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Article ||||||||||||||| Freelancing
in a Web World So
you finally gave into the siren call of freelancing
("I want to work when and only when I feel like
it! I want to earn insane hourly rates! No more ruts,
no more office politics! I'm going solo. ["Born
Free" swells, fade out]). That, or your head rolled
in the latest round of layoffs. Or maybe your company
folded altogether. Whichever way you managed to exit Dodge, you now find yourself unencumbered by a salaried position. And instead of looking for a new job, you're pulling a free-bird. You've printed your own business cards, buffed up that e-résumé and e-portfolio, and you're ready to start lining up those clients. But
are you sure, quite sure, that you're right for the
job (or lack thereof)? You may have been burned, or
just burned out, by full-time employment, but are you
positive that you're ready to give up the relative comfort
and security of a "real" job? Like oh-so many
things in life, freelancing comes with its own list
of pros and cons. So before you totally break up with
the concept of a steady job, let's make sure you're
freelance material. Are You Freelancer Material? To
live the freelance life is to live a life of uncertainty.
Not knowing when or from where your next paycheck is
coming requires a certain mind-set that not everyone
possesses. Some may argue that with so many companies
struggling just to keep their heads above water now
that the bang is out of the Big Web Boom, full-time
work is no more secure than the freelance lifestyle.
But before you unplug that feeding tube once and for
all, ask yourself if you really have what it takes:
Many people fantasize that the freelance existence is a life of luxury, one where you can set your own hours (read: play late, sleep late) and take time off whenever you feel like it ("Ah, the Bahamas are lovely this time of year!"). In reality, however, it's difficult to enjoy the feast when you should be planning for famine. The perfect vacation is one where you totally and utterly forget about work. But when there's no job to forget and no definite work to come back to, you can never completely relax. As you lie sunning and mai-tai-ing the days away, there's always that undercurrent of worry: Is this the last of my money? Should I be home, tightening my belt, pressing palms, kissing babies, and brown-nosing around until I scare up some work? Unless you're blessed with a que sera sera mentality or you get lucky and have work lined up, indefinite time off is always a strain. It may start with a giddy, co-ed-puts-spring-break-on-her-Visa party, but after, say, three months, you're living on the streets. Or(oh god) with your parents. A Money Mind If you're the kind of person who spends whatever you have and more, then the freelance lifestyle may get you into all kinds of trouble. Not only do you need a squirrel-like ability to save for the lean times, you also have to plan ahead for the dreaded T-Day on April 15. Companies generally don't deduct taxes from a freelancer's paychecks. They just hand over the whole gross tamale and leave it up to you to deduct the state taxes, federal taxes, Social Security payment, etc. This also means no health or dental care for you and no juicy 401(k) to cushion your golden years. So you have to set aside dough every month for health care and, if you're smart, money for your retirement. You also have to put aside money for tax time or, depending on how much you pull in, make quarterly payments. Based on the nature of your work and your income, you can deduct some expenses (save those receipts!), but what you can and can't deduct are separated by a thin, blurry line. If you're good with totally confusing and contradictory information, you could figure out things for yourself: The IRS and the Small Business Administration offer all kinds of bewildering stuff for you to sift through. You can also get some free small-business advice from the Counselors to America's Small Businesses, Quicken's small business site, the Business-Owner's Toolkit, or the Contract Employee's Handbook. Still, figuring out things like your estimated tax, health care, and long-term financial planning can be a full-time job all on its own. And that's exactly what you're hoping to avoid as a freelancer. While it's smart to learn what you can on your own, if you're really smart, you'll get some professional help, at least for the first year. Good accountants do more than your taxes, they also give you advice: Not only can they help you understand the difference between an IRA and a Roth IRA, but they can teach you the correct way to submit and track invoices and give you info about local business registration requirements. (Watch out: Some cities carry hefty fines for people caught doing business without a license.) Accountants can cost you something fierce -- mine usually charges US$150-$300 to do my taxes, depending on how many hours it takes for him to sift through all my crumpled receipts. But if they're good, they'll save more money than they cost. Plus they're tax-deductible. If possible, get one that comes recommended. At the very least, get one that's certified. Office Supplies Do you have all the toys you need to do the voodoo that you need to do as a productive freelancer? The laptop? The cellphone? The PDA? The printer? The fax machine? The copy machine? Unless you're willing to spend an unhealthy amount of time at Kinko's, you'll have to get your mitts on most, if not all, of this stuff. Plug in and Play-fulness Can you jump right in between the swinging jump ropes, understand immediately what problems lie before you and what their solutions need to be, and then jump right out without skipping a beat? Since it's often the freelancer's job to leap into things mid-flow, you need to be flexible enough to work well with a wide variety of companies, situations, and people without the benefit of context. Friends Indeed Most people hire freelancers based on word of mouth, so often it's not what but who you know that gets you the work. That's why so many people wait to begin freelancing until after they've held down full-time positions at enough companies to establish a reputation and make friends in the business. If you try freelancing right out of school, you could be in for a miserable life of cold calls. Chutzpah A
successful freelancer needs to have one hell of a lot
of drive. Rather than graze on the same patch of grass
every day from 9 to 5, you have to go out hunting for
your livelihood. Can you stomach self promotion? Does
the thought of saying "here's my card" make
you feel like a weaselly used-car salesman? If you can't
do the hustle, then maybe you need to get off the dance
floor. Find Your Niche If
you feel you've got the mettle to freelance, you still
have to decide what kind of freelancer you want to be.
