Ask HN: First tiny freelance job questions | Hacker News Reader

Ask HN: First tiny freelance job questions

41 pointspaidsworder29 comments

I'm a freshman in college and have agreed (informally) to help a local small business convert a large excel file into a format their new inventory software understands. I'm meeting with them in a week to determine whether their request is feasible, and then discussing terms of engagement if it is. We've discussed compensation and I've said I will charge a fee for the consultation and then some additional rate if there is any other work that can be done.

After this point, though, I'm lost. I don't know what to charge, how to invoice, or what kind of contract I need to write up. There is lots of info about this around the Internet, but it seems to be aimed at more established developers doing larger projects in higher cost of living areas. If I walk in with a 10 page contract asking for $300/hour they'll probably politely decline.

That in mind, does anyone have any advice on how to proceed?

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Keep it simple, this sounds like a simple project. Estimate how long it will take you to do the work, charge them a flat fee, and get half of the agreed upon amount up front.

$300/hour is way way way too much, even for a professional developer. You have no experience or formal education as a freshman, your rate should be max $50/hour.

You don't need any contracts, just get half of the money up front and if they screw you over, well at least you got that. When you give them the quote for your work, have each party sign the quote - that's your contract.

Great advice for getting started right there. Keep it lean. Since this is one of your first projects, I'd say the focus is more on quality and less on profit, growing a happy client base and nice portfolio.

One of my projects started something like OP's project did - a small gig, replacing a complex Excel with a simple software. The Excel was a way more complex than I initially thought - business processes usually are, so take that into account if you offer a flat fee. Despite the flat fee for the initial project, I managed to do the replacement. After that the project grew and grew, and become fundamental part of their business - basically their ERP - and I ended up working on it for over 3 years. It was good money, but a bit boring in the end.

I recommend that you set market rate as your base (target) rate. Ask around what the market rate is in your area, but it is likely more than $50/hour for short gigs like this. However offer them a significant discount, for example 50%, for the first X0 hours - and say that you offer it because this is your first project and it's win win for both parties, but you don't want to work with that rate forever.

If the project grows in importance, and you get a lot more work from them, it is easier to negotiate new hourly price, when they don't expect that your standard rate is the discounted rate.

As someone who has been there they will likely view what you're doing to be equal to what a freshmen summer temp might do. Thus asking for professional standard pay has a chance of going poorly. And to be fair as a freshmen you might have less then one year experience in programming.

If someone were to give me advice before I started at a young age I'd have wanted them to tell me to keep my expectations low and treat it as a learning experience and to derive as much enjoyment from it as possible.

I was thinking the same. Our Salesforce / Marketing cloud consultancies are in the same sort of range as described. I am doing the job for a fraction of the price (well my normal wage), but it is taking me a fair bit longer, as I am having to learn a fair bit about these (awful) systems as I go.

What do you dislike about SalesForce? We're currently looking at CRM's and that is one of the choices, so I'm curious about your thoughts on it.

As a developer its really tedious to work with.

I have to integrate our booking system with it, sending everything via the REST API. Its got loads of restrictions (only send 1000 records per file and such like) that make it really slow. It takes around 1 week to do a similar task via salesforce as a day long task doing Django to Django.

A lot of the functionality need to be done over their web interface - so again slow. Mass deleting records again has limits of 250 per delete.

I am sure an expert in Salesforce would be able to do things more efficiently than me, but its unpleasant enough to work with, that I don't especially want to become one.

I'd keep it simple, pick an hourly rate that works for you, and just bill the initial meeting at that rate. Get them to agree to the rate informally before you pass around any paperwork. Don't write your own contract, use a standard one, and keep it short. I can share my half-pager with you if it would help.

I can share my half-pager with you if it would help.

If you wouldn't mind, it would be nice to get a real-world example.

Long https://dl.dropboxusercontent.com/u/6821374/Independent_Cont...

Short https://dl.dropboxusercontent.com/u/6821374/Independent_Cont...

Be sure you understand everything in whatever contract you sign, and consult with a lawyer if you're unsure of anything.

Thank you

Thanks, this will help me a lot. Are there any others around that I can access somewhere? Googling didn't help.

This is late, but checkout hellobonsai.com ... I'm a freelancer and use it for all my clients. Customized pre-made contracts + built in invoicing and payments through Stripe, Bonsai takes a very minimal fee too..

Made my life so much easier..

In the world of freelancing/consulting/contracting:

1. No matter how you price your services, what terms you offer in your contract, or how competent you are, there's a significant chance that the potential client will decline.

