6 ms·

I'd recommend shooting for freelancing income which doesn't just match your burn rate but comfortable exceeds your day job salary (as a start -- it should go up

by patio11 13y ago

I'd recommend shooting for freelancing income which doesn't just match your burn rate but comfortable exceeds your day job salary (as a start -- it should go up quite a bit from there), as otherwise you're doomed to a hand-to-mouth existence. 3 weeks without a paycheck isn't exceptional in freelancing, at all. If you want to do it full time, get used to that happening a lot. The risk of it has to be built into your weekly rates. Also, your projection that you will have 1.8X your monthly expenses in March is a projection -- in the real world of freelancing, you're going to have things like "client flaked on the project; two weeks which I had assumed sold are now empty", "client refuses to pay $10,000 invoice", "I had to pay $3,000 out of my pocket for professional liability insurance to secure the next gig", etc etc. And if you think that level of cash flow juggling is fun, wait until you have employees! You should, as soon as reasonably practical, stop sourcing gigs from oDesk/elance/etc and start sourcing them from clients who pay professional wages for professional work.

vorador 13y ago
By the way, how would you go about getting work from real clients? I can easily get work on elance but I find it hard to make the switch to "real" clients. I'm a generalist, should I find some sort of niche? Or should I raise my rates to attract better clients?
- 650REDHAIR 13y ago
  (No experience doing this, take with grain of salt) I'd imagine you would use your oDesk/elance gigs as a portfolio and get involved in whatever niche community you'd like to work with.
- glimcat 13y ago
  Have some skill where you can do X and it will cause money to happen for the client. Use existing knowledge of some narrowly specific type of business to give you intimate knowledge of the unique concerns those people have, how they talk about it, and what boundary conditions are going to affect which solutions do and don't fit well (e.g. gourmet pizza joints near college campuses, or heritage language schools to steal a previous patio11 example). If you don't have that sort of knowledge already, talk to people until you do. If you do have that sort of knowledge already, keep talking to people anyway because you still have plenty more to learn. Use knowledge of this specific customer to find, approach, and pitch clients who are a good match for your target customer. If you don't know how to find them, you don't know them yet. Then, pitch them: "You can have me do X which will cause money to happen for you." "I'm aware that you have concern_a and concern_b, which I will handle using specific_approach, whereas generic_person_235089 doesn't even have a clue about these important_issues." LISTEN to what they say, then use it to refine your ability to select potential clients and to improve your future pitches. Easy, easy, easy hack: remember the words they use to describe things and use EXACTLY those words when pitching them. Run 10 pitches, review, repeat with another 10 target customers. Make money. Then, go read tptacek's guide to scaling your practice: https://news.ycombinator.com/item?id=4247615 https://news.ycombinator.com/item?id=4247615 P.S. It's okay to be a generalist on the back end. It's not okay to be a generalist when you pitch. Address a clear, specific problem for a clear, specific target customer using clear, specific language which shows sensitivity to the issues as THEY see it and talk about it. 98% of people pitch by talking about things that are really their problems, not the client's problems. Actually, saying 2% of people clear that bar is probably being too generous. If you aren't sure, a good trick is to ONLY use language that you've heard come out of a customer's mouth.
  - chii 13y ago
    where do you find these people to talk to? any specific location/meetups? i would think that the enterprise clients that can pay for such professional services don't tend to go to language/startup meetups.
    - glimcat 13y ago
      For my particular geographical location, tech meetups are pretty much a wash. Also I usually prefer to target non-tech clients which will care about results vs. wanting to debate choice of database. Also, meetups are mainly good for random socialization and free beer. Sometimes networking, but often only incidentally. You need to get way more targeted than "tech people in my area who also want socialization and free beer." Scrounging at meetups is the last resort of people who don't know who their customer is yet. Being able to find your customer is one of the first things you have to learn about them. And to start out, go about it like you would trying to find any other thing - just, be a lot more determined and creative about it than you would trying to find a local pizza joint to order from. Say you want to land a heritage language school as a client. Where can you find these people? Where can you find their clients - who might be happy to talk to you at length about which schools in the area are best for people who are concerned about heritage language education? * Get on Google, Google Maps, Yelp and search for heritage language schools my_city. * Check forums and trade publications relevant to heritage language schools. If you don't know them, find out while you're learning the other stuff. * Track down bloggers who write about heritage language education, see if they mention any specific schools / issues, research those. Connect with any users you find in e.g. comments, guest bloggers, etc. * Guess that many people who are customers of heritage language schools are second or third generation immigrants. Where else can you find these people? Are there churches, community centers, or local shopping resources that also target them? Find your customers - by way of their customers or competitors if necessary. All of the above probably have something useful to teach you about making your business succeed.
      - lazerwalker 13y ago
        How do you recommend finding a niche like "heritage language schools"?
- walshemj 13y ago
  Register with agencies (aka pimps) that specialize in contract work all recruitment consultancies have a contractor arm.
- majc2 13y ago
  You might like Alan Weiss's "Million Dollar Consulting"
  - ssharp 13y ago
    Weiss is a strong advocate of value-based pricing. Instead of pricing yourself on some per-hour basis, you quote prices based on the value you provide. I think this makes a lot of sense, but Weiss is basing these ideas from management consulting, legal consulting, and other similar types of professional services. I couldn't comment on the tech market, but many companies may be unwilling to commit to this type of pricing out of irrational discomfort. I think Patio11 has advocated for longer period pricing (weekly, monthly) which might be a good medium between hourly billing and value-based. You're going to get better prices for yourself and your clients will be more comfortable with more familiar pricing. Personally, I wouldn't attempt to freelance without already establishing a real network outside of work farms like Elance / oDesk. You can still work on side projects and present at conferences while working another full-time job. You can build your presence and authority and if you do a good job, you'll get the type of industry recognition you need to get inbound requests, before you even start advertising your services.
