[Baypiggies] Thoughts on starting a career as a consultant?

[Simeon Franklin]

On Tue, Jul 6, 2010 at 11:26 AM, Emile van Sebille <emile at fenx.com> wrote:
> On 7/5/2010 7:37 PM Alex Clark said...
>>
>> But unlike with day jobs, there is no cap on the amount of money you can
>> make as a freelancer.
>
> Well, there is -- 2000-2500 work hours/year at say $100/hr -- $200k - $250k
> (flavor to taste or individual circumstances)

I understand that you're using these numbers as a cap but I think it's
worth pointing out that most people who freelance may work 2000 hours
and only bill 1200. I personally consider days I can bill 6 hours a
pretty productive day but I rarely work less than 8 - usually more.
This is something to consider when establishing your hourly rate. I
don't charge for billing time, time writing proposals or reading specs
or meeting with clients. I don't itemize routine communications
(emails/phone calls from clients) and pretty much try to keep my
billable hours down to the time I actually spend working on something
technical.

This is especially true at the beginning of most people's freelance
careers. Unless you have established relationships you probably start
out underpaid and doing small jobs for a variety of clients. The cost
of context switching between clients shouldn't be minimized!

>This is probably the biggest
> downside to strict consulting.  You're selling your time.  You need to add
> people or develop resellable products to go past that and get a multiplier
> or residual effect going.

In fact I have a 4 step theory of the path of the typical freelancing career -

1. Low money for hard work. You probably start out underbidding just
to get the job. You have poor estimating skills at this point and are
abashed to ask for much more than you made as an hourly worker. Expect
to work 10 hour days for relatively low amounts of money.

2. Medium money, for moderate work. This is actually a decent place to
be if you can afford it. You have established enough relationships
that you can charge what you're worth. Your main concern now is
rounding up work each month - you may not have full time work and you
probably never have more than a few weeks worth of work stacked up.
You still spend time pitching, networking, writing proposals and
looking for better gigs.

3. Good Money, Hard Work. You have arrived as a contractor. You've
fired your first clients and are able to concentrate on your more
lucrative or interesting clients - or you simply have the luxury of
consolidating and eliminating some of those context switches. You
could probably bill 10 hours a day (and work 14) 7 days a week. The
money is good but beware of burnout.

4. $$$ for moderate work. At this point I branch off into theory. I
have heard that some people are able to make a living (or better)
without working 10 hour days. The obvious way to move into this
territory is to raise your rates and if you have too much work you may
well be pricing yourself too low. But most of us work in competitive
industries - its not like I'm the only Python/Django/DB/Web guy in the
world so raising my prices only gets me so far. I suspect that the way
to get to stage four is to own a resellable product or service that
isn't directly related to your hourly billing. My personal business
goals at this point center around saving enough money to pay my salary
while I do a mini-startup - and this will be when I really feel I've
made it; not only being my own boss but also developing for myself! In
the meantime I read hackernews to keep myself motivated...

-regards
Simeon Franklin

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