They will decline because they are just window shopping. They will decline because someone cheaper comes along. They will decline because it turns out to appear not to be worth the money. They will decline because someone more expensive comes along...or the owner's nephew, or someone who is simply a better fit. They will decline because a customer canceled an order, the bank loan didn't come through, a key employee quit, a new hire was made, or your shoes were the wrong color.

2. It's hard to do at first, but there's no point in investing too much in any one proposal. 'Just' listen to the potential client, make a decision on rate and terms and present it.

3. When dealing with amateurs -- by which I mean people who don't frequently contract for the sort of work you do -- you will often be competing with free. You will often be up against other similarly unrealistic expectations.

4. When dealing with non-amateurs it's often a good idea to consider what happened to the person who did the sort of thing you're doing for them previously.

Specific advice to your situation:

It is not unlikely that the company had the option to pay the inventory software vendor to convert their data over, or that the vendor could provide a list of qualified consultants to do the conversion. And that the company chose not to pursue that route.

If this was an advertisement to students rather than something that came through your social graph via 'warm' and 'organic' relations, it is likely that the company is seeking to get the work done on the cheap. Because that's frequently the motivation for hiring students to do 'professional' type work. Unfortunately.

Finally, keep in mind that it is highly unlikely that this is the last or best or most important piece of work that will come to you in your career. The most important thing, whether successful or not is to learn a bit about business, a bit about human nature, and to improve your 'spidey sense'.

Good luck.

As someone who has freelanced a lot, I wanted to say great post. I hope OP takes your "most important thing" to heart.

There are a lot of resources out there for contracts-- which you should definitely be using-- andFreelancer's Union also has some good tax and contract guides-- https://www.freelancersunion.org/resources/ (They're free to join.)

The main thing to remember is that if the total value is over $600 and you're reporting the income, the company will likely ask for a W-9 from you and issue a 1099 at the end of the year. Then, you will be charged the 15% self-employment tax on top of federal and state taxes. A lot of beginning freelancers don't figure this into their rates, and they end up with a much bigger tax bill at the end of the year than anticipated.

I would recommend charging hourly, $50-75/hr is likely reasonable in your area, but providing the business an estimate of the range of hours-- say 10-15, or 20-25, etc so at least they know ballpark in the beginning what to expect. If you check in with them midway and say "hey this is ending up to be a lot more complicated, just so you know it will take more hours" then they'll appreciate it and be more likely to pay you quicker with no quibbles or "surprises."

Do you run a business with a DBA or will they be writing a check to you personally? How well do you know the client?

I would be fair and honest when you do the consultation - in terms of what you charge and in terms of the feasibility part. Without more info, I think an email can be enough at this point just confirming details in writing, including the consultation fee and anything else as this gig sounds quite informal right now. Others may disagree and recommend an LLC or some long contract as there is risk involved.

Only after the consultation can you figure out how to structure a contract. Based on what type of effort and time frame is needed. Whether to go with a total project fee or charge hourly and you will get a better feel for how this client does things.

An email might go like this:

"Hi...,

Follow up to our conversation...Consultation to get your new software compatible...should be 1-2 hours on site...The flat fee is $200. Please make the check payable to Freshman Paidsworder...I am available Wednesday and Friday next week to come out there...Please let me know if this works for you and what day/time is convenient..."

Keep in mind, how do you think this small local business handles other contracts (eg HVAC repair job), do they have a bookkeeper or are you working with the owner directly?

If this type of work is something you would like to keep doing, try to make it positive/easy for you (be yourself) and make it positive for this client (word of mouth/reference/right thing to do).

Good Luck, Congrats.

P.S. $300/hour is not that crazy if it is one hour of work total ;)

I would charge them a flat fee for time spent on discovery. Say a few hours so you can gauge the effort. Then write up a description of what you think constitutes the "deliverable" and effort/cost involved for fixed cost. That way they can't tack "one more thing" on the end without more money.

This is a good place to start; I've done this for several freelance projects, start with a "Feasibility Study" and charge a fixed price for it.

This gives you time to investigate the effort involved in the work. The deliverable is a short document outlining what the scope of your solution is and ideally how much it will cost (for small projects clients generally prefer a fixed price). Pick a number that you think you would be happy doing the work for and you think the client will be willing to pay- this could be based on estimated time x rate or simply a number you are comfortable with.

If this is agreed then you can move forward with doing the actual work.

I've always been interested in doing side jobs, but unsure how to agree to a rate and bill businesses/people based on what they want.

