Quit My Job For Consulting: Two Months Later
stevekle.in
stevekle.in
Let's suppose that a full-time developer is paid $120K/year. (There are developers who get more, a lot who get less, but this gives us a nice round number to work with.)
When you add up benefits, taxes, office space, etc, the average employee costs 2x their salary. So that developer probably costs $240K/year.
You tend to work about 50 weeks per year, so that's about $4,800/week.
You work 5 days/week so that's $960/week.
After you get rid of lunch, discussing the weather, HN, etc, you're probably only putting in 6 hours of actual work per day, so that's $160/hour.
Therefore an employee who makes $120k/year is likely costing the employer $160/hour. As a contractor you have to bear those costs that employees do not. Plus you have to bear costs such as not getting paid for the time it takes to find more work.
Most people who contract do not charge enough. Perhaps after running through these sample numbers, you'll do the calculation for yourself and ask for a more realistic rate for what it costs for you to be a contractor.
A rough rule of thumb is to charge 2X of what you would be paid as an employee.
That's a common rule of thumb, but I suggest that it's not a good mindset if you're interested in making what you're really worth as a freelancer.
One of the most fundamental differences when you're negotiating with a client as another business rather than as a prospective employee is that your arrangement will be a business to business one. Like any other such arrangement, it pays to price based on what your contribution is worth to the client, which will ideally be much more than what it costs you to provide it.
+ They can keep you for exactly as long as they need you, and then let you go, with no hard feelings.
+ You don't require a 3 ~ 6 week spin-up period as you get used to e.g. how your new employer uses source control, the procedure for running acceptance tests, or the proper way to fill out requisition forms.
+ The search to find you took days, not months.
+ The interview(s) to bring you in takes one person minutes/hours rather than several people days.
+ The paperwork to bring you in takes minutes, not days.
+ There are some specialties where FTEs for that specialty are either a) extraordinarily expensive or b) unavailable for hire at essentially any price. The business might not be able to justify keeping one of them around for the year, if for no other reason than their salary would upset the apple cart with other employees, but might still get value out of tactical engagements.
+ Employers and employees have an expectation that employees will occasionally have issues which temporarily impair productivity and that this is just the nature of the beast. ("Dad is in-and-out of the hospital and I'm mentally checked out.", "Off to JavaOne this week.", "I'm pregnant, cya in a few months.", "We sprinted hard for the last six weeks and I'm in cooldown mode.", etc) Consultants sometimes have impaired productivity, too -- but employers don't have to pay for it, since consultants will typically attempt to avoid scheduling engagements during them.
* Consultants put up with a lot of things by charter which are socially awkward to ask of employees, for example, "We need you in Berlin the day after tomorrow."
Its my goal to one day work on a per-project basis, I haven't quite figured out how to make a go of this yet, however I really think this is how most software should be done for anyone with a few years experience under their belt. Working software is valuable and if you can commit to something and deliver, the concept of time should be immaterial (outside of meeting a deadline)... its all about value delivered. By tying ourselves to hourly billing rates, I think software development as a profession is held back and part of the reason it may not be as well respected as it should be by "business" people. It takes standing up and proclaiming the value that you bring every now and then to make people realize this isn't an assembly line type of job and never will be.
For a long time I've been playing around with how I charge; a few weeks ago we had a discussion r.e. hourly vs. daily rates (I prefer the former, as it works best for me).
But in the last ~2 months I've been working on ways to charge on a target basis. Or to put it another way; I agree a schedule with my client, and they pay as I reach each milestone.
This takes time almost entirely out of the negotiation.
It has other benefits too; for example it forces the client to work on a formal specification (as an engineer, this is crucial!) for a project.
I have flexibility on how I reach the goals we agree - I might give a deadline estimate (two weeks for milestone 1, a further week for milestone 2). Whether I do the work on a Monday, or part of Weds and Fri, is irrelevant to them. And so I have the flexibility to schedule all of my work as is convenient.
Internally I am figuring out that it requires X hours work for each milestone - but the client never sees this, they just see my quoted figure and the delivery date. But I have found that this way I can up my rates significantly - I suspect because clients are measuring cost in terms of deliverables, rather than hourly or daily rate.
I spent a lot of time working up my rate from £40/hr (three years ago) to £100/hr through various mechanisms. But I have struggled to breach that barrier for a while now. My ultimate aim is £200/hr (which, as a full-stack engineer with years of experience & happy clients, is what I think my time is worth). This new method is currently "testing" at around £120/hr and I am slowly increasing it, without issue so far.