    - napoleond 13y ago
      I haven't read Weiss, but I work as a software consultant and while it's true that clients typically expect prices in the form of a money:time ratio (and also true that it is to the consultant's benefit to use a larger unit on the time side of that ratio) the only way to get paid the sort of wages Patrick talks about is to anchor that money:time ratio against value. In other words, the pitch is "I think I can generate $SIX_FIGURES of additional revenue for you over the next year with a project that will take my team $SINGLE_DIGIT weeks. It will cost you $FIVE_FIGURES." So the invoice will probably have a line item that includes units of time with a large price tag attached, but the sales conversation did not revolve around that ratio. (I want to include the unsolicited caveat that none of this is easy. A less experienced version of myself might have/did read someone else's version of this comment and thought "I should be a software consultant! Thousands of dollars a week! Wow!" when the reality is that you still need people to sell to, you still need to be able to deliver on your promises, and you probably need to offer some level of support and maintenance for whatever you end up developing for your clients. I really enjoy this line of work, far more than a "real job", but it's much more stressful at times and so far--one year in--I'm making less money than I otherwise would be. It's true that the potential upside is greater, but I don't recommend getting into consulting for that reason unless you already have a significant personal network of prospective clients.)
- rmcastil 13y ago
  Referrals is a big way to make the switch. You want to do such an awesome job for a client on Elance that they'll want to hire you. The best way to do this is to figure out a clients return on investment when hiring you. If they're hiring you for a contract worth $10,000 is the work you're doing going to make them at least $10,000? Is the work you're doing for them going to streamline a pain in their business that's worth $10,000 to solve?
- wikwocket 13y ago
  At the risk of preempting another great reply from Patrick here, let me link a prior related comment he made, on demonstrating value to "real clients" as you put it, and some approaches to finding them: https://news.ycombinator.com/item?id=6391277 https://news.ycombinator.com/item?id=6391277 Here is an example. A local lawyer in my community is always holding seminars at local libraries on things like taxes, writing a will, estate planning, etc. These are free informational seminars, so the libraries and village halls basically do the advertising for him. During the seminars, he gives an overview of the topic, and why you might want a lawyer to help with the trickier bits. Now, when some self-selected interested people decide they want a lawyer to help write their will, who is the first person you think they'll call? Maybe the nice helpful clearly-well-informed and capable guy who gives all that free advice at the library? When you see a free online webinar for a technology topic, this is often what is going on. It's just formalized networking: meeting people interested in X, demonstrating you can provide services Y related to X, and making it known that you do Y for X all the time, and boy is it effective.
- mekarpeles 13y ago
  Consider creative ways of finding fellow freelancers and partner with them to share relevant opportunities. Ideally, partner with people you respect as being equally smart and driven. We are often judged by our friends.
rmcastil 13y ago
> 3 weeks without a paycheck isn't exceptional in freelancing, at all. I agree 100% with everything patio11 had to say. There is real fear involved when you have these low periods. Just because you're overwhelmed with work now doesn't mean you will be four months from now. But you should definitely celebrate the fact that you've proved to yourself you can get clients to pay you! I don't think your only options are to quit your job ASAP or wait for 6 months. Instead what I'd suggest is redirecting all your extra freelancing income to a savings account (bonus points if its an account opened up for your business). Save enough to make yourself feel comfortable with the idea of a contract potentially dropping out of nowhere and not being able to find work for three weeks. Once you hit that amount in savings reevaluate. Are you still getting enough work? Are your past clients going to give you great word of mouth referrals (which is one way to switch off of Elance)? The big thing is you don't want your emotions to control your business decisions. I actually wrote a whole blog post on 'How Savings Impact Freelancing' http://challengeacceptedhq.com/how-savings-impact-freelancing/ http://challengeacceptedhq.com/how-savings-impact-freelancin... Good luck and congratulations!
JanezStupar 13y ago
I view 3 weeks without work as a feature, not as a problem. Also it is quite possible to earn a professional wage on Elance. There are people willing to pay serious money to serious people on Elance. But I believe that a freelance should always keep at least six months of living expenses worth of funds in liquid assets.
- pathy 13y ago
  > I view 3 weeks without work as a feature, not as a problem. 3 weeks without work can mean real cash issues, especially for those who are just starting out in freelancing. It may be nice to have a three week break but let's be honest, most would be terrified and be frantically hunting for work. Hardly a feature. >But I believe that a freelance should always keep at least six months of living expenses worth of funds in liquid assets. But if you have a six month emergency fund, then it may be a feature I guess ;). Many do not though.
  - nbouscal 13y ago
    If you don't have a six month emergency fund, regardless of whether or not you're a freelancer, one of your top priorities should be building a six month emergency fund.
    - pjungwir 13y ago
      I strongly agree with this. I freelance, and having the savings to cover slow periods is not just reassuring, it also helps me advance professionally. I feel safe passing on bad clients and insisting on my rate, because I'm not living check-to-check. I'm not saying you should keep your day job until you have a full 6 months, but you should have something, and you should aggressively save until you've reached 6 (or more). I also like to have one big (20 hours/week) project at a time, along with a bunch of smaller long-term relationships that bring in steady low-volume work. That means even if you're between big projects, you still have some work and some income. I don't think I've gone 3 weeks with truly zero work since I started freelancing.
  - pessimizer 13y ago
drdeadringer 13y ago
> start sourcing them from clients who pay professional wages for professional work Besides throwing a dart and cold-calling where it lands, what other "how" is there to this?