Since to be a freelancer is to be flexible, you'll probably
end up doing all kinds of work. But to get the momentum
to successfully move from job to job, you need to carve
yourself a niche (or a few distinct niches). It may
take some trial and error, but eventually you'll learn
what sort of work you enjoy and do well and promote
yourself accordingly. Once
you know what kind of work you're willing to do, the
next step is to figure out how you want to go about
doing it. The Many Faces of Freelancing The
freelance approach you choose depends on everything
from abstract stuff such as the style of work you prefer
to concrete things such as your bandwidth (both literally
and metaphorically). Again, while a freelancer may have
to employ a wide variety of work styles, eventually
you'll discover that you prefer one of four grooves,
which I've dubbed Mercenary, Homebody, Fence Sitting,
and Clumping for Warmth. When a job needs doing and it needs to be done right, they send you in. Your hourly (or daily) rate is embarrassingly steep, so it's in the best interest of the company that hires you to make sure you finish the job ASAP. That means they prepare for your arrival in advance, they give you the best and fastest equipment and support, and decisions (should the title text be red or blue?) are dictator-fast as opposed to the usual, glacially slow, diplomatic variety of decisionmaking. This kind of work tends to be on a project-by-project basis. So while freelancers often miss out on the motivation of long-term goals such as the ultimate success of a company, mercenary workers get the short-term satisfaction of completing a distinct project. Along the way, mercenary freelancers get to meet interesting people. On the flip side, they only have to endure horrible people for a finite period of time. They also get to experience a variety of work environments and locales and thus have more than three miserable lunch joints from which to choose. Homebody The technology has been there for awhile, but finally company prejudice has fallen away and telecommuting has become a viable option. Now you can work for employers without ever meeting or speaking to them in person. For instance, I have worked for companies located more than 1,000 miles away. These relationships were conducted entirely via email. So if you have the right setup at home, with the room and equipment you need to do your work, it's entirely possible to pull in a paycheck from the comforts of home. Although working from home sounds like a dream come true (I can take a bubble-bath for lunch!), it's easy to underestimate how much your location influences your mind-set. For some people, it's impossible to get work done unless they're physically at work. The distractions of home -- dishes to do, gardens to garden, fridges to graze -- are a big stumbling block. There are some ways to trick yourself into believing you're at work. I know a woman who gets totally dressed up for work -- suit, pumps, make-up, the whole nine yards -- before she walks over to her computer. And I've found that, while I have no problem working in my PJs, I can't get anything done unless I have shoes on, à la Mr. Rogers, who has to change shoes before he feels neighborly. (I don't even want to know the Freudian significance of this.) Home-work also has other pitfalls. Most people come home after a tough day at work, switch on the tube, crack open a beer, and relax. But how do you go home to unwind when you're already at home? With no variety of habitat and no one to talk to all day but your computer, it's easy to start burning with cabin fever. This kind of work is perfect for people who abhor commuting or office politics. But if you're the kind of person who needs the water-cooler environment, with similarly minded creative types to bounce ideas off of, then you might not want to fly solo as a homebody worker. Also, since you're home alone, that means it's up to you to pay for overhead stuff like office space and equipment support (that's what the beefy freelance money is for), so set money and time aside in your budget for that kind of thing. Fence Sitting Freelancing isn't necessarily all or nothing. If you're not quite comfy flying sans net, consider freelancing as a way to supplement your existing (steady) income. The ideal situation is where you hold down a part-time job and freelance on the side. For some people, this is the best of both worlds: You get all the social and monetary benefits of a steady job, but you have enough spare time to deal with your freelance work comfortably. Unfortunately, finding a company that'll let you go part time can be lottery-winner rare. Usually such a plum position comes your way only after you've paid major dues and have established a reputation good enough for a company to make such special accommodations. Clumping for Warmth In a best-of-many-worlds scenario, some freelancers band together to form flexi-companies like Red Industries (home to ex-Monkeys like Taylor, Anna McMillan, Mary Spicer, and Pam Statz) or Adaptive Path (the digs for ex-Monkeys Jeff Veen, Mike Kuniavsky, and Peter Merholz). While this option doesn't strictly meet the definition of "freelance," it offers an interesting midway point between "totally solo" and "company wo/man." Looser than traditional, rigid companies, collectives like these are more like stables, where individuals can work on their own projects or team up to tackle larger projects together. As an added bonus, they can share office space, bandwidth, equipment (fax machine, copier, Wite-out), legal services, and sometimes even health care and retirement plans.
