Question for freelancers

[adavis]

The company I work for just lost the contract I'm working on to another company. I am hoping to be picked up on the new contract, but just in case I'm investigating doing freelance work. I know there are a lot of really sharp programmers out there with a lot more knowledge that I have, but I do okay. I'd like to be able to work out of my home instead of coming into an office every day.

I'm very strong in HTML and am getting stronger every day with PHP/mySQL and CSS, probably close to or slightly above intermediate level. My weakest area is JavaScript, but I'm getting better every day, probably slightly above beginner level. I know enough Perl and ASP to get by, definately beginner level, but prefer PHP. Logic wise, I started out learning Fortran in the mid 70's. My logic skills are pretty solid. I can generally figure out the logic part pretty quickly.

How does one go about becoming a freelance programmer? How do I find projects? Do I need a business license? How do I handle taxes? What is the going rate for PHP programmers? Is it customary to charge by the hour or by the project?

Answers to any or all of these questions, or any I didn't think about, would be greatly appreciated.

[AstroTeg]

I don't have enough time (holidays) to fully answer your question. If there's anything left unanswered, feel free to contact me either from my site or PM me.

As a business, you'll need to setup an entity to freelance under. You could freelance as a sole proprieter (sp?) or I prefer LLC. You're mileage will vary depending on what you feel is the best for you. This means you'll need to do a little research and maybe talk to a lawyer.

Once you setup your entity, the gov't now knows to collect taxes from you. If you're sure you're going to be like $2000 or less a year in gigs, then you probably will be ok if you don't register your entity. But don't take my word for it. What we did is tried a few gigs out under the idea of doing it as a business. As we saw the work was enjoyable and the client was happy, we decided "ok, we can do this - lets make it official" and got a tax ID.

The going rate for a coder can vary depending on the type of work, the geographical area, and the amount of money the client can afford :). All these are factors. I couldn't tell you exact numbers, but in my area the rough estimate is probably about $35hr on the low end for simple coding (HTLM, JS, some server-side scripting) and towards $90+ for coding + database work. The "hourly rate" should be used to calculate fees for your proposal. See next paragraph for details:

Billing hourly versus by project: For the type of work I do, we bill by project. We do the development off site. If we were on site, then we'd think about billing hourly. If we're on site, then the client can see if we've actually earned that hourly rate. If we're at home, how would they know we weren't watching TV for 90% of the project? So we go with a flat project fee with some catches that allow the client to add features with the understanding it will raise the fee. You really can get creative with all of this. But this seems to work out well for our clients and our clients are happy because if we get stuck, we're getting stuck on our own time.

As for getting work, word of mouth has worked well for me. In fact, almost all of our work has been word of mouth. We do a lot of people networking. I'm involved with a few clubs and that helps. We're not swamped with work, but at the same time, we're not idle either. Obviously, if we want to take it to the next level, we'll need to do some spending on marketing and advertising as well as make some schedule changes. We have some growing to do before we're ready for that.

[cruz610]

Great post, this answered a few of my own questions :) Another quick question about billing for projects. What is a fair price to charge for very complex projects that require high-level PHP and mySQL? Right now I am seeing about 1000-3000 depending on the project but some of these I KNOW are worth many multiple times that. What do you think is a fair range?

[AstroTeg]

Its a balancing act and there's no right answer as to "what price should I charge".

The only thing you can do is either:

- spend some time working for a consulting firm which is in the line of work you'd like to freelance in
- get creative and have other firms provide bids to YOU for the project (pretending you want them to do the project for your company)

Like I said, geography, the client, how valuable your time is, the client's views of your skills, or actual skills, the economy, and probably the weather will all effect what your charge. There's a lot of variables. Ideally, you want to have a fair price. A price that represents the value of your time to work on the project. And also a price that the client feels is acceptable to the work being done (if you fail to meet this, then you won't have a project at all).

This doesn't mean you go in as the lowest bidder. If you're not able to make a buck, the project isn't worth it. If you're the cheapest and you're the cheapest by a rather large number, you'll probably be dropped because the client will see you may be inexperienced or missed spec-ing the proposal properly.

There's a lot of variables involved with pricing...

[planetsim]

Yes be careful with your quotes for projects. There is apparently a formula to working out a good quote, forgot the formula as i do not use it.

However i usually just think okay this is going to take xhrs ill require at least 1/2 xhrs for testing and debugging. and ill has 3/4 of xhrs to the final total.

That should give you a good amount of time to get your project finished on time.

Than its basically times that and your hourly rate. Depending on how good you are $25-35 is a good place to start at. And get more experience in freelancing you should start to up your rate but not too much at a single time. Eventually you should get to about $80-100 an hour which is the going rate i believe for most areas.

