Extracted Page: https://news.ycombinator.com/item?id=7311297

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.

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?

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

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.

(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.

The preferred method for reducing freelance workload is to raise your rate. Keep raising it until just the good clients are left. When workload starts increasing again, raise your rates again.

Keep the job until you're billing at 3-4 times your salary, and routinely outpacing your paycheck with what you bring in on nights and weekends.

And stop calling yourself a freelancer. That'll double your bill rate in one step.

Is there really much difference between freelancing and a job? In both cases you need (should) be building your personal brand and networking with people. I have bounced between jobs and freelancing. I see them all as my clients. The only difference is in how taxes are done and expectations.

Maybe tell your employer that you are taking other projects and offer to stay on to do certain projects as a contractor, but at your freelance rate.

There are a ton of threads on Hacker News on freelancing. I suggest you do some heavy searching. There are some real gems.

Edit: The great thing about freelancing is that you can always fall back to regular employment. As your pool of contacts gets deeper, you begin to feel like you could never really be without work.

"Is there really much difference between freelancing and a job?"

Yes. I had many jobs and now freelance. For me, freelance is a business. A job is a job. Your employer expects you to be working 9-5 (regular hours) and they can pretty much dictate when I have to have meetings and many other things.

As a freelancer, I decide when it's convenient for me to hav e a meeting for instance. My clients don't really have any power over me because they understand that we are both businesses.

> Yes. I had many jobs and now freelance. For me, freelance is a business. A job is a job. Your employer expects you to be working 9-5 (regular hours) and they can pretty much dictate when I have to have meetings and many other things.

> As a freelancer, I decide when it's convenient for me to hav e a meeting for instance. My clients don't really have any power over me because they understand that we are both businesses.

Right, that's expectations. You set expectations when you start, job or freelancing. If you work full time, you set that expectation. If it's part time, that's a different expectation. You might even work part time from home and part time from the office. Maybe all that matters is that you are getting projects done in a certain time-frame.

It also depends on the model you are working. In some cases I might be on a model where you have a daily or weekly rate. If I'm doing that, then my time belongs to the client for that period. If the client wants me to be in a meeting at X time, no problem.

I also generally give the client a period of time on which I will be working on the project and available to talk. Generally I try to adapt to what's good for the client rather than what's convenient for me. As a full time freelancer, there is no convenience for me. If I'm on my working hours, I'm usually available to someone.

There are times where I like to be working without distractions, but availability goes both ways. If I need to ask questions then I want an understanding of when I'm available and when the client is available.

Everyone who is employed full time should be treating themselves as a business. You should be marketing yourself, always. You should be building networks, always. You should strategize for the future, always.

I'm always tweaking and trying out different things though. Everyone has their own way. Mine certainly isn't the best. It's just another way. I'm still (and always) in training.

> But the three week (zero-work) period was a scary phase.

That is freelancing, more-or-less. It's one reason you can get so much more than being an employee - you cover taxes, insurance (including professional indemnity), pension plan, sickness, times "on the bench", etc. Doesn't suit everyone. I always live well within my means and keep as much money in the bank as possible. That will cover me for a few months if I lose my current big contract.

Like everyone else here, I would be interested in what you are doing right on Elance.

This is the key to the whole post in my eyes. At first you get one gig, then can't get any gigs, and then get flooded with work after making one change. It seems that the change might have been a significant event.

Based on the dates given, the calendar might also be somewhat responsible. The first couple weeks of the year are not very active in the hiring market.

Stay with your job for one year more and be more selective in freelancing. In the meanwhile just 2 kinds of jobs:

- The ones that can improve your knowledge / portfolio

- The ones that pay VERY well.

In this case you will increase your freelance experience and have enough time to decide what to do.

I have two words (statements) of advice for you:

1) Don't quit your job unless you have 6 months worth of living costs in savings.

2) When you're about to quit (depending on your job), you can talk to your boss about "potential new prospects" and "exploring the next steps in your career" - if he is a sensible, long-term thinking and ego-less person, and you're a good, valuable worker, he would probably want to keep on good terms with you, and the doors of this company might stay open for you even if, after 6 months or so, your alternative career plan does not work out.

And it then takes you another month to get your first paycheck.

And what if that job doesn't want you to start for 2 weeks? Or more because they're doing a full background check?

And say freelancing's going great, but then your first client isn't as great as you thought and starts quibbling over the bill? Or they take 4 months to pay you because finance never received the PO or finance never got a copy of the invoice or finance only begins processing the invoice when it gets chased (which is finance speak for "we're complete bastards who always pay much later than the agreed payment terms, ha ha ha, fuck you")?

It depends on your commitments. If you can move back in with Mum & Dad or can couch surf a bit, then 6 months is perhaps unnecessarily careful.

When you've got a mortgage and life baggage, probably not.

That size of an emergency fund is worth having not just for dips in work but also for relocation costs (if he ever wants to move), breaks from work to focus on new skills / further education, or even big emergencies.

All of these things have happened to me and my emergency fund was there to catch me everytime.

It's called an emergency fund for a reason - as a freelancer / consultant you should be putting away even more than the average worker because your income may swing like that.

For you, I would keep 6 months of living expenses in a savings account that is difficult to get to (I keep mine in a local credit union and don't have a debit card for it so I have to physically go in to withdraw which helps curb impulsive purchasing).

Definitely go the contractor route - it is better pay. Also realize, though, that it's about more than just your programming skills. As a contractor people will pay you well to solve problems. Keep your skills fresh even if it means a little extra effort and some mistakes, you will be better off in the end (I am).

The one thing I like so much about Brennan's writing is the focus on win-win and quality, professional attributes I was very fond of already but "Double Your Freelancing Rate" helped me tremendously to actually implement the measures needed and to internalize what it means to become the consulter I wanted to become - so I guess I second those recommendations :)

Next goal, recurring revenue!

If you can get hired when taking into account the risk of having 3 weeks of no work, then you should take the freelancing role.

So look at the ratio of time you spent without work so far, to the amount of work you have on the books now.

Build in a bit of a "factor of safety" (I work on the basis that I can keep myself billable about 60% of the time, but you might choose less or more).

If the rate your charging is sufficient that you can work only 60% of the time (or whatever you choose) and still make better money than your current job (or that the money isn't better but there is some other advantage like flexible living arrangements that may allow you a cost saving by being able to, for example, relocate to a cheaper location) then go for it.

Just factor the risk into your hourly rate, and see if it works out. Of course your "risk assessment" may be completely inaccurate, which I guess is the real risk ;)

> Then, something happened after I changed my profile. Since Jan 30th I have been flooded with work.

I'm very interested to know what is this change? I've just checked your elance profile, but I couldn't know what is it.

It depends on your situation. Personally, I wouldn't give a bird in the hand for two in the bush.

Do you have a family, loans?

Do you have at least 6 months worth of living expenses?

Can you quickly find a job if things don't go as expected with your freelancing jobs?

You should consider these things first.

Freelance or job? | Hacker News

Freelance or job? | Hacker News

Extracted Page: https://news.ycombinator.com/item?id=7311297

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