Some people want a website built or fixed up or apps - can anyone offer some simple resources/advice to go about doing that?

Double your day job hourly rate. So if you make $100k a year, that's $50/hr, and your freelance rate would be $100/hr. When you factor in benefits (insurance, 401k) and the self-employment tax of 15%, plus the cost of downtime to do self-promotion and marketing, it works out to about double your employee rate.

I've always heard that 100k is about $50/hr but I don't think that's right.

salary 100k

self employement tax + 8k ~ 108k

health insurance + 16k ~ 124k

401k match + 3k ~ 127k

3 weeks of vacation and 10 holidays is 47 weeks of work.

So ~$2700 per week which is $67.5 per hour

(this doesn't include disability/unemployment/life insurance)

It's just raw salary divided by 2000 hrs (50 weeks a year * 40 hr weeks). It's obviously never fully accurate for any one person, but that's just how the world calculates something that isn't inherently hourly. If that's what you're worth an hour then double $67.5!

A few ways to determine your fee-- can you estimate the value created by the work? Man-hours saved? Revenue generated? What sort of budget did the client have in mind? Is there a benchmark rate individuals who specialize in this area?

Suggest reading Alan Weiss, still the gold standard on building a consulting practice > http://www.goodreads.com/book/show/260218.Million_Dollar_Con...

I've done a bunch of little freelance stuff. Money is always great, and I'd follow the advice already given if that's what you're looking for.

On the other hand, it might be worth considering a trade for labor for whatever it is they sell. When I go this route, I usually end up getting way more in trade than I would have in cash. But again, this is only if they're selling something that you may want.

Be very careful with intellectual property issues. Make sure you decide what part of the work you'll do belong to you or them. Discuss that with them upfront, in a diplomatic way (so you don't sound too pretentious). That's very important if you "think" the open source way, where we can share some stuff. Some people are absolutely against that mindset.

Contracts just say I x agree to pay n dollars per t time for work. That both sign. And then sometimes have clauses if party 1 or 2 doesn't pay or do the work.

You have two options imo (probaby...ianal,...), give a contract that has rate on it and then your timesheet, or just contract and invoice them after.

You can do a simple contract off google.

Just do 1 Job at a time imo

It's ok to be honest about where you are at: telling them that you don't know what to charge, invoices, contracts, etc. Then you guys can work together on finding solutions for all of that. And the pay rate can always change later on.

Converting a large excel file into a format for their new inventory system is valuable to them. But it might not be that complicated for most developers.

They would probably agree to a fixed fee more easily than a higher hourly rate. There is some risk here if you're not confident how long this will take.

Figure out what your target hourly rate should be based on what you want to make or feels fair. Then setup a fixed fee price that works for you.

I would propose three phases.

A. Initial meeting, they provide a small sample of their existing file (a few lines) along with the same data in another excel file manually converted to the format their new software requires along with the full excel file they want to convert. Also ask for rules/requirements, special cases for the conversion.

B. Setup a sample 50 to 100 lines as an initial test, that you will convert and provide them as a test to verify the conversion is working properly.

C. Once they ok part B, convert the entire document.

So maybe part A: $50, part B: $50, part C: $150.

Prepare a contract ahead of time with the Phases and amounts included so they can sign off on it at your meeting. A simple one or two page contract should work. You can probably use the short version of the contract eschutte2 posted. Just replace the hourly rate section with a fixed fee section.

I would invoice them $250 payable by check when you deliver the final excel file(note this in the contract). Companies usually don't like writing multiple checks for small amounts.

If you do part A and part B and the conversion isn't working out, invoice them $100.

Let them know that you will provide support if there are issues with the conversion at no additional cost if it's an issue outlined in their original rules/requirements for the conversion. If it's a new rule/requirement you can provide that for an additional fee.

They will probably ask you for a W-9 tax form for their accounting department so they can send you a 1099 for taxes, required if they pay you $600+ for the year. You'll probably be operating as a sole proprietorship which is ok, I'd recommend getting an EIN (free online IRS) so you can use that instead of your social on the W-9. You could prepare this ahead of time or send with your first invoice.

I would include a clause in the contract that the deliverable is the converted excel file, the scope of work is converting the excel file and that you retain the exclusive rights to code developed to make the conversion.

Google convert excel for 'name of their inventory software' if it's a popular search/topic. You might be able to setup an online conversion tool that you could charge companies a one time fee for converting their file online. Might be a fun project for you and a potential money maker.

Good luck with your first freelance project.

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