How to run a small consultancy / freelancing business(jacquesmattheij.com)
jacquesmattheij.com
How to run a small consultancy / freelancing business
http://jacquesmattheij.com/be-consultant
17 comments
My lesson: Price even the jobs you love.
I have lost time and money not to mention potential references, after I have accepted to do some very cool hacking projects for nothing. One was a university Open Source project; the project lead could have easily got me a budget, not to mention an office, but the prospect of working with a top-tier university and "potentially" breaking into a very sexy part of computing (bio hacking) made me volunteer to do it for free. I became lead, they hired juniors and the employees got flown out to the research center and conferences while I had to scrape by staying late at night at a local university, Xeroxing research papers and catching up with a fast moving industry with no one by my side, and on my own dime.
You could be curing AIDS in your basement, and unless you're affiliated with an institution, no academic jerkwad will answer your questions, I found out. Even bio grad students would ask me who I was with and what I was doing, but quickly became annoyed when I said I was an amateur volunteer .. regardless of how much knowledge I have displayed.
I blew that one up, big time.
If you love something and want to became better at it, don't hesitate to get paid for it as well. Sometimes a pay check stub makes all the difference between whether someone takes your experience in this seriously or not.
I have lost time and money not to mention potential references, after I have accepted to do some very cool hacking projects for nothing. One was a university Open Source project; the project lead could have easily got me a budget, not to mention an office, but the prospect of working with a top-tier university and "potentially" breaking into a very sexy part of computing (bio hacking) made me volunteer to do it for free. I became lead, they hired juniors and the employees got flown out to the research center and conferences while I had to scrape by staying late at night at a local university, Xeroxing research papers and catching up with a fast moving industry with no one by my side, and on my own dime.
You could be curing AIDS in your basement, and unless you're affiliated with an institution, no academic jerkwad will answer your questions, I found out. Even bio grad students would ask me who I was with and what I was doing, but quickly became annoyed when I said I was an amateur volunteer .. regardless of how much knowledge I have displayed.
I blew that one up, big time.
If you love something and want to became better at it, don't hesitate to get paid for it as well. Sometimes a pay check stub makes all the difference between whether someone takes your experience in this seriously or not.
Price communicates value.
I could tell you some fun stories about charitably translating Japanese to English.
(We know the "document" isn't quite ready and is mostly actually handwritten in the margins -- feel free to rewrite the parts that don't flow right. Oh, and despite the fact that its on a technical field you're not expert in, we don't have time to answer your questions about the intricacies of steel smelting. But we need it done tomorrow, at the latest.)
I have never, ever had that sort of problem when somebody was paying $100 an hour for the work.
I could tell you some fun stories about charitably translating Japanese to English.
(We know the "document" isn't quite ready and is mostly actually handwritten in the margins -- feel free to rewrite the parts that don't flow right. Oh, and despite the fact that its on a technical field you're not expert in, we don't have time to answer your questions about the intricacies of steel smelting. But we need it done tomorrow, at the latest.)
I have never, ever had that sort of problem when somebody was paying $100 an hour for the work.
That's the reason why I do not do freebies anymore, unless they're very small, for companies that I do other work for as well, and I see them as part of the service.
As soon as someone wants more than 2 hours of my work the meter is running. It helps to separate the real customers from the 'users', and I don't mean 'users' as in end users, I mean it in the sense of people using other people.
As soon as someone wants more than 2 hours of my work the meter is running. It helps to separate the real customers from the 'users', and I don't mean 'users' as in end users, I mean it in the sense of people using other people.
Don't know how many fans of Mad Men are here, but a recent episode had Don Draper going to see Conrad Hilton, and Hilton ends up pushing Draper to to do some freebie ad work right there.
Draper clearly wants to do business with Hilton, but tells him, "I think you wouldn't be in the Presidential Suite if you worked for free."
Draper clearly wants to do business with Hilton, but tells him, "I think you wouldn't be in the Presidential Suite if you worked for free."
Here's what I've learned, for the case of dealing with small jobs for small clients (which in my experience is a very "long tail" of contracting jobs):
1. Have an hourly rate, but make an estimate for all jobs and make the price fixed based on that. Feel free to overestimate in this part; just make sure that you can come up with a solid number. For example, "10 hours, that means you owe me $1000." This will be the fixed price for the job.