by patio11 13y ago

vorador 13y ago

By the way, how would you go about getting work from real clients? I can easily get work on elance but I find it hard to make the switch to "real" clients. I'm a generalist, should I find some sort of niche? Or should I raise my rates to attract better clients?

650REDHAIR 13y ago
(No experience doing this, take with grain of salt) I'd imagine you would use your oDesk/elance gigs as a portfolio and get involved in whatever niche community you'd like to work with.
glimcat 13y ago
Have some skill where you can do X and it will cause money to happen for the client. Use existing knowledge of some narrowly specific type of business to give you intimate knowledge of the unique concerns those people have, how they talk about it, and what boundary conditions are going to affect which solutions do and don't fit well (e.g. gourmet pizza joints near college campuses, or heritage language schools to steal a previous patio11 example). If you don't have that sort of knowledge already, talk to people until you do. If you do have that sort of knowledge already, keep talking to people anyway because you still have plenty more to learn. Use knowledge of this specific customer to find, approach, and pitch clients who are a good match for your target customer. If you don't know how to find them, you don't know them yet. Then, pitch them: "You can have me do X which will cause money to happen for you." "I'm aware that you have concern_a and concern_b, which I will handle using specific_approach, whereas generic_person_235089 doesn't even have a clue about these important_issues." LISTEN to what they say, then use it to refine your ability to select potential clients and to improve your future pitches. Easy, easy, easy hack: remember the words they use to describe things and use EXACTLY those words when pitching them. Run 10 pitches, review, repeat with another 10 target customers. Make money. Then, go read tptacek's guide to scaling your practice: https://news.ycombinator.com/item?id=4247615 https://news.ycombinator.com/item?id=4247615 P.S. It's okay to be a generalist on the back end. It's not okay to be a generalist when you pitch. Address a clear, specific problem for a clear, specific target customer using clear, specific language which shows sensitivity to the issues as THEY see it and talk about it. 98% of people pitch by talking about things that are really their problems, not the client's problems. Actually, saying 2% of people clear that bar is probably being too generous. If you aren't sure, a good trick is to ONLY use language that you've heard come out of a customer's mouth.
- chii 13y ago
  where do you find these people to talk to? any specific location/meetups? i would think that the enterprise clients that can pay for such professional services don't tend to go to language/startup meetups.
  - glimcat 13y ago
    For my particular geographical location, tech meetups are pretty much a wash. Also I usually prefer to target non-tech clients which will care about results vs. wanting to debate choice of database. Also, meetups are mainly good for random socialization and free beer. Sometimes networking, but often only incidentally. You need to get way more targeted than "tech people in my area who also want socialization and free beer." Scrounging at meetups is the last resort of people who don't know who their customer is yet. Being able to find your customer is one of the first things you have to learn about them. And to start out, go about it like you would trying to find any other thing - just, be a lot more determined and creative about it than you would trying to find a local pizza joint to order from. Say you want to land a heritage language school as a client. Where can you find these people? Where can you find their clients - who might be happy to talk to you at length about which schools in the area are best for people who are concerned about heritage language education? * Get on Google, Google Maps, Yelp and search for heritage language schools my_city. * Check forums and trade publications relevant to heritage language schools. If you don't know them, find out while you're learning the other stuff. * Track down bloggers who write about heritage language education, see if they mention any specific schools / issues, research those. Connect with any users you find in e.g. comments, guest bloggers, etc. * Guess that many people who are customers of heritage language schools are second or third generation immigrants. Where else can you find these people? Are there churches, community centers, or local shopping resources that also target them? Find your customers - by way of their customers or competitors if necessary. All of the above probably have something useful to teach you about making your business succeed.
    - lazerwalker 13y ago
      How do you recommend finding a niche like "heritage language schools"?
