Ask HN: Freelancers what is your average monthly income? I am contemplating on full time freelancing as an alternative to a regular developer job. The unstable income is the main barrier that is stopping me at the moment. Would be very grateful to hear from experienced freelancers about: Average monthly income? If in the same spot would you do the move again? How long did it take to get a regular stream of work? Any other advice or tips you could offer |
After doing a couple of startups in various positions (as employee and as founder), I decided to do some contract work for a while. I'm on my second contract now. The contracts I've been doing both started out as 2-3 month full time, but were then extended. I'm billing roughly x2.5 of my best salary as a perm. I've been raising my wage each time, and I suspect I can raise it another 20% from where I'm now. Possibly more.
So far I've been getting work through network. I've been working as a developer for a while now, so I have a well sized rolodex, but I've been talking to a lot of recruiters - some of which had interesting contracts, so I might be getting my next job that way.
I've been billing by the hour btw., but in both cases, my employer didn't really care how much time I chose to work. In fact - the more, the better, from their perspective. They are large, established companies, so they have deep pockets and my boss isn't paying out of his own salary. From my perspective, billing by the hour means I'm getting paid for overtime, which is a good thing.
If you have 6 months savings, then you're good to go and can take more of a leap. At the same time, I would have at least one on the side so you're sure you like it.
Additionally, there's a ton of client management and communication issues I'm working on constantly optimizing. I wish I would have worked at an agency for at least a year to see how a professional, larger agency handles it so that I'm not learning from scratch essentially. If you're only in-house now and not client facing, there are some serious skills to learn and practice on that side.
Avg monthly income for awhile was about $7k, which nicely replaced my full time, then it's creeped up over the last 18 mos to about $14k gross/$12k net.
I do have a part time contractor now working for me 10 hours a week, which is probably the best thing I've done so far since starting consulting (freelancing).
If you haven't already, consume everything on doubleyourfreelancing.com to have the correct mindset, which is 30% of it.
Key is to price using a WEEKLY RATE. Break your work into chunks of weeks.
Do not do hourly work.
If the client is looking for less than a week, then its possible to do a daily rate, at a higher average, but the moment you have to break up your tasks as hourly jobs or pay-per-task, you are creating the opportunity to absorb unexpected costs from the client.
- Average monthly income?
Hard to say what the average is, since last year I took a break for 7 months and needed another 2 months to find a new opportunity. But when I am working the average gross income would be somewhere above 10.000 EUR ex. VAT. I'm working 40 hours a week. I usually try to work for big clients for at least a year or so.
- If in the same spot would you do the move again?
Definitely. I wish I made the move years earlier (I started freelancing at 32 years old). I really appreciate the feeling of freedom and the idea that I am taking control of my own life to the biggest extent possible.
- How long did it take to get a regular stream of work?
Usually I can get work really, really quick - let's say just a couple of weeks. Last year was a bit problematic due to some issues with Dutch law, making potential clients more hesitant to hire freelancers. For mobile dev I am sure one can find many opportunities every single month and should never be long without work. For front-end work I imagine the situation is much the same.
- Any other advice or tips you could offer.
If you freelance, save some money for your future. I'd say ideally you tried to spread risk as much as possible. You could put some money in a tax deductible pension plan, some money in index funds and use some money to pay of your mortgage ASAP. Make sure you keep enough savings to survive at least a couple of months. If you manage to lower your costs of living, you will be able to survive much longer with the same amount of money.
If you don't want to bother yourself to look for jobs, you could just let recruiters contact you. I get most of my jobs through recruiters on LinkedIn and Monsterboard, because I can't really be bothered to search for myself. Of course, they will take a cut of your pay check, but as long as I am able to make over 10k a month gross, I'm still quite happy. Just make sure that on your profiles you mention you are a freelancer.
When you tell your rate, always start bidding a bit higher than your absolute minimum. So if the lowest pay you'd accept would be 65 EUR / hour (ex. VAT), start bidding at 80 EUR / hour.
Some companies that deal with recruiters have some sort of insurance that you will get paid, regardless if the client pays the recruiter or not. At least ComputerFutures and Progressive Recruitment make these promises and such an arrangement can be nice if you like a bit more security with regards to payment.
Don't undersell your hourly rate. It has to be quite high to afford health insurance, save for retirement and save enough to take a little vacation time.
Taxes are a massive problem if you self-employed. Auto-transfer your estimated taxes so you don't get in trouble at the end of the year.
For one-time projects have them always pay 50% down and milestones for the rest. Don't start until they pay.
And if you can help it, don't bill hourly. Everyone who's been down that route advises against it. If clients don't fully understand what you're doing, they're going to try to manage the only thing they know - your hours.
This is a great resource/podcast for developers on getting paid and not billing hourly - http://www.ditchinghourly.com/
When I started freelancing I had two projects lined up to begin immediately, and had already been working part-time with one client - this is a great way to ensure you start your freelance career on a good footing.
Big engagements for a few weeks at a time are the ideal way to be most effective to your client as a developer, but it also puts a lot of risk on that contract working out and having work after it ends. If you are able to manage your time between two or more clients you are setting up a more stable income stream, also consider retainers but bear in mind these can restrict your ability to take on more lucrative projects when they come up.
One other thing to consider is that freelancing can be seen as a negative on your resume if you look to move back to a full-time role, since some hiring managers interpret it as a lack of a team-player attitude or tantamount to unemployment.
My main motivation to be a freelancer was for flexibility to allow me to move country, I found it very challenging to find new work after my relocation without a professional network in the city I moved to. If I had remained in my original city I would have definitely continued freelancing indefinitely.
Btw, does your personal website help you with finding leads?
I haven't been able to find remote work easily. I did try, at some point and did find one client in New York, but eventually this didn't work out, since I am not much of a designer and the job also involved being strong in design of mobile apps.
Many online platforms like Elance, Zendesk, Toptal seem to be hard to get into. I think after you've build up a small work history on such an online platform one should be able to find decently paying remote jobs. It's certainly something I wish to pursue in the future, but for now I focus on on-site work.