2. Tell them that if your estimate goes horribly wrong and it turns out that the job is vastly more complex than you thought (but you couldn't know ahead of time), they owe you nothing if they decide to stop the job at that point. If they want to continue, of course, they can pay you more based on a new estimate.
In my experience the primary problem with small clients is that to them, $1000 or $2000 is really big money; they feel very worried about signing it over to you for dubious gain. So it's very important to make sure that they feel that they are guaranteed to get the return they were promised. And 2) almost never actually happens in reality; it's just an important step to making them feel comfortable with hiring you.
Another reason to go with smaller clients is that it's easier to get a job and there's less overhead; instead of dealing with a huge corporate bureaucracy you can often just get on Skype, discuss what you need, sign an agreement, and start working within an hour or two.
1. Have an hourly rate, but make an estimate for all jobs and make the price fixed based on that. Feel free to overestimate in this part; just make sure that you can come up with a solid number. For example, "10 hours, that means you owe me $1000." This will be the fixed price for the job.
2. Tell them that if your estimate goes horribly wrong and it turns out that the job is vastly more complex than you thought (but you couldn't know ahead of time), they owe you nothing if they decide to stop the job at that point. If they want to continue, of course, they can pay you more based on a new estimate.
In my experience the primary problem with small clients is that to them, $1000 or $2000 is really big money; they feel very worried about signing it over to you for dubious gain. So it's very important to make sure that they feel that they are guaranteed to get the return they were promised. And 2) almost never actually happens in reality; it's just an important step to making them feel comfortable with hiring you.
Another reason to go with smaller clients is that it's easier to get a job and there's less overhead; instead of dealing with a huge corporate bureaucracy you can often just get on Skype, discuss what you need, sign an agreement, and start working within an hour or two.
> Tell them that if your estimate goes horribly wrong and it turns out that the job is vastly more complex than you thought (but you couldn't know ahead of time), they owe you nothing if they decide to stop the job at that point. If they want to continue, of course, they can pay you more based on a new estimate.
I do it exactly like that, it's a good rule.
It gives people certainty, and it's not only the small customers that like it.
I do it exactly like that, it's a good rule.
It gives people certainty, and it's not only the small customers that like it.
Also, if you build this into your contract it gives you an out. I've known too many people who were perfectly willing to sign up for a fixed payment job, thinking they were overestimating, only to find out that the specs were too vague or there was too much rewriting such that it took more than twice as long as expected.
This sounds like a nice compromise.
This sounds like a nice compromise.
Can you clarify a little on #2? Have you been paid up to the point at which they decide to stop the job or you don't get paid for any of your time?
Along those same lines, how do you handle invoicing? Do you take any up-front payment? Bill weekly? One lump sum at the end of the job? Thanks.
Along those same lines, how do you handle invoicing? Do you take any up-front payment? Bill weekly? One lump sum at the end of the job? Thanks.
If you don't complete the task, you don't get paid, plain and simple. You get paid for deliverables, not for work.
For invoicing, I just bill at the end of each job--exceptions occur when the client isn't someone that I would necessarily trust off the bat to do this.
For invoicing, I just bill at the end of each job--exceptions occur when the client isn't someone that I would necessarily trust off the bat to do this.
Thanks
This is a great writeup, very thorough. Experience/knowledge aspects aside, professionalism seemed to be the common trait that separates the <$100k from the >$100k consultants. If you're easy to work with, communicative, and responsive — you'll never have a problem finding work. Self discipline seems the big barrier for a lot of people, and after awhile the work-from-home gets lonely.
I don't think estimating is voodoo except at the very start. Log your hours on every project (don't burden yourself, round to the :15). You can't manage what you don't measure; this includes client expectations in regard to project scope / fees. This is where the ad industry has it right, creatives have been beaten down by clients since the dawn of advertising. We're talking centuries of abuse. :)
I usually bucket hours into 3-5 categories per estimate/proposal: client service (meeting/phone calls/etc), consulting, creative, technical, and production. Each valued at their own hourly rate. ($80, $200, $150, $150, $100 respectively). Every proposal has a high-level budget that is approved by the client. When it comes to invoicing however, we bill to-the-hour and aim to invoice 5-10% less than the soft bid if they are a good client. Billing by the hour makes the client much more conscious of feedback and "design by committee".
This works for us, we have pretty good margins when it comes to service related work without getting killed by client demands, paperwork, or tedious processes.
