Hi there. My name is Kevin Lewis and I'm director of You Got This which means that I am running the show that you are watching this event at. A few speakers let us know that they dont make it so I thought it would be a good opportunity to share some things that I learned through freelancing and running my own agency. Both validating and debunking some of the assumptions and thought processes I had in the hopes that I could save you pain I went through and put your best foot forward when starting to freelance. This talk is going to go from considering freelancing and the questions you should ask yourself to know whether it will fulfill your needs right through to deciding that freelancing is no longer for you once you've been doing it for a while. I think this talk is particularly important at this point in time at the beginning of 2023 because we're several months into what feels like a never ending slate of layoffs and it's forcing a lot of people to consider whether freelancing is a path they should pursue.
So with that let's get started. We're going to start with getting set up. And deciding that this is something that you want to do and how to get started. The first thing to ask yourself ask what is your motivation? Why are you considering freelancing in the first place? Now at this point in time you may feel your hand is forced because you're struggling to find jobs in the current market. But putting that aside, in the world where you do have a choice, you may be thinking that by pursuing the freelancing route as opposed to working for is someone else you will allow your self-variation. It is not my style to work on the same thing for 40 hours a week. But you can get that experience through full-time employment through work at agencies, agencies take on a bunch of projects and when they're done, you'll be reassigned to a new project so you may find yourself being able to meet this motivation of a varied workload through working for someone else.
You may also want the notion of being your own boss. I'm kind of here to tell you that until you build some confidence through experience and authority, you do have a boss and that boss are your clients and you'll be at a point you have less confidence about how to manage those clients which could make the relationship a little bit strained. So just know that you can set out your motivations but know that many can also be met by full-time employment.
Hold on to this motivation. We'll come back to it later in this talk.
I also want you to know when you're starting out that you don't have to go all in. You can start slow. You can do a little bit of work, a few hours a week rather than jumping in for 40 hours a week. The muscle, the skill to sell and have a consistent stream of work took me a good five years to build. In that time, freelancing as my main source of income was an incredibly stressful endeavor.
So what we talk about in freelancing or any type of sales work is that you build a pipeline. You build a set of conversations that you believe some of them will turn into money.
So you want to build a really solid pipeline before you start relying on your freelance work for income.
So it's okay again to kind of have a day job that pays your bills, pays your rent, your mortgage, buys your food, does what you need and earn supplementary income freelancing and when you start to earn enough that it's viable you flip the switch and now you can do that full time because you have a consistent income kind of setup. You also need to understand and accept all the skills that you will need. When you work at a company as a software developer, there are a whole bunch of things you don't need to do in order to make the business successful. You have a part to play. But there are a bunch of extra skills you need to employ as a freelancer, not only delivery of projects but remembering that you might not have all the skills you need to deliver on every project but you're going to need to do sales work. You're going to needs to chase clients for payment if they're late. You need to manage the relationship with your clients. You need to do accounting and bookkeeping. You need to put together contracts and have people sign them. You need to manage your project and make sure your client understands that. So there are all of these additional skills that you will need to do as a freelancer. We'll talk about this again in a little bit. Before you kick off you need to spend time unfortunately and get all your ducks in a row and you need to ask yourself a few questions. Firstly, you need to be clear in your value proposition. What do you do? Is because at this point, it is possible that you will have kind of shallow knowledge in a bunch of different areas. But that is really difficult to sell to clients until you have more experience. So you want to focus down to just one or two areas where you are a specialist and you can talk about your skills with a little more certainty.
You should also understand what you know and what you're willing to learn to do a job, and, in turn, what is beyond the scope of what you're willing to learn to deliver a job. This is really important because our discipline as software developers means you'll have to learn something for every single job. Every single gig that you do. If it's too far from where you are today, the amount you need to learn is too great to do on a project you're becoming a liability to yourself and your clients. And so you ask yourself, okay. Well, I understand that I'm a front end developer for example and this work has a heavy back end component. Server side component. Can I subcontract this work out to other people? Can I find someone else and pay them a portion of what I'm being paid to deliver on that part of the work? You also need to get examples of your work together. If you're a student, which is where I originally gave this talk for context, if you're a student remember that your uni projects are okay but try to omit them where possible. Unfortunately, lots of clients will see student and down play your ability or think they can pay you less than you're worth. So you want to put your best foot forward as the professional you are. That may mean needing to curate your work more carefully. You need to understand the skills you need, the last slide, you want to structure your work, set up routines and block your calendar to do things like sales work and finding new work. To do admin and try to have tools in place that help you do this and be as organized as possible.
