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Avoid marketplaces - it's very hard to compete on quality here.

Have an upvote. I don't work in software, but I am a grant writing consultant, and I've never met a successful consultant of any kind who relied on or even used marketplaces.

A huge part of many consultants's lives consists of marketing and pitching. I know that we've found email marketing to be our biggest strength in this regard. Consultants who can't get deal flow or close deals won't survive.

I also learned a lot about assertiveness and saying no by being a consultant: http://jakeseliger.com/2014/04/07/how-i-learned-about-assert....

> I've never met a successful consultant of any kind who relied on or even used marketplaces

You have now. I started on PeoplePerHour. Once I had a few good reviews on my profile, I could get jobs more easily; eventually got some big clients off them, which pushed me to PPH's top 5 and I was able to get whichever job I would bid on from then on; I'd always seek the large ones that would last a few months.

At the time of course, PPH was a fairly newish marketplace. It's very different now; polluted with low grade jobs and low grade bidders that promise the world for $100.

But to me, this tells that the problem isn't "the marketplace" but the target audience.

In any case, big +1 to GP post. To reiterate two of their points:

1. Do avoid most marketplaces, unless you can find one where you can easily compete on quality (and if you do find one, tell me about it, heh).

2. Charge fixed price by the value. This means choose your jobs and clients carefully. If you pick a bad client, or a job where you need more time than you anticipated to complete it, you might end up underpaid - Roll with it and learn from it, don't make the same mistake twice.

> If you pick a bad client, or a job where you need more time than you anticipated to complete it, you might end up underpaid

These things are easier said than done. Could you share a bit about what you've learned in the way of avoiding bad clients and estimating your work?

The way I screen a client is by getting them to write a brief in an email. The reasons I do this is;

a) Its easy for clients to blurt stuff out over the phone without a second thought. It's impossible for me to take accurate notes on this, only to get an impression of what they're after.

b) A written brief tells a lot about someone's communication capabilities. When a written brief is poor then I have a better idea on how to deal with a client like this, i.e. I have to do a lot more hand holding and depending on my existing workload I can either decide to let them go or not.

Also, watch out for clients who bring carrot danglers, i.e. they will suggest that you should do this project either for cheap or free because they have a lot of other projects coming up in the near future (they don't). In this scenario simply reply that you have to charge 100% for this project but that you might be able to give a discount on a future project, you won't hear from them again since they want cheap or free.

Also, never lower your hourly rate but give a discount instead. This means that clients still see what you'd normally charge and if they come back in the future you actually can charge them your normal rate.

Estimating your own prices is something even I have trouble doing after 10 years, so I won't be too much help there. But to avoid bad clients, you really just have to make sure you talk to them and fully understand the project before accepting the job.

Bad clients will always have red flags early on. If you talk to them for 30 minutes and the job is already twice the size you initially thought it was, you might be with someone who will want to ask for more along the way.

If there is any doubt:

- Ask for a small % in advance or a larger % in escrow. Clients that can't handle that are unlikely to be easy to deal with come time of the bill.

- If the project is unclear, ask for sketches/photoshops before signing the final contract. You can also do those yourself and ask if this is what they have in mind.

- Make sure to have a written transcription of exactly what you will do, alongside the contract. Emails, transcribed/recorded calls, etc.

If you're a core part of your client's product, they will more than likely be willing to hire you for more work, or as an employee for continued maintenance.

And don't be afraid of saying no to shitty contracts. One really good client can easily bring you a year's worth of work.

Make that two. I started in the translation industry by responding to everything that matched my skills on ProZ.com. It was years before I got to the point where I didn't need to because I'd established myself, and I still keep my membership current (more for old times' sake than anything, these days).

Without that job board, I would not have been able to make the switch from programming into translation.

I am 25. Two years and one month ago I created a company called Pixelmatters (http://pixelmatters.com).

I basically did everything more or less the way you described. Which is something absolutely hard to do. As a result, in Aug 2014 we were 2 but today, as I write this, we are 14 and growing.

Company is profitable, has no VC money and is fully self-funded (initially, by my computer and...a decent internet connection).

Do you mind if I contact you for a couple quick questions? I'm essentially in the process of trying #2 as OP mentioned and would eventually like to transition into building a team. Would love to ask you a couple things and maybe get some advice. My contact info is in my HN profile if you prefer to reach me instead.