I don't think estimating is voodoo except at the very start. Log your hours on every project (don't burden yourself, round to the :15). You can't manage what you don't measure; this includes client expectations in regard to project scope / fees. This is where the ad industry has it right, creatives have been beaten down by clients since the dawn of advertising. We're talking centuries of abuse. :)
I usually bucket hours into 3-5 categories per estimate/proposal: client service (meeting/phone calls/etc), consulting, creative, technical, and production. Each valued at their own hourly rate. ($80, $200, $150, $150, $100 respectively). Every proposal has a high-level budget that is approved by the client. When it comes to invoicing however, we bill to-the-hour and aim to invoice 5-10% less than the soft bid if they are a good client. Billing by the hour makes the client much more conscious of feedback and "design by committee".
This works for us, we have pretty good margins when it comes to service related work without getting killed by client demands, paperwork, or tedious processes.
I liked it. Another good one:
http://www.gyford.com/phil/writing/2006/10/26/a_beginners_gu...
The only thing that jumped out at me about Jacques guide was the insurance section. In the US, plan on acquiring liability insurance, and plan on that process annoying the shit out of you. If you work for clients of any real size, it will inevitably be a requirement at some point. You don't want to be scrambling for it at the last minute.
Also, I disagree with the recommendation of lowballing your prices to start. The cardinal rule of selling things to businesses: they're not spending their own money. Pricing is more about sending signals in corp-corp transactions than it is about utility or pain or emotions. When you come in at 60% of the prevailing rate, you're sending a dubious signal.
"Gift to HN" was very smart marketing, jacques.
http://www.gyford.com/phil/writing/2006/10/26/a_beginners_gu...
The only thing that jumped out at me about Jacques guide was the insurance section. In the US, plan on acquiring liability insurance, and plan on that process annoying the shit out of you. If you work for clients of any real size, it will inevitably be a requirement at some point. You don't want to be scrambling for it at the last minute.
Also, I disagree with the recommendation of lowballing your prices to start. The cardinal rule of selling things to businesses: they're not spending their own money. Pricing is more about sending signals in corp-corp transactions than it is about utility or pain or emotions. When you come in at 60% of the prevailing rate, you're sending a dubious signal.
"Gift to HN" was very smart marketing, jacques.
Hey there Thomas,
I've taken your bit and amended the page (hope that's ok).
http://jacquesmattheij.com/be-consultant/pricing
I agree with you in general that lowballing is bad when done categorically, but for a starter-upper it can help to get off the ground quickly, shifting to a higher hourly rate within several months. The problem I see here is that when you're new you have to somehow overcome the lack of reputation, and one tool you have in this respect is price.
Thanks for the critique, it's much appreciated.
As for the smart marketing bit, I asked if it would be ok to post this on HN and got the suggestion to post it elsewhere and link it here, because of the length of the post, it really was written for the express purpose of helping out those that are either wondering about starting their own business or that are already operating one. The basic idea was that if it saves a few people some headache that it is already worth doing.
Originally it was one huge page but I figured I'd better split it up a bit to make it more maintainable.
The purpose of the poll I posted a while ago about peoples employment status, was to find out how many people would be interested in something like this.
I've taken your bit and amended the page (hope that's ok).
http://jacquesmattheij.com/be-consultant/pricing
I agree with you in general that lowballing is bad when done categorically, but for a starter-upper it can help to get off the ground quickly, shifting to a higher hourly rate within several months. The problem I see here is that when you're new you have to somehow overcome the lack of reputation, and one tool you have in this respect is price.
Thanks for the critique, it's much appreciated.
As for the smart marketing bit, I asked if it would be ok to post this on HN and got the suggestion to post it elsewhere and link it here, because of the length of the post, it really was written for the express purpose of helping out those that are either wondering about starting their own business or that are already operating one. The basic idea was that if it saves a few people some headache that it is already worth doing.
Originally it was one huge page but I figured I'd better split it up a bit to make it more maintainable.
The purpose of the poll I posted a while ago about peoples employment status, was to find out how many people would be interested in something like this.
Here's another great reason not to lower your rate:
If your client base is large companies, all of which have professional purchasing departments, you will never get your rate back. Rate hike discussions are zero-sum negotiations in which either you continue working at your original rate or the purchaser takes a job performance hit. It may be easier to acquire new customers at a higher rate than it will be to jack the rate up on an existing customer. And eventually, you're going to run across clients you really want, under competitive RFP situations, where they'll demand "most favored" rates --- so that 60% "entry" rate is now your permanent negotiating floor, no matter where your industry goes.
