skeptics (of which HN has in droves), has anybody ever gone in the reverse direction, ie, from having their own client-funded business to being "freelance"?
- scarecrowbob 13y ago
  I have. I consider it better insofar as it pushes some business development problems off on other folks. I am in demand enough that it's no problem finding remote projects and people who are super happy to find someone who has better than average skills, and to pay accordingly. Not to mention that I live in an inexpensive area of the US close to a tech hub but with flexible employment laws. It's a lot less of a headache as I don't have to sell to folks other than the people who are, in turn, selling my skills. I just do the work. While it cuts my rate by a lot (maybe 50% in most cases), that's a fine tradeoff for picking up a lot of risk and uncertainty. The problem is that, as a business, I had to deal with scaling and bringing in more folks to do work if I wanted to grow or expand and deal with sales and marketing just to stay in business. As a freelancer I make plenty of money at my own schedule, but can't really make the next big income jump. I'm okay with that for the next couple of years (my kids are finishing middle school), though I imagine that at some point I will possibly get bored with the work and, at that point, try and return to being a "business". On a related note, though, I also rent my house for similar reasons.
- dspillett 13y ago
  I've known people do that when their small business was sold to a larger one, and they did not want to stay at the larger company for longer than the hand-over period. Though they have eventually grown back to having a new small business with employees, so haven't stayed as singleton freelancer so they might not count for what you are asking.
- deleted 13y ago
  [deleted]
jsonne 13y ago
I think it's an issue of signalling. In Econ they call it information asymmetry. When one party knows more than the other they try to give us "signals" to show their quality. It seems as though as packaging yourself as a company you've managed to signal that it's a serious endeavor as opposed to a passing freelance gig.
damon_c 13y ago
I don't have time for all that marketing stuff... I'm too busy freelancing!
bluedino 13y ago
From the other side of the table - I might be much more likely to work with "John Smith, Designer", than I would with "John Smith Design Studio". Why's that? When I work with "John Smith, Designer", I'm getting John. When I work with his design studio, he might be billing me for work done by his intern or the guy he hires that isn't as good as John.
- beachstartup 13y ago
  this is not a concern of actual customers who buy actual stuff for actual, significant amounts of money from John Smith Design Studio because John Smith Design Studio has an impressive portfolio and track record and client references. if not, well, you can simply just ask John if he's going to be the guy working on your stuff.
parasitius 13y ago
So ... Question. Can someone please tell me what a business license is? I'm the president of my own corporation, s corp, but have never obtained or heard of the term 'business license' except informally.
parasitius 13y ago
So can someone please tell me what a business license even is? I'm the president of my own corporation, and still don't know, I've never seen it formally just casually mentioned
jakejake 13y ago
I've never really thought that much about having a company just for branding purposes. But, I've run my business as an official corporation for about 10 years now, even though I haven't been 100% freelance for all of that time. There's some running costs for the corporation itself, but but it has a lot of benefits, tax deductions being an obvious one. Also if you don't have a corporate tax ID and bank account, then some clients may insist on withholding taxes and pay you as regular employee, so that they don't look like they're trying to dodge payroll tax. Again this affects your ability to control your own salary and tax filing and you can avoid it by billing them as an officially registered corporation with checks written out to your company, not your personal name. The corporation also helps if you bring on more people to help because you can pay them properly with tax withholding and everything is legit. It's not really that much work using an online Payroll service. I definitely recommend it if you are earning more than a few thousand dollars per year.
ndcrandall 13y ago
The main differences between being an individual vs a company are the intentions for which a client hires you. Being 'Designer John Smith' attracts companies hoping to lure you in as a full time employee eventually. This can be good for finding work when you don't decline the possibility of full time work, but can burn bridges when you decide to leave the client. Being 'John Smith Design Studio' attracts clients looking to offload development to another company in order to meet deadlines and get stuff done.
brennenHN 13y ago
This is the kind of positive practical advice I wish there was more of on Hacker News.
throwmeaway2525 13y ago
Cheating a bit since I didn't read the article, but having been in and out of that world for a number of years, there were always certain types of clients who didn't want to hire a company--they only wanted to deal with individuals, for reasons stated or unstated.
skrebbel 13y ago
This feels very culture-specific. Purely anecdotally, I started freelancing a few months ago, and my experiences are very different. I live in the Netherlands. Here, relatively few programmers decide to freelance, and most who do clearly present themselves as a one-man company, not just as "a guy". It's also impractical to freelance without being registered as a business, so maybe the registration process helps some starting freelancers "flip the switch". Also, I've never experienced anything like pity, as the OP describes. Much rather, people appreciate that I dare taking the comparatively high risk involved (I don't think it's a high risk at all, but many people used to a European-style safe job contract feel differently).
- rodgerd 13y ago
  Definitely culture-specific. Freelancers are common in New Zealand, sometimes as sole traders, sometimes as one-person companies (the difference is pretty marginal, since setting up and maintaining a company in New Zealand is relatively cheap). I did it for a little under a decade before deciding I was a shitty employer for myself.
- roel_v 13y ago
  Well I'm in the Netherlands too (although I consult for international clients mostly), and my experience is opposite from yours and very much in line with the OP's :)
lsc 13y ago
huh. Interesting. The thing is? I have no trouble at all getting freelancing or "contract" work where I'm paid by the hour, and where I'm expected to pretend like I want to be a full time employee. I mean, other than the pretending, I have no objections; usually the work is easy and the pay is good. The thing is, I like mercenary work, and I'm good at it (Most of the gigs I've gotten, well, they seem to be looking for someone who wants full-time work but can't get it without contracting for a while first. Generally speaking? I am better than most people who can't get full-time work, and way better than most people who can't get full-time work, but who can pass the contracting interview process.) I have a business (and a business licence, and a corporation, and employees, and health +workers compensation insurance, and actually rather more revenue from hosting/VPS customers than I could reasonably expect to make from consulting) - but I still don't have whatever it takes to get larger or more monied companies to hire me as a company, rather than as a freelancer. It's... odd, 'cause generally speaking? I don't hire people who aren't better than me. If you can hire my company, rather than me? even if you are paying rather more, you are getting a significantly better product. Now, you could say, the primary difference is that when freelancing, often I use a body shop. Which could be the case; but more than once, I've had a manager call me back after I've left and negotiate a new deal (that he then takes to the body shop) so I guess I'm a little unclear on what value the body shop is bringing the client, so I have no idea how to go about replacing them for my corporation. (the body shop is bringing me value in the form of giving me access to clients who won't do business with my small company.) Edit: note, I /can/ get gigs without a body shop, and flat-rate gigs, too... but... the people I can sell to directly? Generally speaking, they have... much smaller budgets. To the point where I end up making less money. A whole lot less money. So, that's my problem; it seems that the body shops are only set up to deal with hourly work, and it seems that I lack something that companies with money need in order to do business. I have been called unprofessional, and eh, I have a hard time arguing... but like I said, I do just fine; generally far above expectations when going through a body shop, and I /do/ have an infrastructure for outsourcing more of the professional bullshit. To be clear, I'm not saying the body shop isn't bringing value to the customer... just that I don't know what that value is.
- snapoutofit 13y ago
  Have been through more or less the same process as you stated. Its really tough to define what value as you pointed out at the end. Faking the full-time bit is completely true, does not make sense ... but then seems to be a necessity.