The next thing you need to do is set your rate. I did research and March 1st of 2022. The average base pay for a software engineer in London was £53,000 pounds a year is about 4,400 pounds a month pretax which works out to about 200 pounds a day. You may be tempted, fine, I want to earn the average 53 grand, so I'm going to make my rate 200 a day. But this assumes 100% of your work time is working. And you have it booked up, which is unrealistic because you needs to do sales and admin. You don't get sick days as a freelancer. You have to buy your own equipment. Extra bills, insurances to take out. I'm not here to tell you what your rate should be but you need to consider these things. My first day rate was 250 pounds. Way too low. I was struggling to fill ought of my time. I didn't earn nearly enough. When I ran my agency our first day rate when I was fresh to doing this was 300 pounds a day and it was so low I had to do one and a half days of work for every day we were paid for which is leading to 70, 80 hour weeks, completely unsustainable. I want you to get this right. It's not my job to tell you what your rate is. But, if you want to have a chat I'm happy to chat with you after this event. Also recognize everyone's circumstances are different. Your need for an amount of income will be different for each person. You need factor that into your rate as well. Finally if you're early in your career, this is delicate and I feel weird because this is at odds with the message this puts out but there's a shortage of skilled talent software developers even now. If you're at the beginning of your journey, there are a lot of people at that point. So you have competition. And in is where side pro projects and things are useful with full recognition that not everyone has privilege to spend that time. You just need to know if you don't have the time and you don't have this kind of experience, this is something you need to just be aware of as you're entering conversations. Next. E. Know where your strengths are and know where your strengths aren't. Earlier on I said there are a bunch of skills, one thing I said is accounting. You should never do your accounts. Your accountant is a specialist who will almost always save you more money than they cost and it's difficult to put down money when you don't have money to start but they almost always will make you more or save you more than they cost you where you're not a specialist in a thing that is complex. Consider owning it and saying I don't know that thing and paying someone else to do that work for you. Next, get insurance.
Get insurance. There are a budge of different insurances for freelancers. Client is not paying or they're being a dispute about the quality of your work or your work caused some loss to your client and they're frying to come for you. There are insurances in place to save you. This is not legal advice. I'm someone who is chronically overinsured because that's the kind of person I have. I have a low risk tolerance but main income you don't want to fiddle around. Considering purchasing insurance for freelancer that is appropriate for your risk tolerance, there you go. That is my nonbinding nonadvice version of this statement.
Okay. Your first few projects: Absolutely no doubt in my mind whatsoever, your first 10 projects will be rough. They'll be rough. You'll be learning how to do everything beyond just delivery. It is going to be tough.
But it is almost a part of the journey to understanding how to freelance well and how to build the systems and processes to be successful for years to come. But here are some tips that I'm give you to shortcut learns, ones that were painful. Firstly, please listen to your gut. If there is an issue that feels like it may happen, it will never just work out. It will never come out in the wash. It will never be okay at the end. A bad start or bad vibe will set the tone. Furthermore, a lot of clients will invoke an emotional response in the words that they say. Especially when they don't work for companies, I'm putting myself on the line, so on and so forth. This is not your problem. Any message that is designed to invoke an emotional response is a huge ick. Listen to your gut. It will not be okay at the end. I'll say it again, I'm bad at taking my own advice. Listen to your gut. If it doesn't feel ride you'll delay the inevitable. Or manipulated.
There are times you will be desperate for cash. Don't let it impair your judgment. There were times I needed cash in the bank to pay my rent and I took on jobs is that there was a red flag and I knew it but I needed cash and hey this is getting 50% up front I need that. It impaired my judgment and I ended up paying for it. This one is really difficult because who am I to sit here and say there is an olive branch for cash and you need it. Don't take the cash? But I just want you to exercise your caution. Exercise caution. Know that if you feel you should take a job because you're desperate there's going to be something that goes wrong with it. Next, scope your work within an inch of its life. Discipline, our deliverable. Our software quite often lends itself very well to scope creep. To extra features, to misunderstandings or assumptions that features would be included. Is scope your work within an inch of its life. Make sure there's very little room for ambiguity. Is where there's ambiguity they'll try to do less work and get you to do more work and this can be a challenge for many reasons, financially, time sync, maybe some places even the way the project is built would have been different if you knew features existed costing you even more time. For anything more complex I'm going to mute my mic because I'm about to cough.