Happy to help you growing your business, mate! Email me to andre at pixelmatters dot com

I'd rather work for you than hire you. But, I'm in a position to be working for you and not hiring you.

Where did you find the major contracts? Networking? Friends? A website? referrals?

Depends on what "major contracts" are for you. I can tell you that we don't have any "major contract". We to have several "very nice" ones.

The main way clients came to us is through our website, Dribbble, Behance but also through referrals - people that worked with us in the past, and that recommend our work to a friend. This latter is the oldest but definitely the best marketing you can get!

It's been over 10 years since I had my own business, but when I did, I tried to use "we" instead of "I" and paint the business as a business offering services rather than one person trying to get work. It became very frustrating dealing with recruiters (the people who typically contact you for work). A typical conversation would go something like this:

Me: I see you're looking to fill a position involving a lot of graphics work. We could help you out.

Them: Please send the resume.

Me: I'm not offering the services of just a single developer. We have a variety of services we offer. Please see our web site at <http://www.example.com/>.

Them: Please send the resume.

Me: I'm unclear what resume you want me to send. I'm not offering you a single person, but a full-service solution.

Them: Please send the resume.

Me: ...?

I'm sure I could have spent time coming up with some response for these people, but it wasn't worth it. I ended up only working with clients I could deal with directly as it was much easier to have a conversation with them.

So just be aware that you'll have to deal with this type of nonsense from time-to-time.

Recruiters recruit people, so of course they want a resume. If you aren't a person a person that wants to be recruited or wants to recruit someone, a recruiter is the wrong person to talk to.

Unfortunately, many times the 'default' gatekeeper to anyone else worth your time in the org IS the recruiter. Using social engineering and/or linkedin you are sometimes able to figure who you need to speak to and access them directly.

Using social engineering and/or linkedin you are sometimes able to figure who you need to speak to and access them directly

I think you just described what 'sales' is.

I just realized that. But I'd rather call it social engineering ... Sales is an amorphous concept filled with too much 'magic' for me :)

Recruiters don't exist to act as external sales people for your agency. They are there to find individuals for companies to hire.

On the flip side, I recently was hiring for a senior engineer position, where I specified individuals only, and was inundated with emails from firms who were sure they could "help me out" with a "full-service solution." Maddening.

Since the work has no value, charging by value rather than time means that the client who doesn't pay because they are not going to use the work is justified in doing so.

Which is another way of saying, the general problem isn't a good billing model. It's good clients. Unfortunately, most contractors/freelancers starting out and looking for advice won't have good clients (even when they have clients at all) and will have trouble distinguishing good clients from people who look like good clients until the invoice arrives.

YMMV.

You don't tell them: give me what you value it for. You do your best to estimate what success will be (in value) to them. Then you negotiate from that.

If your best professional opinion is that the business is going to go under irrespective of your great work, then the ethical choices under the value model are:

1. Don't take the work at any price.

2. Do it for free.

Again, if a person has experience and great clients, the choice of pricing model is a problem. If a person lacks experience to judge what the value is in the client's domain and/or the client isn't proven to be good, pricing model doesn't matter as much.

The value model price isn't based on what the work is worth, it's based on what the freelancer believes the client believes the work is worth. Under the value based pricing model, if the client is deluded it's reasonable to fleece them...and deluded clients who pay well are good clients.

Don't charge by the hour but by the value

This sounds like a recipe for disaster to me without a lot more explanation. Time is the main cost to a provider, so it's very natural that time would also be the driver for billing. "Charging for value" sounds like you're trying to say "fixed price" without actually saying it. I have many, many issues with trying to do fixed price projects of any appreciable size (say, more than 20-40 hours).

What do you mean, precisely, by "charge by the value"?

https://training.kalzumeus.com/newsletters/archive/consultin...

http://www.kalzumeus.com/2012/08/13/doubling-saas-revenue/

Really depends on the client. If your client is able to agree on tight specs and project plans, everyone is better off with fixed project fees. The client can more easily plan financially with a fixed budget. You can charge more, because instead of charging $DAILY_RATE * $DAYS, you can charge $REVENUE_CLIENT_WILL_MAKE_WITH_FEATURE - $THEIR_MARGIN, and the latter figure tends to be significantly higher. You can also deliver the project more quickly because now it's in your interest to do so. Everyone wins.

That being said, if the client is unable to commit to tight specs and project plans, you need to revert to invoicing on a time & materials basis. But even if you do that, you should really charge a daily rate, rather than an hourly rate.