This also helps for existing clients too; if you start working with someone at £40/hr it's hard to build your rate up significantly without putting them off [I lost a very solid client on the jump from £60 - £100]. But if clients don't know your rates, upping them by £10/hr will be much less visible, and they only have to judge whether the total cost is worth the outcome.
So, I think I would be happy in saying - your theory is sound, and seems to be working out for me in practice :)
Better yet, you should give quotes for the whole project, regardless of time spent. If you spend less time than anticipated, good for you; if you spend more time than anticipated, you bear the cost.
But here's the thing: most clients have NO IDEA how much work goes into a specific task. If you bill by the hour, they will want their money's worth of your time. If however your quotes are for the whole project, the only relevant metric becomes "is the project done?"
For this to work, the project has to be specified with a reasonable amount of precision that allows one to check at the end whether it's done or not; but this extra work of specification pays off big time -- even, I might add, if you have to do it yourself for free, as part of the sales process.
This is good advice. I've found that this and working with solo people paying out-of-pocket works fine (providing you get some assurance of payment - I usually get 50% up front). The worst clients I've experienced tend to be people who run a business with 5-10 employees but still have enough time to work with you directly. I work with these types of businesses least but in 3 years of freelance work I've had 3 screw me over.
Here's why I think it happens.
People 'playing with house money' will pay whatever it takes to get the job done because they are removed from the money - it isn't theirs.
Solo people who want work done (usually a website or app idea) want a completed product after paying you half up front. They don't want to bail because they want something to show for their money. They probably can't afford to lose the 50% and get someone else.
The small businesses I mentioned can afford to lose the 50% they pay up front (unlike the solo people). So if what you are doing doesn't meet their exact (constantly evolving) standards they are happy to kill the project. I've found these people constantly make changes to what they want and add extra features (which of course, they say 'just add to the bill'). I try my best to avoid these clients now.
Yes, the money isn't "theirs"--they don't open up their own wallet to pay you--but they also NEED TO SPEND their budget. A budget that isn't spent at the end of the quarter/year/whatever simply vanishes, and it's actually harder for that person to request a same-size budget next time (they will be asked why they need the money if they didn't even use it all the last time around).
[large-ish image, but doesn't do it justice] http://upload.wikimedia.org/wikipedia/commons/d/da/Mitchell_...
[another larg-ish image, likewise you need to see for yourself] http://upload.wikimedia.org/wikipedia/commons/0/02/NYC_Publi...
Some people don't have an established work-space in their home. For many, trying to work in the same place you relax and/or play computer games usually results in an inability to focus.
Even if I did have an established work-space, I'd still have trouble concentrating.
My reply was offered as an explanation to: "Why would you want to work from the library or coffee shop instead of working from home?"
The trouble I encountered was working as a web dev at a marketing agency before. They were strict about working for "potential clients", which meant anybody with money...
My advice: Get at least 5 projects lined up for the foreseeable future (next 3 or 4 months) and also save up about six months of money for bills and your normal expenditures minus savings.
This will help you invest in a business for at least, 8 to 12 months, working with 5 or 6 projects and tiding your other 6 months with savings will be the worst case scenario. Best case you find more clients and don't even get to touching that money.
I worked from home for the longest time, and it can be a lonely endeavor. The best mix I've found is home 75% and 25% on site. You get to interact with real humans once in a while, but go back to no distractions.
Friendly tip: If you have small children, forget it. Get an office space.
Also: Get a good accountant -- pay yourself a reasonable wage and take the rest in distributions at the end of the year in a tax-deferred retirement account. I aim to retire at 55; so far, I am on target.
This is necessary b/c unless you have a dedicated team of people -- each who is good at a respective thing, you -- as a consultant, will just be expected to get it done...quickly, and with high quality.
You can do consulting in your own comfort niche. I choose not to do that.
To add some color, it's likely there are already design/development shops in your city if you live somewhere with any kind of technology presence. If you don't know of any, go to local meetups in the web space and ask around about which ones are local to you.
As was previously mentioned, many development shops subcontract out work to local developers. Talking to them at meetups or sending an email letting them know you're interested in working with them is a great way to kick off a conversation that could lead to you working with them.
1: Open a web browser (look for a blue E icon, or a red/yellow/green circle, or an orange fox circling a globe)
2: In the address bar, type "www.google.com" without the quotes and press enter.
3: In the search bar of the page that appears, type "CITY web development" again without quotes and substituting the city you live in for CITY.