your ear drums are thanking me. Discovery print. You're coming to me with a project. I'm not sure how it will shape up. I'm not sure the features. You may be tempted to say I'm going to build this for you. We'll figure it out as we go. This is what it's going to cost or this is how much I anticipate it will cost. What I recommend you will do and this is something I unfortunately learned the hard way is get them to just pay you for a shorter amount of time. Couple weeks of research, of understanding going in and talking to them and understanding all the issues faced. What is actually in scope and what isn't. Then you put together a proposal for the bigger piece of work. This interplays a little bit with taking work because you're desperate. For me at least, I took a job because I was desperate for the cash. I didn't do a discovery sprint. I agreed to the fixed cost. It was 80 grand project. I got paid for a quarter up front. Fantastic, didn't do the discovery print and every time we spoke, more feature were added and they thought it was obvious. Of course, not necessarily. We didn't talk about it, right? The way I saw it working was different. Put together a proposal based on that. They may take that proposal and not do anything with it. They may take that proposal and put it out for tender. What you don't want to do is get stuck with a project that's two or three times bigger than you think because there was a misunderstanding of what was going to be included. How do you price projects. You need to decide this up front and also in the first projects. Are you going to 50r fixed cost or day rate? Clients like fixed cost. They like knowing I'm going to pay X amount of this but at the beginning of your freelance work, your ability to estimate the time it takes to do a job does not exist. It's not a muscle that's toned yet. So you have a higher estimate. If a client says I want this at fixed cost. You say I think it will cost a thousand units of currency. Fixed cost it. You may me -- add a 20% buffer. Is that is contingency which will project you. And almost a fee I suppose for of the fixed cost. There are risks here. You still have to estimate your time somewhat appropriately. Because you only have 20% buffer. But do consider this as an approach if you must do fixed cost projects. This goes without saying and boring admin. You have to contract your work. You have to have a piece of paper that you both sign that agrees what the scope is. Payment schedule. What your responsibilities are runs the project is over. Are you going to host it or maintain bug fix? Ideal world you want to deliver a project and wipe your hands of it. Not a problem. There's a bug. You paid me. You signed off and agreed it's done. It's done now. Or maybe they pay you for ongoing work. First 10 projects make sure to be super communicative. If things are not going to plan, communicate it. If things are on track, communicate it. Don't lie. Communication is the saving grace for situations that are not going well.
Your clients will appreciate it and it will help you out. It will help you avoid that dread of needing to break news and delaying it. Also clients sometimes can be more flexible than you realize. But only if they have adequate notice to be flexible. Finally, understand this whole relationship is transactional. You owe no one anything. Not a minute of your time. You owe no one on this planet a thing. Someone is paying you for work. For labor. They're paying for your time or deliverable regardless of how much time it takes, for that they're going to pay you money. In theory, they have placed Val on your work which is greater than they're paying you. If you're building a Web site for a software company, they're hoping to make more money off of that Web site update than their paying you the or if you're building a piece of software or web app or whatever. If you're designing an album cover, someone is -- that album is going to be sold. That person is trying to make more money than cost them to produce all the artifacts required to make that happen. Completely transactional. Even work with friends which we'll talk about in a minute because I dissuade you from doing this. It's transactional. If they were going to someone else, they'd pay for it too. Just remember this it's really hard because you may feel guilt where you feel like you're not delivering as you should. It is completely transactional.