[adavis]

I calculated out that I get about $21/hour, averaging 40 hours/weeks, 3 weeks of paid vacation, 2 weeks of sick paid leave. I figured that if I could stay busy most all the time, that I'd need to charge somewhere between $25 & 30/hour to stay even with where I am now. With 1 kid in private school and 1 in college, I need to at least meet those bills with my salary. I was in an LLC once before, but there was almost no work and we folded. At the time, all my sites were static. I didn't know how to do in internet programming. I used a Perl script with sendmail that got hacked and almost got my site kicked off the server, so I was pretty leary about internet programming for a while. I now know what I did wrong and how to stop it. I've had a lot of experience with PHP and before that hobbled along programming in Perl which I hated.:D

As far as calculating my time at work. I figure up how long I think it will take to code and triple that. If it's a big site and I have to do 508 and HTML validator on a PHP site then I definately triple my time estimate, plus some. I'm getting better at that as well. I used to think it would take 20 hours when it would really take me 80-100 by the time I tested and got everything compliant.

I just don't want to spend a bunch of money on an LLC and licenses and then not have any business.

Thanks...

[Elizabeth]

Sorry to intervene in this conversation, just wanted to add my $.02 :)

I might start out as a sole proprietorship; from what I understand, it's a lot simpler and less expensive, but the risk is that if you go under, they (the government, debtors, whomever) can come after your personal finances for payment. Whereas a LLC is literally limited in liability- so they can't take your house away from you.

You also want to be meticulous about keeping track of your business expenses, etc. The IRS loves to come after the little guy, and there are some red flags they have for picking you out for an audit. One example is if you try to write off the majority of your house payment for "business expense" - you have to measure out the square footage of your office space and apply that accordingly. I'd recommend getting some books on setting up your business from home. You will have to keep track of depreciation on your computer, fax machine- and any other office machinery you use. It's not as simple as you might think but there are some good books out there to help you.

You will also need to keep track of your income with a GREAT finance software program; not just on a napkin somewhere :) You will have to report everything at the end of the year, so you want to make it as easy on yourself as possible. Your time will literally be money, so you want to be as efficient with the overhead tasks as possible (i.e., the tasks that don't directly bring in income).

Regarding obtaining new business, this can be the hardest thing for programmers as it entails some sort of marketing/sales skills. Most of us cringe at this thought, but if you can't sell yourself and your skills then you won't get very far. If you know a lot of people in the business, you might try letting them know you're now a freelancer, and if their companies are overloaded, you can offer your services as a subcontractor. If you haven't done so, you will also want to join local programming and business groups (such as the Chamber of Commerce, Better Business Bureau, etc) for networking purposes (and I'm talking about the people type networking ) :) .

It's also a good idea to figure out what your niche will be- what makes you different than all the other programmers turned consultants/contractors out there who are doing the same thing you are? Maybe you tailor toward small businesses in your area, or one industry in particular. You have to find something that defines you and run with it.

As far as fees go, I wholeheartedly agree with adavis- a lot will depend on your geography and your clients. And while I'm a firm believer in "you get what you pay for" - remember that starting out, you can't afford to be too pricey. You have much competition and litttle clients under your belt, so until you can really prove yourself on your own, you can't be unreasonable in demanding a large fee just because you have bills to pay. Especially if your clients are smaller businesses - they won't be able to afford to pay a lot, but they can be great clients. My personal feeling is that the more efficient you are, the quicker you can get projects done and the more reasonable your costs will be.

One more thing to consider before venturing out- when you have your own business, remember you are responsible for EVERYTHING in that business. This means that if copies need to be made, it's your hiney that drives to Kinko's to make them. If the phone rings, you're the one that has to answer it. If a customer has a problem with their site, or doesn't understand something, you have to act as the customer service representative and handle inquiries diplomatically. I know this is no-brainer stuff, but sometimes programmers think their time is more valuable than doing something menial like handling customer questions or making copies... but if you don't do it, there is no one else around to.

Working at home can be great- especially if you have a family around, but it can also be tricky. The key is balance- and keeping a separate area that is just for work. It takes discipline to go to "work" (and if you're like me, to stop "work") and your family has to understand that just because you're physically there, you might not be able to be interrupted. But it's really nice to be able to set your own hours, and the commute can't be beat for sure :).

Good luck to you- hope the above helps a little, anyway.

-Elizabeth

[leatherback]

Hi,

Depending on what you have to do etcetc you get different price levels. This is what I take into account:

- the timeframe available: Will the project require you to work till around the clock, weekends, .. to get it finished: double the fee. If you cannot get it finished in the frame during working days, noboday can, and more than 1 person wil have to do the coding

- The features needed: Lot of site-specific scripting? CMS? Add a few bucks

- Add a 'per design fee': I generally design two layouts for a site, based on sites the client has shown me, and their own compagny style. If they do not like these, and they did not give any clear information on what the site should look like: Have them pay for each new design

- Keep in mind the clients organisation you work for: I have been buidling sites for basically nothing, since they are small NGO's with no money. But their partners might be your next clients!