Steven was right, the point I was making a point that I've found contacting local agencies/houses to be most successful, probably due to the fact it's easy to meet face-to-face and go in to their offices when they really need the extra help.
I completely agree with breaking up your time into blocks. I try to keep my schedule to 4 hours in the morning of heads down coding (9a - 1p), 4 hours in the afternoon of heads down coding (130p - 530p) and 3 or so again at night (8-11/12).
The other time is for me to do tasks which are relevant to coding but not actually coding, significant other time, or whatever I need to get done so I can think straight during those coding sessions.
I don't answer email while coding, or give in to other distractions. The reason being that I have scheduled time for that and its coming up soon. Anyways, back 2 work ;)
It sounds insane to me. Do you work on week-ends too?
Weekends are mine.
From my experience it seems everyone is happy (especially if you throw in daily invoicing). It's easy to avoid deadbeat clients this way and you have more consistent cash flow this way. If not consistent then at the very least it is predictable since you can see how far into the future you can book days.
*: The abuse referred to here is for clients to keep requesting changes when they pay fixed-price. They are of the mentality that it is unlimited changes, and it is often difficult to draw the line on what is a billable change with this approach. Hourly can result in a professional delaying things to rack up hours.
1 - How important is it to have some sort of public profile (eg, High ranking StackOverflow account, Github account, well trafficked blog) or public portfolio? I've done lots of good work as an employee but almost all of it is on internal corporate networks.
2 - Where do you find the all important first few customers? Should I be going to every local users group I can find and handing out business cards? Or hitting up sites like http://www.guru.com/ ? What worked for people?
3 - What size jobs are feasible? I would like to start this on a part time basis while still working my day job. Is it possible to find jobs small enough to keep me working 1 or 2 days a week?
2 - I found my first client on oDesk, and they referred me to just about everyone else. I haven't used it since, and it's thoroughly depressing to look at how low pay the jobs are. Posting in the HN freelancer topic, and posting an ad on /r/forhire is another good way to get clients.
3 - Whatever you want - there are tonnes of people that need software building (and plenty that don't even realise it). Just remember that a few hours of time can quickly get eaten by emails, phone calls, "can you just check this", bathroom breaks, leg stretching, quick drinks etc. It takes a while to get in a good rhythm.
1) Coworkers to chat tech with/enjoyable rapport/shared nerd-citement
2) Far clearer separation between workspace and playspace, which is really just a catalyst to get your brain in the right place (similar to one popular argument for wearing suits), but whatever works
3) Better bennies (U.S. healthcare scheme, I hate you, even if I also like not paying 50% of my income to tax)
4) People available to fill your gaps in knowledge or weaknesses
5) The fun of mentoring/helping others
6) More likely to travel for work now and then, which is kind of fun
7) Being at home day-in and day-out got me depressed. In my region on earth we have changing weather and it is not always feasible to get outside.
In short, people work for companies for a reason and that reason is not always "i live paycheck to paycheck and have no other option"
>> end up with 1 or 2 primary clients for all of your work
I've so many questions I'd love to ask an experienced freelancer:
- Who actually writes the contracts, you or the buyer?
- What does a sample contract look like?
- Do you use a résumé or something more like a sell sheet when approaching buyers?
- In what city are you working?
- Big biz vs. startups?
- What is your on-site vs. remote work ratio?
Who actually writes the contracts, you or the buyer? What does a sample contract look like?
I joined a professional group that provides a variety of useful services, including starting points for common legal documents written by actual lawyers with actually informed notes about using them. So far I've not had a problem getting any clients to sign some usually simple variation of one of those documents. No-one has ever offered me a contract they'd written themselves; that sort of thing usually happens on larger scale projects than individual freelance/consultancy work.
Do you use a résumé or something more like a sell sheet when approaching buyers?
Ideally, neither. The best leads often come word-of-mouth via friends/colleagues in the early days, and then via referrals from former clients later as you build up a track record.
In what city are you working?
I'm based in Cambridge, UK. Some clients are too, others are further away, but all UK-based in my case.
Big biz vs. startups?
Ideally neither, if you're just starting out and going into freelancing alone.
Big biz is full of overheads and is notoriously bad at paying on time, and you won't be in a position to take advantage of the other side where big biz has big budgets available if you get to the right people and present what you offer in the right way. Your mileage may vary, but realistically it probably won't for quite a long time, unless you have some really compelling advantage that most people don't before you turn freelance.