How Do You Rate? Deciding
how much to charge for your precious time is one of
the most slippery thing about freelancing. This is especially
true since job titles and their responsibilities are
so loosely defined in the online industry. For instance,
"producer" may have a totally different meaning
from one company to the next. And similar jobs pay quite
differently depending on where you live. As a result,
there are no hard-and-fast rules about what to charge.
Generally Speaking In general, programmers are in the highest demand, so that kind of work pays the best. Experienced graphic designers can also do quite well for themselves. And programming and graphic design aside, consulting work tends to pay better than in-the-trenches work. As far as actual rates go, to the best of my knowledge and experience, here is a freelancing pay range to give you a ballpark to gauge by (the higher numbers reflect compensation for experience). Again, these aren't scientific numbers, just what I've heard and experienced. And keep in mind that I live in paradoxical San Francisco, where the standard of living is ozone-high, but you can't do a random drive-by without hitting a Web developer (i.e., competition is fierce). Oh and unless noted otherwise, rates are per hour.
Are You in Good Company? It's in your best interest to get as much as you possibly can for the work you do. But if your steep rates mean that you'll miss out on a job you really want or need, you may want to consider using a sort of sliding scale, based on the quality of the project and the company that's hiring you. So before you make an offer, find out as much as you can about what you're in for. Is this a neato project that will look great in your portfolio or teach you a new, marketable skill, thus leading to more work? Consider charging less. Will you get to keep and use the technology or content you develop? Charge less. Is this a big-money client, capable of and used to spending a lot? Charge more. Do you like the people and the project? Charge less. Does this client look as though it's going to be particularly problematic? Charge more and make sure you outfit your contract with monetary penalties for the usual shenanigans, such as last-minute changes or missed deadlines. Is it a long-term project that'll pull in reliable income? Charge less. Is this a smaller project that will only take 20 hours a week? Charge more since it cuts into the time you'd need for bigger projects. The danger of charging on a sliding scale is that word will get out that you're willing to work cheaply. So be careful about how you represent yourself. Make sure discounted clients are intimate with your usual rate and know that this is a one-time only deal. Hourly? Daily? By Project? Projects in the Internet business are notorious for taking way, way longer than anticipated. For good reason, most clients are leery of signing up to pay hourly rates for "as long as it takes" (read: forever). Companies much prefer to pay one lump sum for a project. Unfortunately, if you get stuck with a difficult, flat-rate project, your hourly rate can sink in to the realm of the ridiculous, like $.03 per hour. So avoid flat rates whenever possible. Instead, offer a well-defined, liberally padded, estimate for the hours a given project will take, but make it clear that the rate is still hourly. If the client insists, however, you may have to lump it. If so, make sure your contract also protects you from as many likely delays as possible, and try your damndest to divide up the lump sum into deliverable-dependant mini-lumps (where each deliverable represents a completed phase of the project). If (touch wood!) the project should derail midway, life will be much easier if you've already been paid for the work you've done. Some work lends itself to flat-rate payments, however. If you're producing a project, it may be difficult to separate what you do into neatly packaged hours. You could be brainstorming in the shower, sending emails while you watch "VIP", or making calls from your car. When your job is amorphous like this, try to get a day rate based on how long you think you'll be working. Again, pad like crazy, since it's easy to underestimate how much of your day a project can consume. Do the Math To estimate how much you should be making per hour, take a look at what full-timers are earning, divide by 52 and then divide by 40 (or 60, if you're in to realism). Then add about 25 percent to cover health care, retirement savings, overhead costs, and the lean times. Then go ahead and tack on even more to cover the time it typically takes you to get a job (the hours spent networking, sending out email enquiries, kissing hands and shaking babies) as well as the time it takes get paid once the job is complete (sending and tracking invoices, and hounding down checks). There are services out there to help you minimize the effort it takes to land and get paid for work (like eLance, Guru, and Elite), but it still takes time, time you need to get paid for if you want to stay in business. In short, if you overestimate both your worth and the time it will take to complete a project, and if you're the type of person who enjoys flying by the seat of your pants (and without a net), you may just have what it takes to live footloose and fancy freelance. Yay! |