krrishd 13y ago
In my case, it really worked the opposite way. When I was an 'agency', I barely had any clients because they didn't feel personal. When I used my name, they were more comfortable and were able to relate more, thus feeling more inclined to hire.
kristofferR 13y ago
I'm struggling with this, since it feels slightly like lying to call just myself "we". What should I answer when the clients ask who "we" are?
- toggle 13y ago
  I can imagine some clients would find it disingenuous to have a company name when it's just you, yeah. This post was interesting because my current boss had the exact opposite experience. He said when he dropped the "company/we" terminology he had been using and was upfront about how it's just him, his relationship with clients improved greatly. It probably all depends on the types of clients you have.
  - bdcravens 13y ago
    I think you can mitigate this by having a company name that doesn't imply size ("Newtech Associates"), avoiding cliche marketing copy and clip art photos (generic hand shake, "We are committed to quality and teamwork"), and putting your photo and info on your "About" page (and don't call it "About Us" of course)
- kintamanimatt 13y ago
  It's called the corporate we and it's fine to use! You might be a one-person company but really there's always at least two people: the natural person (you) and the juridical person (the company), hence "we".[0] [0] http://en.wikipedia.org/wiki/Legal_personality http://en.wikipedia.org/wiki/Legal_personality
- robertnealan 13y ago
  Just be honest. In my case I tell them I'm currently the only full time employee but expect to grow over the next 12 months, but that doesn't have to be the case. I admit I sometimes feel like Smeagol when I use the term "we", but ultimately it helps preserve the delineation between the company entity and myself as its employee.
j45 13y ago
There is a big mindset shift between freelancer, to contractor, to consultant and beyond. All, however, can be relevant and it's important to know which one you can provide and what a customer is looking for. I have a post somewhere here on HN outlining it if I can find it.. :)
jonnathanson 13y ago
It really depends on what types of clients and gigs you want to take on, and what sort of ambitions you have for yourself as a one-man shop. Do you want to remain a one-man shop? If so, biting off more than you chew can be hazardous to your health (literally). You don't want to land the Pepsi account if you're not ready to handle Pepsi volume. By presenting yourself as an agency, you might signal a higher degree of professionalism and (theoretical) resources. You're more likely to get into serious contention for those Pepsi contracts. At the same time, you might be signaling yourself as being too big or too expensive for the thousands of smaller, more easily attainable, ad hoc gigs that really do want an individual freelancer. And BTW - you really don't want large-scale engagements, the kind that routinely go to actual agencies, if you're not running an agency. Those gigs are designed for agencies with staffs and resources to deploy. There will be more volume than you can handle as an individual contributor -- including all the work involved in client management, reporting, schmoozing at the corporate HQ, etc.
- dangero 13y ago
  Good points. I would enjoy reading about companies that went from single contributor to agency smoothly.
  - a-priori 13y ago
    I think partnering with a handful of other ex-freelancers would be a better route to creating an agency than building one single-handed. That's how a consulting firm I used to work for got started, as a partnership of 5 (I think) developers. About 15 years later, they're now ~200 people strong.
- robertnealan 13y ago
  All great points. Personally, I am looking to grow my business to be more than just me and it was one of my main motives to start presenting myself as a business, it just happened to carry with it the beneficial side effect of being seen in a more professional light (most if not all my clients are aware I'm still the only full time employee). Regarding taking on too large of a project should you wish to remain a one-man shop - all I can say is that the projects you turn down are equally as important as those you accept. You have to know both your abilities and the limits of what you can do as one person. Also, I'm more of a Coke person.
etanazir 13y ago
note in related post 'Investors don’t want to meet you. They wanted to be introduced to you (42floors.com)' ...human beings have a default filter on self promotion. If you are promoting a 3rd entity; even the shell 'myCo' you can apparently circumvent the first layer of this defense.
sciguy77 13y ago
That is a fantastic point. Where would IDEO be if David Kelley didn't first make the leap to David Kelley Design?
fencepost 13y ago
I'm hoping to do this by the end of the year or soon thereafter, just so I can start working on being an employee (W-2) of my own company. My motivation was listening to Gina Trapani (of Lifehacker, etc.) talk on the In Beta podcast (http://5by5.tv/inbeta/73 http://5by5.tv/inbeta/73) about how she and her partner in applying for a mortgage basically were having to leave out Gina's income because as a self-employed and 1099 contractor with multiple revenue streams her "career" is too complicated in ways that banks are just going to ignore/reject anyway. I consider myself lucky in that I bought my home (and signed my mortgage) in the waning days of my time at a midsize company, but I don't expect to live here forever and with the way banking changed after 2008 I'm sure I'd have a very hard time getting a mortgage now even if I was putting down 50% of the purchase price up front.
- blisterpeanuts 13y ago
  I went through that same thing -- managed to schlock through a mortgage just as a contract was ending and I was going back to school. I've never missed a payment or given the lender any reason to regret lending me the money - but had I applied a month later, they would have turned me down. I realize now that an elegant way to handle this type of situation is through an LLC where my annual income is a separate fact from the on-and-off-again nature of contract tech work.
martininmelb 13y ago
For what it's worth, if you do decide on a company, call it something modest - and don't try to pretend that you're something that you're not or pretend that you're bigger than you are. Seeing a business card that reads: John Smith CEO and President John Smith Global Design Enterprises just does not cut it.
- greenyoda 13y ago
  Also, "Suite 18A" in your address doesn't really impress people. Anyone can change "Apartment 18A" to "Suite 18A" in their address, and their mail will still be delivered to the same place. And it's pretty obvious to a customer that if the "CEO" answers his own phone and they never meet any of the CEO's employees, they're dealing with a one-man operation that's putting up a fake front.
Nursie 13y ago
Meh. In the UK this line is non-existant. To be a freelancer you set yourself up as a company (it's the most tax efficient way) so exactly whether you position yourself as a body for hire or a solutions company is up to you. If you want to be a solutions company then be prepared to be a salesperson as well as engineer. If you want to be a body for hire then there are hundreds of agencies that will do that part for you. They're all assholes, but that's their job.
PilateDeGuerre 13y ago
Hey Robert, Thanks the article and the debate it inspired. Tell me, was picking a company name that Google attempts to auto-correct a conscious choice? I couldn't get to your website just by searching for your company's name on my first try. Follow up: About how long do you think it will take Google to recognize I am not making a spelling error and I am looking for your services?
josh_rosenblum 13y ago
One of the signaling effects this may have is that your corporate identity has built up re-usable processes, code libraries, infrastructure, and other IP. This itself can be useful both as a signal and practically. If you can talk about the corporate identity having processes in place -- even something as simple as a repeatable process for escrowing code -- this can be something that a potential client can lock onto versus a "freelancer" with no repeatable process. It may be an irrational bias, but I'd be willing to bet that most prospects would be more willing to ascribe repeatability and predictability (a key point in evaluating service providers, no matter the scale of the job) to a corporate identity than to a personal identity.
rbreve 13y ago
My experience us the other way around, I have been working for my web dev company for around 10 years, we had a lot of projects, but we also had a lot of expenses, at the end I was working 12+ hours per day and not making that much money. We had to close the company, now I am a freelancer, working less hours from home and making more per hour. It is less stressful and I get to pick the projects I like more. At the end it all depends, you can't generalize for everyone.
jorisw 13y ago
I freelance by my name and only my name because I think pretending to me more than yourself is selling people BS. The clients who hire me and have hired me are able to make the distinction between a 'cute' freelancer and a professional who will deliver.
dreamdu5t 13y ago