Discount with project scope, or with deliverable depth, or with long-term support, or with scheduling flexibility. Some of these non-financial perks are more valuable to your clients than the monopoly money they're spending out of IT budget --- all the more reason not to send an "amateur" signal with a below-market rate. Don't discount with rate if you can possibly avoid it.
If your client base is large companies, all of which have professional purchasing departments, you will never get your rate back. Rate hike discussions are zero-sum negotiations in which either you continue working at your original rate or the purchaser takes a job performance hit. It may be easier to acquire new customers at a higher rate than it will be to jack the rate up on an existing customer. And eventually, you're going to run across clients you really want, under competitive RFP situations, where they'll demand "most favored" rates --- so that 60% "entry" rate is now your permanent negotiating floor, no matter where your industry goes.
Discount with project scope, or with deliverable depth, or with long-term support, or with scheduling flexibility. Some of these non-financial perks are more valuable to your clients than the monopoly money they're spending out of IT budget --- all the more reason not to send an "amateur" signal with a below-market rate. Don't discount with rate if you can possibly avoid it.
This is why it's sometimes better to go free than charge a low price.
One arts group site in particular I transitioned to a CMS, redesigned, did training with several members, implemented dynamic galleries, ... that would have been way beyond their means to pay; instead they pay me for hosting (a pittance!) and I get to support an arts group that create some great inspirational work.
If I low ball it and charge them then the publicity is "this guy is really cheap" and there'd be no way to live on what I'd earn from that. As it is I get to charge a normal rate and the arts group get to tell everyone how generous I am!
One arts group site in particular I transitioned to a CMS, redesigned, did training with several members, implemented dynamic galleries, ... that would have been way beyond their means to pay; instead they pay me for hosting (a pittance!) and I get to support an arts group that create some great inspirational work.
If I low ball it and charge them then the publicity is "this guy is really cheap" and there'd be no way to live on what I'd earn from that. As it is I get to charge a normal rate and the arts group get to tell everyone how generous I am!
Arts is a tricky area. I started out on the bridge between arts and software and I've learned that that is charity work.
I agree with you that if you want to do that sort of thing it is better to charge nothing. The 'lowballing' I had in mind was more of an incentive to pick you over a contender with an established reputation.
I agree with you that if you want to do that sort of thing it is better to charge nothing. The 'lowballing' I had in mind was more of an incentive to pick you over a contender with an established reputation.
It finally happened, I agree with you entirely, though I'm sure we can find something here to argue about - erm, web design isn't art .. discuss.
I'd see if you could get them to provide you some free advertising in return for your goodwill. Good word-of-mouth advertising is worth it's weight in gold.
Same goes for releasing open source software.
Again, good points! But you really have to keep in mind that there are more size customers out there than 'large companies', plenty of companies that require IT services are in the medium bracket (say 10 to 100 employees).
They're also usually quite price conscious, especially in the current climate. Even the bigger ones are looking at their budgets with a pretty sharp eye.
(depending on the market you're active in), you can wonder though, do you want or not want the customers that are shopping around based on price only ?
Food for thought.
They're also usually quite price conscious, especially in the current climate. Even the bigger ones are looking at their budgets with a pretty sharp eye.
(depending on the market you're active in), you can wonder though, do you want or not want the customers that are shopping around based on price only ?
Food for thought.
There is a big difference between your consulting rate and the cost to a customer to get job X done. I'm not saying a scheduling system for your local dentists office needs to be a six-figure job; I'm saying, pull the right levers to get the number where it needs to be. Specifically:
* You can make 24/7 support a line-item premium service.
* You can make support after a 2-week "acceptance" period a line-item premium service.
* You can have your basic rate include a 6-week window for delivery, at your shop's discretion, and make a more predictable delivery date a line-item premium service.
* You can have formal typeset documentation be a line-item premium service.
* You can have access to improvements and feature requests incur a full consulting dev cycle on your basic rate, and offer a line-item premium service to do point- and major- release updates for N years.
* You can staff projects with timelines that allow you to juggle 3-4 projects for different clients simultaneously (even if you do them serially, you preserve the scheduling flex to deliver them all at once), and offer a line-item premium to get a 100% or 200% improvement in time frame.