In general I do a price-per-project quotation, for reasons mentioned earlier. I end up with 35 - 75 euro/hour exc. tax for most projects, depending on wether it is pure HTML/CSS, or PhP/MySQL/Javascript. Prices can go up if they require a very graphics-intense site. In general a basic 3 page site (For the grocery on the corner) ends up at about 300-400 euro's, whereas this big consultancy firm gets a bill of 3500 euro..

Good luck.. I do this next to a 36-hour per week (In practice 50...: PhD) job, and easily double my salary..

J.

[adavis]

Thanks for all the great feedback...

When I was in the LLC, I only pulled in 2 contracts. Both were from personal friends. One was the preacher at my church who wanted to start an online counseling site with a couple of partners, including a psychiatrist. That contract paid us for a while, but ended up folding after about a year. At first, we got great feedback and got the initial site up and going, but when it came to content for the online tests and evaulations, they because slower and slower until we were getting complaints from users and no relief from the client for better, more meaningful tests and results.

My other contract was for a wedding and party rental company. It was my very first paying job. The site was nice but static and very simple. When they wanted a revamp of the site, after the LLC had folded, I gave them a price quote. They wanted lots of programming with an online catalog and pricing where the user could get a price quote online or place an order. By that time, I was fully capable of doing the work, but with a 40 hour job and in the middle of baseball season (I have 2 boys that are really into baseball) my very realistic time estimate was too far out for them. I think I was competative with the other company on time, but I had a 6 weeks time frame and they had a 4 week, which they didn't meet, I might add. The site was completely changed and IMHO, looks like a first grader did it. Lots of muddy images and dark colors. Not light and happy like a wedding should be, but more like a 3 year old's party.:eek: Guess what ??? I just went out an looked and the site still isn't finished. I gave them that quote list May. I would definately had it completed by now. In fact, there is less information on the page now than there was when I turned it over. No online catalogue and YIKES, she did it in FrontPage. Yuck...:( The only thing that's new is that there's a pdf job application. Okay well, maybe I need to offer to come in and do the programming.

I would so much prefer to be in a group of 2 or 3 where a real artist does the graphics and maybe sketches out the layout and I take care of the programming part, which is where my talent lies. My brother and sister both are pretty good artist and I'd think about going into business with one of them, but my brother-in-law is a jerk and IMHO unethical and my brother is the STEROTYPICAL artist and VERY unreliable. He's also the typical adult ADHD and bounces from one idea the the next at a pace that I could never keep up with.

My other problem is that when I get hired by a friend to do a project, I tend to undercharge. It would be so much easier to work for people that I didn't have any emotional investment in. I set my price and expect to get paid, but finding that kind of work is pretty hard for me. I'm not very good at networking.

I'm still hoping that I'll be picked up by the new contractor and I probably have about a 90% chance of that happening. So far, everyone's pretty happy with my work and contrary to what I thought, looking around a programming jobs on monster.com and similar places, at $45K and less then 3 years experience in the web design field, I'm not doing all that bad.

[AstroTeg]

Originally posted by adavis

I would so much prefer to be in a group of 2 or 3 where a real artist does the graphics and maybe sketches out the layout and I take care of the programming part, which is where my talent lies.

I'm in the same boat. But through people networking, I've found a great graphic design guy (he does it during the day for a living and loves having odd jobs at night). We hire him as a subcontractor. He's happy because he gets easy work (and he doesn't have to go out looking for it either). We're happy because we get awesome web designs. The client's happy because they get a great product. I've found another graphics guy and although we haven't hired him as a subcontractor, we hope to get to the point where we have enough work to subcontract both of them on various projects.


Originally posted by adavis
My other problem is that when I get hired by a friend to do a project, I tend to undercharge.

This is the nature of the business. You have to look at it from a couple different angles to determine how much of a problem it really is.

- Will the work you will need to put in be completely unreasonable to the price you're asking? If so, bump the price up and clearly explain the work involved.

- If you raise the price much more, will you lose the work? And how badly do you need the work? Sometimes you have to determine if its really worth your time to take on the project and sometimes you fudge the price so you stay busy (or beef up the portfolio).

- Are there other favors involved? By going in with a low price, maybe your friend/relative can offer something in return. Even if its simply passing around business cards and recommending people to your new business. This can be gold and is the basis of people networking. We've done a couple free sites with the idea of possibly having our site address seen on ESPN or on the side of a car. I'm negotiating with a bar/club to provide them free web hosting if they promote us to bands and DJs that play there.

Its a balancing act and there's a lot of variables involved. If there's favors involved, then the price can be lower. But if you know they won't deliver those favors or its going to take a lot of work to build the site, then don't sell yourself short.

[adavis]

I went to marketingtool.com/ (http://www.marketingtool.com/) this morning and went to my state and city. There are a bunch of website designers here. About 1/4 are no longer in business, or at least their sites are gone. Most of the programming I found was in ASP (gag) and even some Access db work (gag gag). I found one company who has a job opening, though it says something about ASP. I know a little ASP, but after the structure and order or PHP and Perl, ASP is a bit to loosy goosy for me. I'm going to send in my resume and see if they need a PHP programmer. Who knows. Thanks...