I did the same thing. I freelanced under a company name, with most people not realizing it was just me. There's no reason not you really, the benefits are so numerious in how people perceive you. Honestly, I thought a lot of people did this. I'm shocked that this is a novel idea to many freelancers in the comments. Branding is everything as a freelancer.
leknarf 13y ago
In general, presenting yourself as a professional is essential, but it’d be disadvantageous to act like a dev shop if you’re an individual. In technology, there's a general distrust of "general contractor" style operations. No one wants to hire a developer for $200/hr, only to have him turn around and send the work to an off-shore developer for $20/hr. In fact, most freelance contracts have "no sub-contractor" clauses that explicitly disallow this. Because of this mistrust, some clients don’t even consider working with out-sourcing firms and instead actively seek out individual contractors. They want professional contractors (you should have a LLC, a tax ID number, real legal contracts, etc.), but want that professionalism to come with a human face. Any individuals that are trying to compete with the dev shops are missing out a big market that’s a more natural fit. We’re actually running a startup (http://getlambda.com/ http://getlambda.com/) that represents professional freelance developers and helps them find precisely these sorts of hiring companies. If anyone is looking for help starting or expanding a freelance business, we’d be happy to chat about what we’ve learned.
- robertnealan 13y ago
  I'm not so much suggesting to act like a full dev shop as I openly disclose to my clients that I'm the only current full time employee, but instead to present yourself as a company to whom they can hire and get professional results in return. Unfortunately this does admittedly get abused by people who sub-contract work offshore, but unless your the new guy on the block your portfolio generally starts to speak for itself. Took a look at Lambda (good design work) - how do you differ from a good recruiter connecting freelance contractors with 6-12 month gigs?
  - leknarf 13y ago
    I expect you're striking the right balance, but I've also seen cases where new freelancers get too excited to be a "real company" that they start emulating all the worst parts of large organizations and lose the benefits of individuality. Startups are guilty of this too. There's a reason our website has my email address on the home page instead of just a contact form. Anyone who wants to contact us can reach out to me directly. We won't be able to continue that as we grow, but it's a great advantage right now. Regarding Lambda vs recruiters: we're complementary. A recruiter is usually hired and paid by a company to fill a given role. We're hired and paid by a developer to fill his freelance calendar. We screen clients to ensure they're actually the types you want to work with, we negotiate on your behalf to get you higher rates, and help you brand/position yourself to get you more work in the future.
krmmalik 13y ago
Hmm. I have mixed feelings about this. I do agree with the sentiment but my experience has been different. I think it depends on your target audience. I've found when working with Start-Ups they prefer the personal touch and want to deal with me as an individual. I can email from my gmail account, conduct consultation over skype and even put smileys in my email. I've found it very easy to attract and nurture leads. When dealing with a conventional business however, everything changes. I need a corporate email address, a limited company name, VAT reg and everything has to be done in person. Even just getting a reply to my email is hard work. Not to mention, even if I do get my foot in the door with an initial consultation, convering that into paid work is seriously hard work because i have to deal with things like being on an approved supplier list etc. So yes, if your target audience is B2B (traditional) I'd agree, but if it's consumer or start-up - not so much.
tobinharris 13y ago
Love this story. Robert has just re-marketed himself by simply switching his workspace and by using a legal entity to represent himself. These tweaks have had a positive impact on how he's perceived by clients, and how he perceives himself. And now we can sell more confidently, earn more money and have more fun. Win.
thibaut_barrere 13y ago
Funnily, around me the opposite is true: clients I know are actively avoiding consultancies/companies in favor of freelancers, because some of those consultancies have the bad reputation of selling gradually more low profiles for expensive prices.
mehmehshoe 13y ago
This reminds me of a PandoMonthly talk with Chris Sacca: https://www.youtube.com/watch?v=iqUG2_cmZ6I https://www.youtube.com/watch?v=iqUG2_cmZ6I He talks about his "aha!" moment when he was broke and then realizes the people he meets would rather see him as a part/leader of a team, and not an individual. The moments I refer to are between 32-36 minutes.
johnkpush 13y ago
We prefer hiring consultants who bill us as a business rather than as an individual. It's risky and more costly hiring and paying an individual consultant: * If an individual consultant gets injured, we'd have to pay the individual's worker's comp/unemployment benefits. * When it's B2B, we don't have to worry about 'tax nexus'. If we're based in NY and hire an individual in California, we now have to register and pay some tax in state of California. Hiring a business erases that responsibility. * The consultants who have a business are usually more serious and mature. Invoices are cleaner and the experience is more professional all around. Sounds cliche but it's true. Edit: formatting
- robmcm 13y ago
  I find that a lot in the UK, it's a lot better to get set up as a limited company than a sole trader. Some companies and even industries won't touch you as an individual. I guess it's related to the personal liability etc
manismku 13y ago
That's quite true. During past couple of months I have seen real talent is not sitting in front of your desk and do coding. This way you can walk but can't run. Everything depends how well you sell yourself and make good picture in others mind. Ultimately your goal is presence outside your desk / room. I will say what you have experienced is ground reality about how business works.
ChristopherM 13y ago
Tl;Dr "Perception is 9/10 of reality" This was a good example of how it can yield results when selling your services. It's also very valuable if applied correctly to many areas of life. As an employee, customer, a defendant in a legal case, when you are trying to attract a mate, etc... The important thing to remember is "how do others perceive me?". Based on that "what can I do to change their perception?" Of course you need to figure out what image you want to project; that image is also situation dependent.
mikkom 13y ago
> Behind the scenes barely anything has truly changed This might be is different from country to country but legislation is usually very different when you are freelancing vs contracting as a company. So even if the author doesn't understand it yet, when shit hits the fan he will (and I don't want to sound too harsh but eventually with companies it always will).
yaelwrites 13y ago
I like this. It's all about positioning. I'm technically a freelance writer/editor, but I've found that when I call myself a "content strategist," I can command much higher wages doing the exact same work (since I have to do social, deep analytics, etc. as a writer anyway).
marknadal 13y ago
While I haven't gotten a business license, I have found that regularly increasing my hourly rate for new clients has done wonders, and moving from hourly to then daily to weekly rates. I now position myself as a data and code synchronization specialist, I guarantee my clients a seamless use of their data and code no matter where it is, and this is enough value that people are eagerly willing to pay. Be the specific solution for a company, then you'll be in charge - not the other way around.
mcv 13y ago
I did this right away when I became a freelancer. Registered my own company, which I understood to be necessary to send invoices. Got an office to work from. But I'm still a freelancer. Or an independent contractor, but what's the difference?
wojt_eu 13y ago
Disclaimer: below opinions based solely on personal experience As a "freelancer who knows how to deliver and maintain software" I easily find clients who understand prototyping, prioritization, shipping features incrementally. As soon as I try to market myself as "software company", every conversation seems to start with – excuse my language – estimating and budgets. What's more, they ask to estimate something vague, "oh and here we do some reports, maybe with charts". I prefer estimating only small bits to inform decision at hand: do we refine the design so that it looks less "Bootstrapy" (2 days) or add referrals feature (3 days). And in my experience clients who embrace this style of work seek "freelancers".
anovikov 13y ago
I had a completely opposite experience. Nobody wants a company because everyone thinks a company with simply hire a few Indians, make a 3x profit, and add no value. Freelancer gets way better reception. I even know a lot of consulting companies who pretend to be a bunch of individual people, hiding the fact they are linked, and don't know any examples of the ooposite - an individual pretending to be a company - and i see no reason from a customer's perspective to prefer a company to an individual unless they have a job so big/diverse that an individual can't do it.