Startups have the opposite problem. There is a much higher risk than average of working with people who lack professional experience and have wildly unrealistic expectations, who have relatively little budget to spend and therefore penny pinch at every opportunity, or who want you to put in the same kid of effort as they do when they own the business and you're just a freelancer who can be dumped in the time it takes to write a letter.
Obviously those are stereotypes, but if I were you, I would aim for the safer middle ground until you've learned how the game works. There are plenty of small/mid-size businesses who are established enough to have sensible money available but not big enough to have dedicated in-house people for everything. If you can get a few decent clients like that and do good work for them, you have a fair chance of repeat business and/or referrals that brings some financial security. If you keep your ear to the ground, you'll also start to figure out where you can really contribute something valuable, which in turn you'll be able to charge for at rates they consider fair even if they're way above what you thought you were "worth" because you took your old salary and multiplied it by 2.
What is your on-site vs. remote work ratio?
I work exclusively at my own facilities day to day, though I'm happy to make visit clients for meetings, presentations, on-site testing, or other useful activities that work better if everyone's in the same place.
This has a number of major advantages, including not getting dragged into areas outside my role or, heaven forbid, the politics in your client's organisation. Another big advantage is being able to take on multiple projects concurrently, which can be very useful if they are useful projects but no one project consistently provides the equivalent of full-time work. And of course, you get complete freedom in choosing how to set up your working environment, tools, usually working hours, and so on, which is a huge win for work/life balance and was my #1 reason for going freelance originally.
(1a) With that said, when the the client pushes back on using your MSA (2 out of 3 bigcos will), bite the bullet and use theirs, because you will rarely win that fight. You need a lawyer to review these.
(1b) You're not negotiating or reviewing contracts until you have the "verbal" commit that you won the gig. It's called a "verbal" because the "written" is the contract negotiation, which you wouldn't waste the money on unless you won the gig, so you need a verbal.
(2) Grab one off the Internet. Generally, for your benefit, the master will specify a term, a venue (disputes resolved in your state), compensation terms (net-30, etc) though note that the master will usually refer to a SOW for the actual price, and limits to your liability. For the benefit of the client, the contract will make it crystal clear that you are 1000% a contractor and not not not a full time employee I say it again not, assign all intellectual property generated during the engagement to the client, and possibly require you to maintain professional liability insurance.
(3) You write a proposal. The proposal usually has bios at the end of it. A bio is like a less formal version of a resume.
(4) Chicago, NYC, and San Francisco, plus all over the country.
(5) Wide mix 'o both.
(6) Something in the neighborhood of 40/60?
I just want to emphasize, for the benefit of anyone new to contract work, that even a reasonably well drafted contract you find on-line is probably only worth starting with if it was designed with your particular jurisdiction in mind. The rules on tax, employment status, liability, intellectual property and many other factors vary widely from place to place.
For example, Thomas mentioned being clear that you are not a full-time employee. That's a very important point, but here in the UK, merely saying "I am a freelance contractor and not an employee" in your contract will be worth about the paper it's printed on if HMRC start investigating whether you are caught by IR35. There are all kinds of rules and precedents that will override such a statement, and paying for 15 minutes with an accountant or lawyer who knows them could save you thousands of pounds and avoid the stress and inconvenience of a lengthy tax investigation.
It is very important that clients use a carefully reviewed consulting contract for reasons like this.
It is pretty important that consultants get client paper reviewed before they sign it; we've seen some scary things in client MSAs.
It is probably not all that important that consultants optimize their starting-point MSAs, at least in the US.
Ah, but this is exactly what I'm talking about with regional differences. Here in England, getting the contractual terms that affect employment status correct is extremely important for the contractor/consultant as well, and "terms that affect status" can potentially include almost anything depending on context.
If you don't, and consequently HMRC decide that you are a disguised employee under the IR35 rules, then you can be stung by the worst of both worlds: none of the perks of being an employee but all of the tax liability. To add insult to injury, your client is likely to get dinged for employer's NI as well at that point, so I suppose in that sense you're right that these terms are partly there to protect the client as well.
In case you're not aware, IR35 is a controversial set of rules that in principle stops people who really are working as employees from dodging certain taxes by claiming to be freelance contractors instead. The trouble is, the rules are notoriously vague and significant numbers of people who really are working as freelancers in a meaningful way also potentially fall within their scope. The Professional Contractors Group, which now has many thousands of members, was originally founded just to oppose that particular set of rules. These days, successful IR35 cases seem to be about as rare as unicorns, but that's partly because every legitimate freelancer with half a brain does take advice on how to structure their agreements to make their status as clear as possible.
