Iteration Podcast

The Freelance Episode 💰

Feb 24 '20

JP's Experience

Minimal
Often saying "yes" too frequently
This year I only said yes to opportunities I could deliver on
Doing consulting work for friends.... 🤔❌
I come from a design background where I was known as the "design guy". To this day, people still ask me if I can make logos for them.

John's experience with freelance

I started Freelancing in June 2015 (Small Rails work)
The last 5 years I've built it into a small agency
We did over $350k last year
I've been able to travel, have flexible hours, and pick and choose projects and learning.

Pros of freelancing

Extra cash (on the side)
Flexibility
Lot of different projects
Less politics
You have the power to negotiate and capture your full value with no lost efficiency or politics at play.

Cons of freelance

No paid time off
No benefits
No growth opportunities - You have to be a self-starter
Taxes, paperwork business development
Sometimes you get boring projects
Loneliness
Hard to find work at first
You have to be paid less than you are worth. That’s capitalism. There has to be a gap between what you cost and the value you provide.
Moving from project to project gets hard. You need to be sure you really like / want shallow variety.

You need to pick a skill/stack/specialty.
Make sure you have someone out there who’s paying people for it.
People need to understand what you do and who you do it for.
“I build Wordpress sites for dentists”
“I do Ruby on Rails for medical startups”
It positions you as a specialist. Specialists have more authority, less competition and make more money.

Free or discounted work for Nonprofits
Upwork / Thumbtack / Craigslist
Portfolio work that's as close to a real project as possible
Equity work for startups
Open source
Blogging (my top 2 biggest clients were from my blog)
This season shouldn’t last for more than a year. If it does, you may want to consider a "joby job"

Raise your rate by at least 20% or so every estimate until your rejection rate is over half.
If you are landing every bid, it’s a bad sign. You are too cheap.
JP's Formula = Hourly rate at his "joby job" ~ $50/hr — double it or triple it

Milestone payments
Understand the business enough to get a sense of the potential value you can provide.
Ask lots of questions to really understand their business. Skim books, YouTube anything to be able to speak intelligently about their business needs.
Once you quantify the outcome:
- “You make $300k a year from your website leads now, you think my work could improve that by 20%. That’s $60,000. My services are just an investment of $12,000 that you’ve estimated will give you a return of $60k in your first year”
- So instead of charging $2k for that static marketing site, you can be confident in charging $12,000 - it’s a small investment for the returns the client says they should get. It’s a deal.
Charge more.
- By pricing yourself “competitively,” you inadvertently signal to them that you’re “average” — and great clients, by definition, aren’t looking for average.
It takes time.
My average client lead to close has been about 2-3 months in the last 3 years. The average client revenue has been over $50k per client.

Pre-pay is the way I was doing it. Discounts for higher chunks of hours. This worked really well for ongoing development and maintence contracts.

it’s a numbers game. This is false! Don’t spray 300 people with a cold email and no context. I get these constantly. Spend 3 hours researching 3 clients you can offer value too. Build a relationship, be a resource, it takes time.
Provide a ton of value at a sustainable but low wage.
Selling outcomes you don’t fully control. Example: I want this rich interactive functionality on a square space site that I can’t give you admin access for. Not having copy, not having design assets, domain access. Etc.
Fixed price billing with a lack of scope.
Growing to quickly
Having a closed mind to unknown domains.