* In bare-knuckle negotiation with a client who is just being a good businessperson and determined to get the lowest rate possible, you can strip off features from their requirements, down to the minimum they could conceivably accept and still call the project a business win, and negotiate over features instead of rate.
If you do all of these things, you're rustproofing. But if you're not prepared to do any of them, your only lever is going to be your consulting rate, and the dynamics of the freelancing market are going to tend to drive your rate down over the medium term.
* You can make 24/7 support a line-item premium service.
* You can make support after a 2-week "acceptance" period a line-item premium service.
* You can have your basic rate include a 6-week window for delivery, at your shop's discretion, and make a more predictable delivery date a line-item premium service.
* You can have formal typeset documentation be a line-item premium service.
* You can have access to improvements and feature requests incur a full consulting dev cycle on your basic rate, and offer a line-item premium service to do point- and major- release updates for N years.
* You can staff projects with timelines that allow you to juggle 3-4 projects for different clients simultaneously (even if you do them serially, you preserve the scheduling flex to deliver them all at once), and offer a line-item premium to get a 100% or 200% improvement in time frame.
* In bare-knuckle negotiation with a client who is just being a good businessperson and determined to get the lowest rate possible, you can strip off features from their requirements, down to the minimum they could conceivably accept and still call the project a business win, and negotiate over features instead of rate.
If you do all of these things, you're rustproofing. But if you're not prepared to do any of them, your only lever is going to be your consulting rate, and the dynamics of the freelancing market are going to tend to drive your rate down over the medium term.
You consistently provide very logical advice in the freelancing arena, no doubt from years of experience. I would like to see your version of this book.
I am also against a low initial rate. I did this when I started, and it was a mistake. My initial low rate often attracted clients who did not value your work. These clients have tried to squeeze every penny they could out of me with technicalities and ambiguities. They tried to add "small changes" all the time that are hard to say no to since taken separately they are minor, but collectively they are not. And even after all this, they still tried to bargain and get discounts.
Once I increased my rate, people treated me more seriously and valued my work more. People who will pay more have been more okay with hourly rates and realize that additional changes will cost more.
Once I increased my rate, people treated me more seriously and valued my work more. People who will pay more have been more okay with hourly rates and realize that additional changes will cost more.
ok, that makes good sense.
The problem is that what I've written is just one guys experience, it really helps to have many perspectives on this.
The problem is that what I've written is just one guys experience, it really helps to have many perspectives on this.
Looking at getting the "minimum required" liability insurance at the moment. Neither of our first two customers want it but the people we are renting office space from do.
Any recommendations on providers?
Any recommendations on providers?
I've had great luck with http://techinsurance.com - the owner literally called me and walked me through my options, and then told me that I could probably get away with not having a "Fidelity Bond" which was the most expensive piece...
I'm using them as well -- have been happy so far. I avoided insurance altogether until a client required it. Don't get it unless you need it. You can get a policy in place fairly quickly.
Getting insurance can be a pain in the ass, and rates vary. I might argue for a middle ground: find out from your industry how likely it is you are to need insurance within 6 months, and get it ahead of time if you will.
Isn't that the thing about insurance - by the time you need it it's too late!
I know a lot of people who've gotten insurance with Techinsurance, too.
Thanks!
Nicely done. I bootstrapped a consulting business, and ended up learning many of the lessons in this guide one way or the other. (Usually the hard way.) I don't usually find much value in write-ups like this, but this one matched my experiences pretty closely.
I'd like to see two more additions: one for figuring out what size you want to be, and one for getting help. Figure out ahead of time if you want to grow to include subcontractors or, possibly, employees; it'll change how you handle your business growth.
Also, get help. A freelancer or consultant actually has to do a lot of different jobs: you have to be a salesperson, a marketing person, an office manager, a professional, etc. Probably you only wanted to be a professional. It's easy for the paperwork to start to get disorganized, it's easy to fall behind on invoicing, it's easy to completely ignore doing any marketing (which might include things like building a nice website for your business). So, get help with those things. Despite the additional cost, you'll be glad you did.
I'd like to see two more additions: one for figuring out what size you want to be, and one for getting help. Figure out ahead of time if you want to grow to include subcontractors or, possibly, employees; it'll change how you handle your business growth.