Not that any of this negates your other point that you should certainly have any agreement proposed by a client properly reviewed, of course. I'm just trying to point out that even the most basic assumptions about who different clauses are there for don't necessarily hold from one jurisdiction to another. That might be obvious to you and me, but to someone reading this discussion who's thinking of going freelance for the first time, everything is a learning curve.
Just reading this makes me wonder how any person on this planet ever manages to successfully exchange work for pay. How did we get to a place where governments go on and on about "creating jobs" but it takes a double major in law and finance to legally work anywhere anymore?
</rant>
The one positive thing I will say on this point is that once you've been through the major formalities the first time (setting up a legal company entity, getting your first contract written and signed, filing a year's worth of whatever tax records you need in your area, any other annual paperwork like the Companies House filing in the UK), it's usually not as bad as it sounds. The first year or so is quite a learning curve, but as long as you're reasonably organised, habitually keep accurate records, and are willing to pay for a modest amount of professional help from people whose job is to stay up-to-date on technicalities and recent changes so you don't have to, the overheads are rarely more than a half-day a month, at least here in the UK. It requires diligence, but not a PhD in rocket science.
* If you have subs, include provisions that your clients won't hire them behind your back. Make sure that it's clear that they own the IP once they're paid in full. Payment terms.
* I haven't had a resume in years, my sales strategy: referral or chance meeting (business mixer, etc.) -> conversation -> contract.
* Chesapeake, VA. A bedroom community with virtually no technology scene.
* I used to do work for a lot of funded startups out of SF/NY. I now only work for profitable small businesses (I need to be sure that the work I do will end up making the client more money than they spent.)
* 100% remote
bdunn will be presenting on his book "double your freelancing rate" at the upcoming http://indieconf.com in Raleigh, Nov 17.
"Send me your standard contract or the company I consult through has an MSA and we'll attach my mini-proposal as a SOW."
sample contract
Varies widely based on your locality. In Japan it's literally shorter than this post is. In the US most of the ones I've seen are 2~3 pages long and most explicit about IP assignment, for the obvious reason.
resume
I'm sufficiently well-known to decisionmakers at my clients that the conversation is generally more about what I can do for them than where I went to school or what the exact name of my previous employers were.
city
I live in Ogaki but work across Japan, the US, and (very occasionally) Europe.
big biz vs. startups
Software companies with $10 to $50 million in revenue is sort of the sweet spot for me: ability to pay like megacorps, agility/relative-lack-of-process-BS akin to startups.
on-site or remote
First engagements are probably 90% on-site, existing relationships closer to 50/50.
Try for 5.5-6.5.
From previous experience, 80% productive time is considered high-acceptable and 60% is getting to the low end. Depends on your role as well.
Also as a general rule, cost multipliers are important. Standard multiplier of 2.3x of costs (then margin on top) seems to work out about right - longer term / safe / secure projects can go a little lower if you know we can bill consistently, a higher multiplier if the work is less certain / short term.
I'm curious on how to do a fair calculation on this because, to be honest, I do spend a lot of time (that can't be calculated) thinking about the problem at hand, etc.
Anybody who is thinking about how many hours you spent "thinking", "noodling", "coding", "typing", "documenting", "eating lunch", "reading web comics", or "posting on HN" is a client you need to avoid.
I am having somewhat of hard time working with clients who do not want fulltime though because:
a. Even though they pay only 20 hours of my time, they assume 100% availability. b. It gets awkward with them when they suddenly want to increase the hours but I have already committed my remaining hours elsewhere.
If you can find a client who only wants you for 2 hours a week, would you take it? I wouldn't.
You need what's called a retainer agreement. It will specify an exact amount of time they have to pay you for every X, as well as specify availability and charge for it. It will literally specify what availability you have to give them, and how much they are paying, specifically for that availability, and that you are working for other clients and will not necessarily be able to change the terms of the agreement without several weeks/months notice.
(Additionally, retainers are often paid in advance, not arrears :oD, and charged wether they have work for you to do or not)
If you're constantly pulling 60 hour weeks (about what you have to pull to bill 40 honestly), you're likely delivering what I am pulling 35-45 hour weeks, billing 25-35, but at a higher cost to your family/health/rest of your life.
That's not adult. That's slavishly burning yourself out in your early years.
Study: http://www.hcgexperts.com/scheduled-overtime-effect-on-const...
I guess I will have to try it. The Southern African market may not respond to it so I will have to think of the upsell.
