by Evany
Thomas
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:
The Ability to Go with the Flow
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 (¿se habla credit?),
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.
So as you struggle with what title to put on your
business card, ask yourself this: What type of an expert am I? Do I
know how to do one thing well, such as database programming, interface
designing, or technical writing? (Though it deals primarily with
full-time work, The
Right Web Job for You can also help you define your freelance
niche.) Or am I a "company of one" who does a little bit of everything?
Am I a consultant (someone who has a keen eye for what other people
should do)? Or am I going to roll those sleeves back and do the dirty
work myself?
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.
Mercenary
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.
Deciding what kind of work you do and how you choose to do it is the
easy part of freelance work. What's rock hard is figuring out how much
to charge and then actually getting people to pay you.
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.
However, there are some (very) loose guidelines and
different approaches you can use as you tackle prickly fee
negotiations. Thanks to Tom
Pollock and Noel Franus (of Carbon
IQ and gap-toothed fame), for much of
this info.
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.
Writer (Technical) US$35 to $100
Writer (Non-Tech) $300 to $1,000 per piece
(or $.30 to $1 per word)
Editor $35 to $75
Copy editor $25 to $50
Producer $50 to $125
Information Designer $50 to $100
Interface Designer $30 to $75
Graphic Designer $50 to $150
Animator $50 to $150
Straight HTML Coder $10 to $30
Advanced HTML Coder (CSS, dHTML, etc.) $20 to $50
Programming (everything from Javascript to backend) $100 to $300
But rates aren't the only factor. There are other
things that can make a freelance gig worth your while.
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!
Evany Thomas is
Webmonkey's former managing editor and the author of The Secret Language of Sleep
from McSweeney's. She encourages you to discover your ideal sleeping
position.