Also, get help. A freelancer or consultant actually has to do a lot of different jobs: you have to be a salesperson, a marketing person, an office manager, a professional, etc. Probably you only wanted to be a professional. It's easy for the paperwork to start to get disorganized, it's easy to fall behind on invoicing, it's easy to completely ignore doing any marketing (which might include things like building a nice website for your business). So, get help with those things. Despite the additional cost, you'll be glad you did.
The title of the document is not correct English.
Instead of "To Be a Consultant, a freelancer or an independent contractor", I would change it to something like, "How To Be a Consultant, Freelancer or Independent Contractor".
Instead of "To Be a Consultant, a freelancer or an independent contractor", I would change it to something like, "How To Be a Consultant, Freelancer or Independent Contractor".
I'll join the chorus and say that this is great stuff, jacquesm.
Estimation is one thing that makes me very nervous to the point of not wanting to start my own thing. I have always underestimated things (and once it got very bad when I was doing contract work). If you could expand on tips here (such as what to avoid - i.e. don't switch to a new programming language before starting work), it would be much appreciated.
Estimation is one thing that makes me very nervous to the point of not wanting to start my own thing. I have always underestimated things (and once it got very bad when I was doing contract work). If you could expand on tips here (such as what to avoid - i.e. don't switch to a new programming language before starting work), it would be much appreciated.
Here's my rule for estimating time: figure out how long it should take and multiply that by 3.
This has worked out to be in the right area about 80% of the time. I have one particular client where I bumped the multiplier up to 4 because of how often they ask for major changes halfway through the work.
This has worked out to be in the right area about 80% of the time. I have one particular client where I bumped the multiplier up to 4 because of how often they ask for major changes halfway through the work.
Ok, to make good on my promise, I've amended the estimating page, it is about 3 times the original length now.
Probably the way I'm going to continue this project is to flesh it out slowly and to continue to subjects that deserve a page by themselves.
I hope the additions are useful to you, you can find them here:
http://jacquesmattheij.com/be-consultant/estimating
Probably the way I'm going to continue this project is to flesh it out slowly and to continue to subjects that deserve a page by themselves.
I hope the additions are useful to you, you can find them here:
http://jacquesmattheij.com/be-consultant/estimating
Where does it tell you how to get customers? I always saw that as the biggest obstacle.
Where does it tell you how to get customers?
You may be a programmer now, but once you start your own business, you are now a businessperson first, and a programmer second. This is a critical change of state that you must make. Like almost everything else, you shouldn't count on anyone telling you anything. You are no longer someone's employee. You must initiate the finding of all "how to's".
You are correct in believing this is the biggest obstacle. Without customers, you are dead. With them, you can solve almost any problem you have.
As far as getting them, you can (and should) try just about anything. Some of my experiences:
http://news.ycombinator.com/item?id=182489
You may be a programmer now, but once you start your own business, you are now a businessperson first, and a programmer second. This is a critical change of state that you must make. Like almost everything else, you shouldn't count on anyone telling you anything. You are no longer someone's employee. You must initiate the finding of all "how to's".
You are correct in believing this is the biggest obstacle. Without customers, you are dead. With them, you can solve almost any problem you have.
As far as getting them, you can (and should) try just about anything. Some of my experiences:
http://news.ycombinator.com/item?id=182489
Wow, the responses went way off map on that thread ;)
All my computer work, including job-type jobs I've held, have all come through networking. But that's really just a truism I guess, in that all work will/must come from networking. Which I take as your point...
What's interesting to me is the way one's personal network, seems to grow; like the facts of networking are stranger than fiction in an organic "Connections (BBC)" sorta way.
(Been watching old connections episodes on my G1 off youtube, while the inet is out at my house. Great show.)
All my computer work, including job-type jobs I've held, have all come through networking. But that's really just a truism I guess, in that all work will/must come from networking. Which I take as your point...
What's interesting to me is the way one's personal network, seems to grow; like the facts of networking are stranger than fiction in an organic "Connections (BBC)" sorta way.
(Been watching old connections episodes on my G1 off youtube, while the inet is out at my house. Great show.)
ok, here is a first draft of what works for me, I'll be fleshing it out further still.
http://jacquesmattheij.com/be-consultant/finding-keeping-cus...
http://jacquesmattheij.com/be-consultant/finding-keeping-cus...
I would also add that I use LinkedIn very effectively in this area. Keeping in touch with all your past colleagues / bosses serves you well. When someone updates their status, and you see they moved to a new company/position, it may be time to ping them and see what they are up to -- perhaps they are looking to hire contract work. Time and place...