>You can charge more, because instead of charging $DAILY_RATE * $DAYS, you can charge $REVENUE_CLIENT_WILL_MAKE_WITH_FEATURE - $THEIR_MARGIN, and the latter figure tends to be significantly higher.

That's really going to depend on the type of work you do and the type of clients you can find. In my experience, it's difficult to get contracts with larger businesses unless you know someone already or have some sort of "in" with them. And smaller business tend to be poorly run and are barely making any money on their products and services, so they have very thin margins or are even losing money.

A good example of "charging by value" is productized consulting - where it's a particular task, etc. that needs done for multiple customers.

Say you're really good with Postgres, instead of just hanging out a shingle for "any Postgres stuff?" you offer something like a one time $2500 "Postgres Performance Audit".

You get really good at this one thing, have a set bunch of scripts, very deep knowledge, predone report template, etc. and providing a bunch of value. So at the end of the day who cares that it only took you 5 hours (effectively making $500/hr).

Bunch of examples: http://www.christophengelhardt.com/ultimate-badass-list-of-p...

Ah - I didn't think of this angle, but I like it. Thanks.

Except that you are making your services a commodity. A large part of what makes my services valuable is that I can't approach every situation with a pre-fab script and report.

No it's a commodity if it's non-differentiated from others. You can still have non-commoditized work that operates at scaled efficiency. You just have to have something that makes you better or different.

As soon as you have a product it's no longer consulting in my eyes.

Some clients are rich. You could charge by what you feel you're worth, say $50/hr. Or you could charge by what they value the work at - at that might be 4x as much. They might be used to paying $200/hr, and are happy to do it.

That mentality is similar to charge by value.

Demanding a higher rate allows clients to select for themselves whether they will be on your client list.

It's vague, because it's a high level idea. I want to earn more than I can by time, therefore I have to get clients to start thinking about how much value they are getting and paying for that.

Practically I've had success recently by charging weekly. I keep this rate deliberately lower (about half my old full time consulting rate). Then I send them a weekly report along with the invoice every week. They get to see exactly what they got for the money. It usually takes me 15-20 hours to deliver enough value for the weekly rate.

So there are lots of things to try. Small changes in billing can have a large impact on your relationship with your client.

You can charge by value when you understand the scope of work, have the ability to manage it, and manage risk. The customer gets a fixed price for a fixed scope with a fixed process.

#1 is where it's at, in my personal experience. I find it hard and less than optimal to work for multiple clients because of the time it takes switching from project to project. Having just one client is inherently riskier from a standpoint of financial stability, but I think the benefits outweigh that risk.

Came here to agree with and support this method of contract work. I currently have a contract that consumes roughly 50% of my time in a given month and generates 80% of my income. Initially it was for 12 months, but things are going well and it has been extended essentially indefinitely. These type of contracts might be kind of rare (not sure?), but if you can find yourself one, it gives you all kinds of flexibility with figuring out what to spend the rest of your time on.

Domain experience and expertise are also key. I have a rare blend of experience and technical capability that align perfectly with my primary contract. This limits some of the risk that is associated with relying so much financially on a single entity since they'd have a really hard time ending things with me and swapping in another programmer. I'll also go above and beyond for this client as it's needed. It's a two way street.

Anyways, best wishes on finding a good source of contract work but I'd recommend investigating any major/long term contract. They can simplify your life and be extremely rewarding.

Hey, I'm a Web developer living in UK, and English is not my first language, I can speak okay and also i'm studying to speak fluently. Iv'e been working in the industry for past 6 years, Considering i'm not a native speaker, Do you have any suggestion that i can improve my chance of securing contracts ? Is it possible to keep all communication in email ?

There are a couple of things you didn't mention.

Contracts Do this. Get familiar with contract law and make sure your customers execute one that's favorable to you getting paid. Also, ensure you assign at least a license to the client paying you to avoid any problems down the road if you intend to reuse code.

Big projects If you intend to tackle big projects you usually need to deal with net terms. Find an invoice factoring company to help you cashflow those deals. They base interest on the loans on your clients.

Re. 1: never ever put all your eggs in a single basket like that, it may work for some but it is a huge risk and there is no real reason to take that risk. Two is a bare minimum, three clients is stability.

The problem with charge for value is now your a product not a service. Not that that's a problem per say but it's a whole different animal than trying to being a contractor.

I'm pretty interested in shifting into a product orientation, so that would be fine by me ;-)