Stop Freelancing

339 points by robertnealan 13y ago

deleted 13y ago

[deleted]

MrBuddyCasino 13y ago
Have you read the article? He is simply suggesting to get a business license and act as a company, instead of calling yourself "freelancer". Its a pure image/marketing thing, and I can see his point.
- Zoomla 13y ago
  It also protects your personal assets...
  - bdcravens 13y ago
    In most cases, a business license != corporation or other veiled corporate entity. It's merely the first step. It typically is just a piece of paper you get from the municipality.
    - thatthatis 13y ago
      Well if he isn't going further and advocating spending $300 a year to create a delaware LLC that elects to be taxed as a disregarded entity, he should be.
mathattack 13y ago
I think you're missing the point. He's still doing freelancing work, it's just packaged as being the owner of a consulting firm. The difference is subtle, but I think you see it in rates.
mylons 13y ago
read the article.

StefanPatelski 13y ago

I used to be one of those kid webmasters working from the basement of my parents. Though I did technically have a company. So having a company doesn't really mean anything.

castis 13y ago
The base point of the article is that its all in how you market yourself.

christiangenco 13y ago

Interesting. I've been toying around with this idea for a while, but inexperience with starting a company is prohibitive enough to prevent action. How is your current freelance shell company marketed? I'd love to see what that website looks like, and how you advertise it differently.

mcdougle 13y ago
I imagine he just set up an LLC or something to that effect, and made his site look more professional, with a logo on it. I can't imagine it's that difficult. People do it all the time for all sorts of personal businesses. I haven't looked into it in-depth as I'm not at that stage yet, but I eventually plan to do the same thing -- although I hope to scale freelancing into a much bigger business if at all possible
- atwebb 13y ago
  Here you can register/setup an LLC in about 10 minutes online for around $300.
  - hadem 13y ago
    Looks like you forgot your link. Mind updating your comment?
- benburleson 13y ago
  Yes, there's a lot of information out there regarding this, but it's not too terribly expensive to file for an LLC. When the business is actually just you, it's basically invisible in regards to your tax situation. Just open a separate bank account under the LLC's EIN so you don't have to spend as much time tracking business income and expenses when you want the tax benefit of those business expenses.
  - jtbigwoo 13y ago
    >> When the business is actually just you, it's basically invisible in regards to your tax situation. Not true. In the U.S. if you create an LLC or S-corp you can pay yourself a salary and also pay yourself dividends (sometimes called distributions). Both salary and dividends are subject to regular income taxes, but only the salary is subject to payroll taxes. The justification goes like this: if you were paying an employee, you'd pay them a fair salary and then take some extra for yourself as the owner. The owner's payment isn't technically a salary so you don't need to pay payroll taxes on it. Lots of single-person companies play games with salary and dividends to try to drive their payroll taxes as low as possible. The IRS can crack down on those owners that don't pay themselves a fair salary in an attempt to evade taxes.

karnajani 13y ago

I thought we were calling ourselves consultants now.