What he is talking about is how difficult it is to work enough "hours" when you are contracting. If you work for a company they pay you to be at your desk 9-5, sure. But in that environment 10 minutes talking to a co-worker as you get a coffee, 15 minutes trying to get the damn printer to work, 5 minutes dashing up to the next floor because the toilet on this one is busted... doesn't matter that much.
When you work as a contractor targets are much more immediate - and if you don't get a days work done on a project that starts to pile up. It's crazy how little things can stack up; I didn't get "enough" done today, really, because the coffee machine in my kitchen was playing silly buggers first thing, and I got distracted fixing it (I know...). That took half an hour off my day and meant I had to try and make it up this evening... but with one thing and another...
Going after that type of client often means the work itself isn't as interesting, but it's great advice when you are getting the momentum (and savings account) going.
Not only this, but separating your work environment from your living environment can help you (a) focus more while working, and (b) not think about work when not (from my own anecdotal evidence). After a few years working from my bedroom, I decided to rent an office a short walk away from my home. It reduced 12 hour work days with 5-6 hours of actual work to ~8 hour work days with ~7 hours of actual work done.
YMMV - local Starbucks, coworking space, or a separate room in a house could work equally well, but IMHO, having a dedicated work space definitely helps.
(EDIT: corrected typo, "20" -> "12" hour work days).
1. Search my comment history. You will see all of the ads I've posted. From the ultra conservative to the crazy "code with me maybe" fiasco that got me more hate mail than Hitler, but also got me a lot of work (a lot). I'm not afraid of being different and of standing out. Though this requires a flame suit.
2. Talk about what potential clients want to read about. I always talk about how my focus is on shipping. It really is. I dont stop working until the damn thing is done and out the door. Turns out, that is not very common with programmers these days. They are too busy dreaming of perfect code and arguing with each other about how Go deals with errors. Like I said, talk about what they want to read about (most of them just want to make sure you can and will deliver).
3.Do write a good headline. My best one so far reads "I ship software." Simple. To the point. And will make them read the rest of the ad.
4. Talk rates right there in the ad. Disqualify people right from the start. You dont want to waste time with people looking to under pay you. Plus you will chase away any dreamer who will gladly give you 5% of his made up company in exchange of "just some code." The higher the rates, the less shit you have to deal with. Honestly. I currently charge $100/hour with a minimum of one week of work. Thats $4000 a week if you want to hire me. But you do get someone who delivers. I have no problem getting paid that amount.
5. Make yourself available. Skype, email, phone. Just answer and take time to talk with clients. Let them know you will listen right there on the ad, and then follow through by listening.
6. Offer them a free 30 minute consultation. This helps both sides because it will give you a good chance to feel the client out, and same for them. Chemistry is very important when doing consulting and a free consultation is a great tool to use for that.
Good luck, and get in touch with me through email (in profile) we can always bounce ideas off each other.
Also, I took a quick look through your comment history. Perhaps you are being to subtle for me, or perhaps you just post to many comments, but I don't see to many ads for your services there
http://news.ycombinator.com/item?id=4463748
(1) Say that you can do everything
(2) Be cheap (he starts at $200/day)
(3) Offer something for free
(4) Talk about "shipping" a lot
I'm not sure I would want to attract the sort of clients he gets.
1. I can't do everything. But I can deliver 99% of the work needed out there.
2. I started out cheap. Current rates are at $100/hour with a set minimum.
3. Offer them a chance to get to know you for free.
4. Talk about what they want to hear.
I'm not sure I would want to attract the sort of clients he gets.
You mean you don't want to work with great people? People like Mark, who is focusing on disrupting the online payment industry. Or maybe even Robert, who is getting amazing growth through a simple Facebook statregy. I mean, of course I want to work with them. They are just amazing.
Maybe you just want to sit in your office all day, writing yet another interface class. Not me. I want to be where the action is.
I'd say its 40% HN and 58% networking with a 2% chance of rain.
If you do anything at all approaching good work, then 5 of your points are meaningless, and it basically boils down to "Talk rates right there in the ad, if they're as low as $100/hour."
If I decided to start freelancing, I would take the per-day strategy and charge no less than $1500 per day. I would plan to work about 200 days per year, to pay about $100,000 in taxes, about $5,000 in health care, and another $15,000 toward retirement. That leaves about $117,000 in take-home pay, which is only about 50% more than I take home now (and actually probably less than any Google engineer). Any less than that, and it just wouldn't be worth it.
Whoever wrote the contract will have the advantage. Even the Nolo book provides each contract written from the perspective of the client vs. consultant -- keep that in mind.