Okay, we're now on your journey of being a developer or being a freelancer, rather. Here are things that not I wish I knew but I just want to remind you. Money that hits your account is not all yours. I feel like this is pretty obvious but I want to say it anyway. When you get paid as a freelancer, your tax -- when you get paid as an individual, depending on the country you're in at least in the U.K. and in Germany where I live now tax it taken out and that money is yours, save it, spend it, hide it under a rest, it's yours. When you're freelancer, you have to pay tax. Just remember you need to be keeping money aid so for tax. Amount is different depending on circumstance, country, whole bunch of things. Another example to engage with an accountant just remember what hits your account is not all yours, at some point you're going to have to pay the tax man some money. Be savvy when you earn and spend in calendar Q1. The tax year ends April 5th. So Q1, so January, February, March. The first quarter of the year, you want to be savvy when you earn and spend, you want to spend as much as possible so you have as many expenses to lessen your profit. And if you have to get money off clients, you want to ideally wait until April to offset so it becomes the next financial year and you're not liable to pay tax until the following year. Talk to an accountant. It's probably different in other countries. Be savvy at the end of the financial year to limit liabilities. Talk to an accountant, please. Next, sometimes you're going to do crappy jobs to pay the bills, freelancing looks amazing, work on free projects all the time. In an ideal world you will only work on fun stuff. We don't live in an ideal world. So just remember for every fun project you've got, for every three or four projects, you've got one that's crappy so easy, auto pilot. It's boring, whatever it may be. You're still going to be paid the end of the day. Next, document your work. Every lecturer at uni said document your work, screen shot, you document your process. Sounds dull and we don't like cooing this but quite often you will deliver a piece of work and eventually that work will disappear off the web and that's all proof that that project ever happened gone. Is make sure you're taking screen shots of that work because they'll form part of a portfolio. Next, you can buy in help. If you're struggling to deliver a project or you don't have all the skills required you can pay someone to do part of that work for you. Whether it is work that you know how to do but you lack time or it's a skill you don't have, you can buy in that help (sneeze) excuse me. But you have to be sure to protect yourself. Let me give you an example. I once contracted a portion of project out to the client they don't care who I'm giving the work to. In this context. Some clients do. In this case the client doesn't care as longs as work gets done. I'm responsible. Not the person I'm paying. That person let me down, it cost me 15 grands. Again, trust your gut. Listen to red flags, have a contract in place. Have insurance. This is another thing that can be covered by insurance policies.
I would recommend not working with friends because it gets awkward. Gets awkward. If you're paying someone and they're not delivering what you need, you have a source of action. When it's a friend what gets wrapped up is a personal relationship. Not only making it awkward but perhaps jeopardizing it. I would represent not working with friends. If possible. Your mileage may vary but I've had it go wrong more than right.
And finally in this section, find a community, being a freelancer can be really lonely. You can be part of many teams as a freelancer, a member of teams on a temporary basis and part of no teams whatsoever because you're never really in. You're still on the fray. You're often working alone this is array.chat, a curl, a nice community of freelancer. This is a community of people. Will this is not a free community. Fiver a month or something, but I found huge value in that. Final bit of this talk then. Let's talk about bowing out. At the beginning of this talk, I asked you to kind of understand what your motivations are. And that forms part of this kind of set of questions you should ask yourself semi regularly, every few months. How much are you banking? Money isn't everything. Some people would have less money and have control and work on projects they select based on what criteria they feel is important but you have to ask yourself how much you are banking and how much time are you spending? I enjoyed a lot of projects I worked on as a freelancer but I was working 70, 80 hours a week before that I was browning in witches and I was not earning that much. That combination doesn't make sense for most people. Also ask yourself regularly as I implied. Is it meeting your goals or motivations. Are you your own boss and so on. Remember that freelancing offers you flexibility to take jobs to leave freelancing, when you work for a company it is not reasonable to do interviews during work hours because you're working during those hours. When you're freelancing your own boss. You can take all the interviews you want if you're not charging your clients. Finally we're reaching the end of this talk. Taking a permanent gig or job while freelancing or ending freelancing practice is not a failure. You will have learned so much by freelancing. Even if you then stop, those skills don't leave you.
So I hope you found this interesting and not too rambly. It has a little. We spoke about getting started freelancing. Setting rates and how to do that. We can be rocky in your first few projects and you can make it less rocky by immediately knowing what you had to learn. Trust your gut on the red flags. We spoke about career as freelancer and finally how to bow out. As director of You Got This, it would not be right to leave without letting you know on June 15th, 2023, we're running a special event called You Got This fearless freelancing. A one off event on the International Freelancer's Day. And we'll have a set of talks around the act of freelancing and score skills because there are a ton of skills you need on top of delivery skills. Actual skills needed to hand off work. I think it's going to be really, really valuable. So June 15th, fearless freelancing at yougotthis.io. We don't have tickets yet we'll send out a newsletter. We're looking for sponsors, we can put speakers on this. No promises but do get in touch. And with that, I hope you have a wonderful rest of the You Got This broadcasting service.
Thank you ever so much and I will be speaking to you a little later in this event. Buy for now bye for now.