mprat 13y ago

I get the marketing / branding aspect. From a contractor's point of view, though, there still isn't any guarantee that the firm that is you that is doing contract work will do quality work - there is no audit system other than referrals anyway. I wonder why people are more inclined to refer companies than individuals. Do companies incur more overhead for the client?

robertnealan 13y ago
Agreed that there isn't any guarantee of quality work - largely it comes down to their public portfolio and referrals. At the end of the day there's a big difference between "I know this company that does great work" and "I know this guy that does great work". As far as overhead goes - currently it's mostly the same, but part of my motivation to go the "company" route is the ability to hire someone else in the near future. Once that starts to happen there will be a lot more overhead to consider regarding labor costs, employee income taxes, hardware, etc.
bdunn 13y ago
Companies tend to project stability more than individuals. I remember being a hard ass about ensuring that our office was full of life whenever a prospective client came to visit. Even though my employees could just as easily work from the corner coffee shop or home, the idea is: A company with overhead and payroll is obviously doing something right and likely more permanent than this freelancer I met working from his house. Therefore, they're more likely to succeed. The perceived risk of failure is the #1 reason proposals are rejected. You don't need a brick & mortar office or whatever to help mitigate that risk, but it helps.

bdunn 13y ago

It really all boils down to risk management. If you're a self-identified say, "Ruby freelancer", the value proposition is "I am an independent Ruby developer for hire". For staff augmentation gigs or applying for a FT position, this is all well and good, because whoever's hiring is looking for warm bodies with specific technical capabilities. However, many companies are looking to solve specific business problems and might not know how. Simply hiring a developer who happens to know Ruby doesn't guarantee that the problem will be solved — it's a huge risk. It's sort of like saying, "all I need is someone who knows how to swing hammers if I want to build my wife and I's dream home." Mitigating that risk means stepping away from the "<technology> freelancer" title and becoming a business consultant who happens to use e.g. Ruby to solve business problems. On your end, this is going to require less time spent thinking about the technology, and more about the path to solving the underlying problem at hand. From the perspective of a client, this is a much safer bet. And when there's less risk involved, clients are willing to spend more. And treat you more as a consultant. And you'll be happier, your closing rates will go up, etc.

nork 13y ago
Yup. The trick is picking your ideal demographic and catering your "brand" to be most attractive to them.
mjn 13y ago
This really depends a lot on the business. Even for consultants, many companies prefer to split business and technical consulting, sometimes contracting them out separately, or sometimes just contracting one of them out as needed. In that situation, they typically do not want the technical consultant involving themselves in the business case, because they were hired to solve a technical problem, not to second-guess the role of the technical problem in the hiring company's business. This is particularly common in large companies hiring engineering consultants: a metallurgy consultant hired by Exxon or BP to assist with a design or problem (actual example a friend does regularly) is supposed to provide technical input on metallurgy as required, not try to sell a company on the value proposition of Metallurgical Solutions. Their value proposition is that they are an expert who can provide expert advice and problem-solving in a specific technical domain.

pvnick 13y ago

This seems like a great idea, one that I've been tossing around in my head for a while now. To the skeptics (of which HN has in droves), has anybody ever gone in the reverse direction, ie, from having their own client-funded business to being "freelance"?

scarecrowbob 13y ago
I have. I consider it better insofar as it pushes some business development problems off on other folks. I am in demand enough that it's no problem finding remote projects and people who are super happy to find someone who has better than average skills, and to pay accordingly. Not to mention that I live in an inexpensive area of the US close to a tech hub but with flexible employment laws. It's a lot less of a headache as I don't have to sell to folks other than the people who are, in turn, selling my skills. I just do the work. While it cuts my rate by a lot (maybe 50% in most cases), that's a fine tradeoff for picking up a lot of risk and uncertainty. The problem is that, as a business, I had to deal with scaling and bringing in more folks to do work if I wanted to grow or expand and deal with sales and marketing just to stay in business. As a freelancer I make plenty of money at my own schedule, but can't really make the next big income jump. I'm okay with that for the next couple of years (my kids are finishing middle school), though I imagine that at some point I will possibly get bored with the work and, at that point, try and return to being a "business". On a related note, though, I also rent my house for similar reasons.
dspillett 13y ago
I've known people do that when their small business was sold to a larger one, and they did not want to stay at the larger company for longer than the hand-over period. Though they have eventually grown back to having a new small business with employees, so haven't stayed as singleton freelancer so they might not count for what you are asking.
deleted 13y ago
[deleted]

jsonne 13y ago

I think it's an issue of signalling. In Econ they call it information asymmetry. When one party knows more than the other they try to give us "signals" to show their quality. It seems as though as packaging yourself as a company you've managed to signal that it's a serious endeavor as opposed to a passing freelance gig.

damon_c 13y ago

I don't have time for all that marketing stuff... I'm too busy freelancing!

bluedino 13y ago

From the other side of the table - I might be much more likely to work with "John Smith, Designer", than I would with "John Smith Design Studio". Why's that? When I work with "John Smith, Designer", I'm getting John. When I work with his design studio, he might be billing me for work done by his intern or the guy he hires that isn't as good as John.

beachstartup 13y ago
this is not a concern of actual customers who buy actual stuff for actual, significant amounts of money from John Smith Design Studio because John Smith Design Studio has an impressive portfolio and track record and client references. if not, well, you can simply just ask John if he's going to be the guy working on your stuff.

parasitius 13y ago

So ... Question. Can someone please tell me what a business license is? I'm the president of my own corporation, s corp, but have never obtained or heard of the term 'business license' except informally.

parasitius 13y ago

So can someone please tell me what a business license even is? I'm the president of my own corporation, and still don't know, I've never seen it formally just casually mentioned

jakejake 13y ago

I've never really thought that much about having a company just for branding purposes. But, I've run my business as an official corporation for about 10 years now, even though I haven't been 100% freelance for all of that time. There's some running costs for the corporation itself, but but it has a lot of benefits, tax deductions being an obvious one. Also if you don't have a corporate tax ID and bank account, then some clients may insist on withholding taxes and pay you as regular employee, so that they don't look like they're trying to dodge payroll tax. Again this affects your ability to control your own salary and tax filing and you can avoid it by billing them as an officially registered corporation with checks written out to your company, not your personal name. The corporation also helps if you bring on more people to help because you can pay them properly with tax withholding and everything is legit. It's not really that much work using an online Payroll service. I definitely recommend it if you are earning more than a few thousand dollars per year.