walshemj 13y ago
Register with agencies (aka pimps) that specialize in contract work all recruitment consultancies have a contractor arm.
majc2 13y ago
You might like Alan Weiss's "Million Dollar Consulting"
- ssharp 13y ago
  Weiss is a strong advocate of value-based pricing. Instead of pricing yourself on some per-hour basis, you quote prices based on the value you provide. I think this makes a lot of sense, but Weiss is basing these ideas from management consulting, legal consulting, and other similar types of professional services. I couldn't comment on the tech market, but many companies may be unwilling to commit to this type of pricing out of irrational discomfort. I think Patio11 has advocated for longer period pricing (weekly, monthly) which might be a good medium between hourly billing and value-based. You're going to get better prices for yourself and your clients will be more comfortable with more familiar pricing. Personally, I wouldn't attempt to freelance without already establishing a real network outside of work farms like Elance / oDesk. You can still work on side projects and present at conferences while working another full-time job. You can build your presence and authority and if you do a good job, you'll get the type of industry recognition you need to get inbound requests, before you even start advertising your services.
  - napoleond 13y ago
    I haven't read Weiss, but I work as a software consultant and while it's true that clients typically expect prices in the form of a money:time ratio (and also true that it is to the consultant's benefit to use a larger unit on the time side of that ratio) the only way to get paid the sort of wages Patrick talks about is to anchor that money:time ratio against value. In other words, the pitch is "I think I can generate $SIX_FIGURES of additional revenue for you over the next year with a project that will take my team $SINGLE_DIGIT weeks. It will cost you $FIVE_FIGURES." So the invoice will probably have a line item that includes units of time with a large price tag attached, but the sales conversation did not revolve around that ratio. (I want to include the unsolicited caveat that none of this is easy. A less experienced version of myself might have/did read someone else's version of this comment and thought "I should be a software consultant! Thousands of dollars a week! Wow!" when the reality is that you still need people to sell to, you still need to be able to deliver on your promises, and you probably need to offer some level of support and maintenance for whatever you end up developing for your clients. I really enjoy this line of work, far more than a "real job", but it's much more stressful at times and so far--one year in--I'm making less money than I otherwise would be. It's true that the potential upside is greater, but I don't recommend getting into consulting for that reason unless you already have a significant personal network of prospective clients.)
rmcastil 13y ago
Referrals is a big way to make the switch. You want to do such an awesome job for a client on Elance that they'll want to hire you. The best way to do this is to figure out a clients return on investment when hiring you. If they're hiring you for a contract worth $10,000 is the work you're doing going to make them at least $10,000? Is the work you're doing for them going to streamline a pain in their business that's worth $10,000 to solve?
wikwocket 13y ago
At the risk of preempting another great reply from Patrick here, let me link a prior related comment he made, on demonstrating value to "real clients" as you put it, and some approaches to finding them: https://news.ycombinator.com/item?id=6391277 https://news.ycombinator.com/item?id=6391277 Here is an example. A local lawyer in my community is always holding seminars at local libraries on things like taxes, writing a will, estate planning, etc. These are free informational seminars, so the libraries and village halls basically do the advertising for him. During the seminars, he gives an overview of the topic, and why you might want a lawyer to help with the trickier bits. Now, when some self-selected interested people decide they want a lawyer to help write their will, who is the first person you think they'll call? Maybe the nice helpful clearly-well-informed and capable guy who gives all that free advice at the library? When you see a free online webinar for a technology topic, this is often what is going on. It's just formalized networking: meeting people interested in X, demonstrating you can provide services Y related to X, and making it known that you do Y for X all the time, and boy is it effective.
mekarpeles 13y ago
Consider creative ways of finding fellow freelancers and partner with them to share relevant opportunities. Ideally, partner with people you respect as being equally smart and driven. We are often judged by our friends.