Very good. How did you decide whom to offer referral fees to? How did you decide the amount? How did you approach people with the offer?
I offer a referral fee to anybody that brings a job from a customer that I do not yet have a billing relationship with.
The amount is a fixed percentage of the invoices during the first year, 12% is my current percentage.
I spot someone that has a very fat rolodex and I tell them I'm willing to pay a referral fee.
It's quite effective.
The amount is a fixed percentage of the invoices during the first year, 12% is my current percentage.
I spot someone that has a very fat rolodex and I tell them I'm willing to pay a referral fee.
It's quite effective.
One way to get customers is through open source (for eg memcached) http://danga.com/
Hey jacques, great article! I am thinking about making this jump soon, but am wondering how to be proactive in finding customers? It's one thing to drop a line to all of your contacts saying that you are a freelancer, but how does one actively go out and find jobs?
Hey Mattiss, I've added a page for that, called 'finding and keeping customers'.
This is a great guide, and I truly thank you for posting it. I'm in the process of building my own small software business/consultancy, and one of the questions I have is how to find and keep customers. This really, really helps. Thanks!
Go to meetups. Find ways to give presentations. If there aren't appropriate meetups in your area (or the area where your target market works), start them. If you can't start a meetup, you'll probably have a hard time marketing a company anyways.
Don't talk about your service offerings at meetups and network events unless you're asked, and keep it brief. Make friends and connect re: services offline.
Don't talk about your service offerings at meetups and network events unless you're asked, and keep it brief. Make friends and connect re: services offline.
Definitely! I presented my PHP framework at a meetup a year ago, so its time to go again to give some more talks on sites I've used to build it and go from there. I also spent this weekend setting up my blog and thinking about all of the articles I want to write.
I just got my first customer, so I'm happy things are going well so far.
I just got my first customer, so I'm happy things are going well so far.
I've been working as an independent software consultant for about 5 years now. I've found the best way to get work is via past contacts. For example, if you are really good at what you do, then all of your past supervisors / colleagues know it, and when they move on to other companies / jobs, they are your best bet for getting started. This cascading effect works to your advantage as you take on more projects and meet new people.
This is the biggest question I have and it's what keeps me from venturing out there.
To me it seems like the logistics pale in comparison to getting some momentum going (like the classic college grad's dilemma of needing experience to get a job).
To me it seems like the logistics pale in comparison to getting some momentum going (like the classic college grad's dilemma of needing experience to get a job).
Great writeup. I love that you are evolving it as the HN discussion grows.
My biggest stress point has always been dealing with accounting and taxes. I realize that hiring a bookkeeper would be ideal, but as my revenue stream has had some wild fluctuations over the years I have always been a little hesitant to make the commitment. I am curious what you or the other consultants here have found to be a fair price for bookkeeping service.
My biggest stress point has always been dealing with accounting and taxes. I realize that hiring a bookkeeper would be ideal, but as my revenue stream has had some wild fluctuations over the years I have always been a little hesitant to make the commitment. I am curious what you or the other consultants here have found to be a fair price for bookkeeping service.
I pay about 500 euros annually for this, that includes my personal tax filings.
The office that does this for me has in the past also provided payroll services (when I had employees), and gives me tax advice. It's run by an elderly gentleman who knows his stuff very well and he's saved lots of money over the years.
The office that does this for me has in the past also provided payroll services (when I had employees), and gives me tax advice. It's run by an elderly gentleman who knows his stuff very well and he's saved lots of money over the years.
Man, you hit the spot with the article chain! Your advice is way better and concise than many books I've read. I second tptacek's comment about Liability Insurance. I needed it 6 months into the process. Thankfully, General Liability is all I needed, and the process wasn't so painful.
Comments on the pages are now enabled, that way if you want to critique a certain section you can do so in the most relevant spot.
This looks really great! Thanks for doing it.
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I kept coming across questions of the "Ask HN" variety that were too complicated to answer fully in the setting of HN.
I've had my own share of "Ask HN" posts answered quite generously, so here is my attempt to repay in kind. At the request of the community I've not posted this here but instead on my own site.
Hopefully this is of use to some of you, any and all criticism is of course more than welcome, I'll spend a couple of hours every week on expanding it and fixing bugs or by writing about subjects that are not covered right now.