ndcrandall 13y ago

The main differences between being an individual vs a company are the intentions for which a client hires you. Being 'Designer John Smith' attracts companies hoping to lure you in as a full time employee eventually. This can be good for finding work when you don't decline the possibility of full time work, but can burn bridges when you decide to leave the client. Being 'John Smith Design Studio' attracts clients looking to offload development to another company in order to meet deadlines and get stuff done.

brennenHN 13y ago

This is the kind of positive practical advice I wish there was more of on Hacker News.

throwmeaway2525 13y ago

Cheating a bit since I didn't read the article, but having been in and out of that world for a number of years, there were always certain types of clients who didn't want to hire a company--they only wanted to deal with individuals, for reasons stated or unstated.

skrebbel 13y ago

This feels very culture-specific. Purely anecdotally, I started freelancing a few months ago, and my experiences are very different. I live in the Netherlands. Here, relatively few programmers decide to freelance, and most who do clearly present themselves as a one-man company, not just as "a guy". It's also impractical to freelance without being registered as a business, so maybe the registration process helps some starting freelancers "flip the switch". Also, I've never experienced anything like pity, as the OP describes. Much rather, people appreciate that I dare taking the comparatively high risk involved (I don't think it's a high risk at all, but many people used to a European-style safe job contract feel differently).

rodgerd 13y ago
Definitely culture-specific. Freelancers are common in New Zealand, sometimes as sole traders, sometimes as one-person companies (the difference is pretty marginal, since setting up and maintaining a company in New Zealand is relatively cheap). I did it for a little under a decade before deciding I was a shitty employer for myself.
roel_v 13y ago
Well I'm in the Netherlands too (although I consult for international clients mostly), and my experience is opposite from yours and very much in line with the OP's :)

lsc 13y ago

huh. Interesting. The thing is? I have no trouble at all getting freelancing or "contract" work where I'm paid by the hour, and where I'm expected to pretend like I want to be a full time employee. I mean, other than the pretending, I have no objections; usually the work is easy and the pay is good. The thing is, I like mercenary work, and I'm good at it (Most of the gigs I've gotten, well, they seem to be looking for someone who wants full-time work but can't get it without contracting for a while first. Generally speaking? I am better than most people who can't get full-time work, and way better than most people who can't get full-time work, but who can pass the contracting interview process.) I have a business (and a business licence, and a corporation, and employees, and health +workers compensation insurance, and actually rather more revenue from hosting/VPS customers than I could reasonably expect to make from consulting) - but I still don't have whatever it takes to get larger or more monied companies to hire me as a company, rather than as a freelancer. It's... odd, 'cause generally speaking? I don't hire people who aren't better than me. If you can hire my company, rather than me? even if you are paying rather more, you are getting a significantly better product. Now, you could say, the primary difference is that when freelancing, often I use a body shop. Which could be the case; but more than once, I've had a manager call me back after I've left and negotiate a new deal (that he then takes to the body shop) so I guess I'm a little unclear on what value the body shop is bringing the client, so I have no idea how to go about replacing them for my corporation. (the body shop is bringing me value in the form of giving me access to clients who won't do business with my small company.) Edit: note, I /can/ get gigs without a body shop, and flat-rate gigs, too... but... the people I can sell to directly? Generally speaking, they have... much smaller budgets. To the point where I end up making less money. A whole lot less money. So, that's my problem; it seems that the body shops are only set up to deal with hourly work, and it seems that I lack something that companies with money need in order to do business. I have been called unprofessional, and eh, I have a hard time arguing... but like I said, I do just fine; generally far above expectations when going through a body shop, and I /do/ have an infrastructure for outsourcing more of the professional bullshit. To be clear, I'm not saying the body shop isn't bringing value to the customer... just that I don't know what that value is.

snapoutofit 13y ago
Have been through more or less the same process as you stated. Its really tough to define what value as you pointed out at the end. Faking the full-time bit is completely true, does not make sense ... but then seems to be a necessity.

krrishd 13y ago

In my case, it really worked the opposite way. When I was an 'agency', I barely had any clients because they didn't feel personal. When I used my name, they were more comfortable and were able to relate more, thus feeling more inclined to hire.

kristofferR 13y ago

I'm struggling with this, since it feels slightly like lying to call just myself "we". What should I answer when the clients ask who "we" are?

toggle 13y ago
I can imagine some clients would find it disingenuous to have a company name when it's just you, yeah. This post was interesting because my current boss had the exact opposite experience. He said when he dropped the "company/we" terminology he had been using and was upfront about how it's just him, his relationship with clients improved greatly. It probably all depends on the types of clients you have.
- bdcravens 13y ago
  I think you can mitigate this by having a company name that doesn't imply size ("Newtech Associates"), avoiding cliche marketing copy and clip art photos (generic hand shake, "We are committed to quality and teamwork"), and putting your photo and info on your "About" page (and don't call it "About Us" of course)
kintamanimatt 13y ago
It's called the corporate we and it's fine to use! You might be a one-person company but really there's always at least two people: the natural person (you) and the juridical person (the company), hence "we".[0] [0] http://en.wikipedia.org/wiki/Legal_personality http://en.wikipedia.org/wiki/Legal_personality
robertnealan 13y ago
Just be honest. In my case I tell them I'm currently the only full time employee but expect to grow over the next 12 months, but that doesn't have to be the case. I admit I sometimes feel like Smeagol when I use the term "we", but ultimately it helps preserve the delineation between the company entity and myself as its employee.

j45 13y ago

There is a big mindset shift between freelancer, to contractor, to consultant and beyond. All, however, can be relevant and it's important to know which one you can provide and what a customer is looking for. I have a post somewhere here on HN outlining it if I can find it.. :)

jonnathanson 13y ago

It really depends on what types of clients and gigs you want to take on, and what sort of ambitions you have for yourself as a one-man shop. Do you want to remain a one-man shop? If so, biting off more than you chew can be hazardous to your health (literally). You don't want to land the Pepsi account if you're not ready to handle Pepsi volume. By presenting yourself as an agency, you might signal a higher degree of professionalism and (theoretical) resources. You're more likely to get into serious contention for those Pepsi contracts. At the same time, you might be signaling yourself as being too big or too expensive for the thousands of smaller, more easily attainable, ad hoc gigs that really do want an individual freelancer. And BTW - you really don't want large-scale engagements, the kind that routinely go to actual agencies, if you're not running an agency. Those gigs are designed for agencies with staffs and resources to deploy. There will be more volume than you can handle as an individual contributor -- including all the work involved in client management, reporting, schmoozing at the corporate HQ, etc.