rmcastil 13y ago

> 3 weeks without a paycheck isn't exceptional in freelancing, at all. I agree 100% with everything patio11 had to say. There is real fear involved when you have these low periods. Just because you're overwhelmed with work now doesn't mean you will be four months from now. But you should definitely celebrate the fact that you've proved to yourself you can get clients to pay you! I don't think your only options are to quit your job ASAP or wait for 6 months. Instead what I'd suggest is redirecting all your extra freelancing income to a savings account (bonus points if its an account opened up for your business). Save enough to make yourself feel comfortable with the idea of a contract potentially dropping out of nowhere and not being able to find work for three weeks. Once you hit that amount in savings reevaluate. Are you still getting enough work? Are your past clients going to give you great word of mouth referrals (which is one way to switch off of Elance)? The big thing is you don't want your emotions to control your business decisions. I actually wrote a whole blog post on 'How Savings Impact Freelancing' http://challengeacceptedhq.com/how-savings-impact-freelancing/ http://challengeacceptedhq.com/how-savings-impact-freelancin... Good luck and congratulations!

JanezStupar 13y ago

I view 3 weeks without work as a feature, not as a problem. Also it is quite possible to earn a professional wage on Elance. There are people willing to pay serious money to serious people on Elance. But I believe that a freelance should always keep at least six months of living expenses worth of funds in liquid assets.

pathy 13y ago
> I view 3 weeks without work as a feature, not as a problem. 3 weeks without work can mean real cash issues, especially for those who are just starting out in freelancing. It may be nice to have a three week break but let's be honest, most would be terrified and be frantically hunting for work. Hardly a feature. >But I believe that a freelance should always keep at least six months of living expenses worth of funds in liquid assets. But if you have a six month emergency fund, then it may be a feature I guess ;). Many do not though.
- nbouscal 13y ago
  If you don't have a six month emergency fund, regardless of whether or not you're a freelancer, one of your top priorities should be building a six month emergency fund.
  - pjungwir 13y ago
    I strongly agree with this. I freelance, and having the savings to cover slow periods is not just reassuring, it also helps me advance professionally. I feel safe passing on bad clients and insisting on my rate, because I'm not living check-to-check. I'm not saying you should keep your day job until you have a full 6 months, but you should have something, and you should aggressively save until you've reached 6 (or more). I also like to have one big (20 hours/week) project at a time, along with a bunch of smaller long-term relationships that bring in steady low-volume work. That means even if you're between big projects, you still have some work and some income. I don't think I've gone 3 weeks with truly zero work since I started freelancing.
- pessimizer 13y ago

drdeadringer 13y ago

> start sourcing them from clients who pay professional wages for professional work Besides throwing a dart and cold-calling where it lands, what other "how" is there to this?