You have included 4 weeks of holiday, but not sickness, training courses, conferences, company admin, next contract sales and worst of all bench time between contracts.
My calculation are you are down to 45 weeks after 5 weeks holiday and UK bank holidays. Add 5 days for illness, 7 days for courses and conferences, 1 day a month for admin, 3 days every 6 months for sales, and suddenly you are down to 39 weeks. Add at best 2 weeks of bench time as lining up new contracts perfectly is tricky and you are down to 37 weeks.
£350 * 5 * 37 = 64,750 before tax.
Then it is the whole consideration of whether you are within IR35, which basically taxes you more than a normal employee, and is very difficult to not be within if freelancing on longer contracts in the UK.
Then accounting, insurance, hardware costs etc.
You would have to be on some real long term contracts without benchtime, no illness, no training and no expenses to get towards you numbers.
Working in Shoreditch myself I know most of the decent developers with 10 experience around here are earning a lot more than a contract guy would make on £350 per day.
Freelancing is different. You have to deal with all of the issues you mention above, cost of sales etc (though, get yourself an accountant, seriously) but the reward is higher. You're doing things at your own pace and if you're good you can really focus to make solid profit.
Contracting is just a regular hourly wage (and as you rightly point out, not always as good as it looks on the tin).
IR35 is a good point. If you have multiple contracts and don't work in any one place for more than two years you should avoid any questions around if it's really a contract or not. Most employed coders I know hardly stick around in a place for more than two years here in London.
Also who gives a fuck about money above 50k GBP? If you're young work a cool job, meet interesting people and learn lots of new stuff. Freelancing is almost never that. Working at a startup is, provided you pick the right one.
Not my experience. Freelancing is what you make of it. To get some experience you may do some boring stuff early on, but if you've got no or little experience your 'startup' will likely fail.
90% of the freelancing work I've done over the last few years has generally been 'learning new stuff' and 'meeting interesting people' in somewhat challenging problem domains (trucking logistics, education, etc).
"Working at a startup is, provided you pick the right one."
Freelancing is what you make of it. Find interesting projects.
Now, since (good) employers often manage to look past a lack of credentials and connections, I was able to get a great job at a YC startup (run by entrepreneurs with past successes/exits). They're taking a chance on me, which almost never happens with freelance work (especially not if there's a dude with 10 years experience competing with you).
And also I would argue that is much easier and quicker to find a good startup (just go down the list of YC companies) than to find amazing freelance work.
I'm suspecting that you had a hankering to work at a "startup" and that colored your behaviour. I know many people without any major credentials who are doing just fine in freelancing, making good money doing what they like to do.
Never bother with odesk - you wouldn't have gotten a YC-startup gig on odesk - why look for anything else there? Work your network/connections - if you don't have any, build them up - that's what takes time and effort.
I also suspect many people on this forum (and on specific topics) are 'startup' focused. While there's nothing inherently wrong with that, I do feel it sets a lot of people up for failure ("fail fast! fail often!") when many of them aren't psychologically or financially prepared for so such failures. We rarely read about the failures of people who attempt 'startups'. Even when we do, it's often a post-mortem look from someone who's now writing from a position of success, reviewing their own failures in public for others to see. The implicit (sometimes explicit) message is "see, even if you fail, you can be successful later in the same space".
Good luck to you on your journey.
>Work your network/connections
That's exactly the issue. I didn't have that. At all. Before that I just hacked on stuff because I thought it was fun / interesting. I also came from a tiny country without a tech scene.
>I'm suspecting that you had a hankering to work at a "startup" and that colored your behaviour.
I do love startups. But I before starting my job search I spent about a month trying to figure out freelancing. In the end I decided against it (for reasons listed above) and went onto what I -- at the time -- considered the second best option: employment.
It was a great success. Instead of trying to cold-email people for dev-scraps that are so un-important that they'll let someone with no degree and no industry experience and no references work on it vs. someone with a CS degree + 5-10 years of industry experience + heaps of people with impressive business titles who can recommend his work and doing whatever crappy work I can get my hands on just to "work on connections", I now get to work every day among a set of incredibly smart, compassionate, warm, successful people who want to invest in me and want me to become the best programmer and contributor that I can be.
That's why I chose the employment route: Once you're in, you're in and you can focus on what you love and growing yourself instead of constantly having to worry to put food / contracts on the table.
If you're a consultant, spending time establishing thought leadership etc etc then yeah, but you'd be crazy to work for 350 per day in that case.
This has not been my experience. I've been doing this for years and I don't think I've ever spent more than two weeks looking for a gig. Even during the current crisis the market is great for developers (here in Denmark at least).
These projects have typically lasted three or four months. That makes me enough money to live off for the rest of the year which I have then spent travelling and working on my own projects.
If my math is right, that works out to about $70/hr (USD), which is well on the low side for a 1 year contract, even assuming you're out in the sticks. That's closer to what you'd expect for a day rate as a salaried employee if you have any experience.
So no, you need to take on board that this is the sort of money you should be making. If you're not (and by assuming that only magical freelancers make that much, but only for a few weeks at a time, it sounds that way), you'd be well served to spend some effort getting your rate up where it belongs.
We'd actually all be better off were you to do so. As long as there are people willing to work for GBP65k/year, there will be companies taking advantage of them. But those same companies will happily pay market (as plenty of us can attest) if they have to.
Money doesn't motivate me. I thought it would. Made a bunch of money (much more than me or anyone I knew made) doing IM stuff. Turns out what I really wanted was interesting peers, people who I could become long-term friends with, learn from and share experiences with. Freelancing doesn't offer this, finding the right people and working with them at a company however can.
>But those same companies will happily pay market (as plenty of us can attest) if they have to.
>market
You use the word market as if you knew what it meant, but apparently you don't. Developers being happy to accept lower rates than what they could make freelancing means there's some mysterious, secret value-offering that becoming part of a team offers humans. For a lot of people that's stability. Or because becoming an employee is the "normal thing to do". For me it's much more. And I imagine for many of the most brilliant programmers who are alive today (of whom almost none earn their living as freelancers) as well.
Someone with 2 children in private school.
£350 * 200 = £70000 before taxes, I think £84000 is overly optimistic here.
Also, which startups here in the UK give you 12 weeks off a year?
I think I worked more than 200 days in the end, but I like to calculate pessimistic and be positively surprised at the end of the year.
OK but then also maybe forget HN and entrepreneurship?
I have met some talented developers who are keen to build a business of their dreams. I'm glad they're doing it as (1) they are trying to reach their goals in life and (2) they aren't competing with me for work :)