dangero 13y ago
Good points. I would enjoy reading about companies that went from single contributor to agency smoothly.
- a-priori 13y ago
  I think partnering with a handful of other ex-freelancers would be a better route to creating an agency than building one single-handed. That's how a consulting firm I used to work for got started, as a partnership of 5 (I think) developers. About 15 years later, they're now ~200 people strong.
robertnealan 13y ago
All great points. Personally, I am looking to grow my business to be more than just me and it was one of my main motives to start presenting myself as a business, it just happened to carry with it the beneficial side effect of being seen in a more professional light (most if not all my clients are aware I'm still the only full time employee). Regarding taking on too large of a project should you wish to remain a one-man shop - all I can say is that the projects you turn down are equally as important as those you accept. You have to know both your abilities and the limits of what you can do as one person. Also, I'm more of a Coke person.

etanazir 13y ago

note in related post 'Investors don’t want to meet you. They wanted to be introduced to you (42floors.com)' ...human beings have a default filter on self promotion. If you are promoting a 3rd entity; even the shell 'myCo' you can apparently circumvent the first layer of this defense.

sciguy77 13y ago

That is a fantastic point. Where would IDEO be if David Kelley didn't first make the leap to David Kelley Design?

fencepost 13y ago

I'm hoping to do this by the end of the year or soon thereafter, just so I can start working on being an employee (W-2) of my own company. My motivation was listening to Gina Trapani (of Lifehacker, etc.) talk on the In Beta podcast (http://5by5.tv/inbeta/73 http://5by5.tv/inbeta/73) about how she and her partner in applying for a mortgage basically were having to leave out Gina's income because as a self-employed and 1099 contractor with multiple revenue streams her "career" is too complicated in ways that banks are just going to ignore/reject anyway. I consider myself lucky in that I bought my home (and signed my mortgage) in the waning days of my time at a midsize company, but I don't expect to live here forever and with the way banking changed after 2008 I'm sure I'd have a very hard time getting a mortgage now even if I was putting down 50% of the purchase price up front.

blisterpeanuts 13y ago
I went through that same thing -- managed to schlock through a mortgage just as a contract was ending and I was going back to school. I've never missed a payment or given the lender any reason to regret lending me the money - but had I applied a month later, they would have turned me down. I realize now that an elegant way to handle this type of situation is through an LLC where my annual income is a separate fact from the on-and-off-again nature of contract tech work.

martininmelb 13y ago

For what it's worth, if you do decide on a company, call it something modest - and don't try to pretend that you're something that you're not or pretend that you're bigger than you are. Seeing a business card that reads: John Smith CEO and President John Smith Global Design Enterprises just does not cut it.

greenyoda 13y ago
Also, "Suite 18A" in your address doesn't really impress people. Anyone can change "Apartment 18A" to "Suite 18A" in their address, and their mail will still be delivered to the same place. And it's pretty obvious to a customer that if the "CEO" answers his own phone and they never meet any of the CEO's employees, they're dealing with a one-man operation that's putting up a fake front.

Nursie 13y ago

Meh. In the UK this line is non-existant. To be a freelancer you set yourself up as a company (it's the most tax efficient way) so exactly whether you position yourself as a body for hire or a solutions company is up to you. If you want to be a solutions company then be prepared to be a salesperson as well as engineer. If you want to be a body for hire then there are hundreds of agencies that will do that part for you. They're all assholes, but that's their job.

PilateDeGuerre 13y ago

Hey Robert, Thanks the article and the debate it inspired. Tell me, was picking a company name that Google attempts to auto-correct a conscious choice? I couldn't get to your website just by searching for your company's name on my first try. Follow up: About how long do you think it will take Google to recognize I am not making a spelling error and I am looking for your services?

josh_rosenblum 13y ago

One of the signaling effects this may have is that your corporate identity has built up re-usable processes, code libraries, infrastructure, and other IP. This itself can be useful both as a signal and practically. If you can talk about the corporate identity having processes in place -- even something as simple as a repeatable process for escrowing code -- this can be something that a potential client can lock onto versus a "freelancer" with no repeatable process. It may be an irrational bias, but I'd be willing to bet that most prospects would be more willing to ascribe repeatability and predictability (a key point in evaluating service providers, no matter the scale of the job) to a corporate identity than to a personal identity.

rbreve 13y ago

My experience us the other way around, I have been working for my web dev company for around 10 years, we had a lot of projects, but we also had a lot of expenses, at the end I was working 12+ hours per day and not making that much money. We had to close the company, now I am a freelancer, working less hours from home and making more per hour. It is less stressful and I get to pick the projects I like more. At the end it all depends, you can't generalize for everyone.

jorisw 13y ago

I freelance by my name and only my name because I think pretending to me more than yourself is selling people BS. The clients who hire me and have hired me are able to make the distinction between a 'cute' freelancer and a professional who will deliver.

dreamdu5t 13y ago

I did the same thing. I freelanced under a company name, with most people not realizing it was just me. There's no reason not you really, the benefits are so numerious in how people perceive you. Honestly, I thought a lot of people did this. I'm shocked that this is a novel idea to many freelancers in the comments. Branding is everything as a freelancer.

leknarf 13y ago

In general, presenting yourself as a professional is essential, but it’d be disadvantageous to act like a dev shop if you’re an individual. In technology, there's a general distrust of "general contractor" style operations. No one wants to hire a developer for $200/hr, only to have him turn around and send the work to an off-shore developer for $20/hr. In fact, most freelance contracts have "no sub-contractor" clauses that explicitly disallow this. Because of this mistrust, some clients don’t even consider working with out-sourcing firms and instead actively seek out individual contractors. They want professional contractors (you should have a LLC, a tax ID number, real legal contracts, etc.), but want that professionalism to come with a human face. Any individuals that are trying to compete with the dev shops are missing out a big market that’s a more natural fit. We’re actually running a startup (http://getlambda.com/ http://getlambda.com/) that represents professional freelance developers and helps them find precisely these sorts of hiring companies. If anyone is looking for help starting or expanding a freelance business, we’d be happy to chat about what we’ve learned.

robertnealan 13y ago
I'm not so much suggesting to act like a full dev shop as I openly disclose to my clients that I'm the only current full time employee, but instead to present yourself as a company to whom they can hire and get professional results in return. Unfortunately this does admittedly get abused by people who sub-contract work offshore, but unless your the new guy on the block your portfolio generally starts to speak for itself. Took a look at Lambda (good design work) - how do you differ from a good recruiter connecting freelance contractors with 6-12 month gigs?
- leknarf 13y ago
  I expect you're striking the right balance, but I've also seen cases where new freelancers get too excited to be a "real company" that they start emulating all the worst parts of large organizations and lose the benefits of individuality. Startups are guilty of this too. There's a reason our website has my email address on the home page instead of just a contact form. Anyone who wants to contact us can reach out to me directly. We won't be able to continue that as we grow, but it's a great advantage right now. Regarding Lambda vs recruiters: we're complementary. A recruiter is usually hired and paid by a company to fill a given role. We're hired and paid by a developer to fill his freelance calendar. We screen clients to ensure they're actually the types you want to work with, we negotiate on your behalf to get you higher rates, and help you brand/position yourself to get you more work in the future.

krmmalik 13y ago

Hmm. I have mixed feelings about this. I do agree with the sentiment but my experience has been different. I think it depends on your target audience. I've found when working with Start-Ups they prefer the personal touch and want to deal with me as an individual. I can email from my gmail account, conduct consultation over skype and even put smileys in my email. I've found it very easy to attract and nurture leads. When dealing with a conventional business however, everything changes. I need a corporate email address, a limited company name, VAT reg and everything has to be done in person. Even just getting a reply to my email is hard work. Not to mention, even if I do get my foot in the door with an initial consultation, convering that into paid work is seriously hard work because i have to deal with things like being on an approved supplier list etc. So yes, if your target audience is B2B (traditional) I'd agree, but if it's consumer or start-up - not so much.

tobinharris 13y ago

Love this story. Robert has just re-marketed himself by simply switching his workspace and by using a legal entity to represent himself. These tweaks have had a positive impact on how he's perceived by clients, and how he perceives himself. And now we can sell more confidently, earn more money and have more fun. Win.

thibaut_barrere 13y ago

Funnily, around me the opposite is true: clients I know are actively avoiding consultancies/companies in favor of freelancers, because some of those consultancies have the bad reputation of selling gradually more low profiles for expensive prices.

mehmehshoe 13y ago

This reminds me of a PandoMonthly talk with Chris Sacca: https://www.youtube.com/watch?v=iqUG2_cmZ6I https://www.youtube.com/watch?v=iqUG2_cmZ6I He talks about his "aha!" moment when he was broke and then realizes the people he meets would rather see him as a part/leader of a team, and not an individual. The moments I refer to are between 32-36 minutes.

johnkpush 13y ago

We prefer hiring consultants who bill us as a business rather than as an individual. It's risky and more costly hiring and paying an individual consultant: * If an individual consultant gets injured, we'd have to pay the individual's worker's comp/unemployment benefits. * When it's B2B, we don't have to worry about 'tax nexus'. If we're based in NY and hire an individual in California, we now have to register and pay some tax in state of California. Hiring a business erases that responsibility. * The consultants who have a business are usually more serious and mature. Invoices are cleaner and the experience is more professional all around. Sounds cliche but it's true. Edit: formatting

robmcm 13y ago
I find that a lot in the UK, it's a lot better to get set up as a limited company than a sole trader. Some companies and even industries won't touch you as an individual. I guess it's related to the personal liability etc

manismku 13y ago

That's quite true. During past couple of months I have seen real talent is not sitting in front of your desk and do coding. This way you can walk but can't run. Everything depends how well you sell yourself and make good picture in others mind. Ultimately your goal is presence outside your desk / room. I will say what you have experienced is ground reality about how business works.

ChristopherM 13y ago

Tl;Dr "Perception is 9/10 of reality" This was a good example of how it can yield results when selling your services. It's also very valuable if applied correctly to many areas of life. As an employee, customer, a defendant in a legal case, when you are trying to attract a mate, etc... The important thing to remember is "how do others perceive me?". Based on that "what can I do to change their perception?" Of course you need to figure out what image you want to project; that image is also situation dependent.

mikkom 13y ago

> Behind the scenes barely anything has truly changed This might be is different from country to country but legislation is usually very different when you are freelancing vs contracting as a company. So even if the author doesn't understand it yet, when shit hits the fan he will (and I don't want to sound too harsh but eventually with companies it always will).

yaelwrites 13y ago

I like this. It's all about positioning. I'm technically a freelance writer/editor, but I've found that when I call myself a "content strategist," I can command much higher wages doing the exact same work (since I have to do social, deep analytics, etc. as a writer anyway).

marknadal 13y ago

While I haven't gotten a business license, I have found that regularly increasing my hourly rate for new clients has done wonders, and moving from hourly to then daily to weekly rates. I now position myself as a data and code synchronization specialist, I guarantee my clients a seamless use of their data and code no matter where it is, and this is enough value that people are eagerly willing to pay. Be the specific solution for a company, then you'll be in charge - not the other way around.

mcv 13y ago

I did this right away when I became a freelancer. Registered my own company, which I understood to be necessary to send invoices. Got an office to work from. But I'm still a freelancer. Or an independent contractor, but what's the difference?

wojt_eu 13y ago

Disclaimer: below opinions based solely on personal experience As a "freelancer who knows how to deliver and maintain software" I easily find clients who understand prototyping, prioritization, shipping features incrementally. As soon as I try to market myself as "software company", every conversation seems to start with – excuse my language – estimating and budgets. What's more, they ask to estimate something vague, "oh and here we do some reports, maybe with charts". I prefer estimating only small bits to inform decision at hand: do we refine the design so that it looks less "Bootstrapy" (2 days) or add referrals feature (3 days). And in my experience clients who embrace this style of work seek "freelancers".

anovikov 13y ago

I had a completely opposite experience. Nobody wants a company because everyone thinks a company with simply hire a few Indians, make a 3x profit, and add no value. Freelancer gets way better reception. I even know a lot of consulting companies who pretend to be a bunch of individual people, hiding the fact they are linked, and don't know any examples of the ooposite - an individual pretending to be a company - and i see no reason from a customer's perspective to prefer a company to an individual unless they have a job so big/diverse that an individual can't do it.