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Comment by cheetos | Hacker News Reader

I freelanced full-time for several years. I had similar experiences.

I found that the key was to find clients who value your work. Working with individuals or small businesses can be tough because they are usually highly constrained by budget and do not understand everything that goes in to what you do. They want freelancers because they can't afford full time people. They will compare you to the rates they can find on Craigslist or Elance and balk when you require market rates.

Instead, find startups with technical people doing the recruiting or large companies with established roles and processes for freelancers. They will at least understand market rates and what you actually do.

You also need to have the power to say no to clients. That usually means savings and the willingness to wait long periods between jobs in order to find the right one. For me, the hit rate of was 1 out of every 8-10 job opportunities.

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If you wait long periods of time, does that not reduce your overall hourly rate? Because if you are doing nothing your hourly rate is $0. With such a strategy can you make as much as someone who is full time employee or someone who charges much less but who is filling most of his/her hours?

It's a long term game plan. I found that by substantially raising my rates, yes, work was slow in the beginning. But as time and my rep spread, I now find myself at a comfortable level of work, and gre at money as well. If the trajectory keeps going this way I may double my rates again, even with prior clients. If you produce more value for them than they pay, the good clients will pay. Especially after they switch to someone cheaper and don't get the value they are used to.

Do not bill hourly. Bill daily.

If you bill daily, how many hours would you work per day ? 8 or 10 or 16?

This comes up every time people ask about billing daily. You're not billing hourly, you're billing daily, so the number of hours you work doesn't matter.

Some days is 4 hours, some days its 8 hours, some days it's 10 hours. Do more 4 hour days. You're probably only productive for the time period, anyway.

Do not bill daily. Bill per project.

I like project billing, but the upside of time & materials billing is that your time gets a fixed valuation at the beginning of the project. Project billing puts you on the hook for things that come up unexpectedly during the project.

Both are better than hourly billing!

Only if you never learned the lesson of feature creep on a fixed budget project. Always put a limit on the time you spend.

Of course! The great thing about project-based billing (in my opinion) is that it forces you (and your client) to come up with clear requirements at the beginning of the project, and anything extra is an additional scope of work. Of course if the requirements are unclear, hourly would be a better option.

I agree with the value based pricing concept but I don't think it's _always_ effective for newer freelancers or larger projects.

For newer freelancers, it's important to be able to establish an hourly rate that meets your financial goals. For most, that would include a salary, expenses and then profit for your business. After you're receiving steady work at your base rate, you can start experimenting with daily billing, project based billing, increasing your hourly rate and so forth. But it takes time to get there.

For larger projects, there's inevitably scope creep and project based billing can be dangerous. I've been burned a number of times on large projects and now I put a "10% overage" clause in my estimates. If the time to completion is more than 10% over my estimate the project immediately jumps into hourly billing. It opens up a conversation very early on and sets an expectation that my work is not an open checkbook.

No. The purpose is to build quality business and reputation. One of my strategies is to work remotely on stuff I don't particularly love, make sure it's not full-time, and work part-time on developing a reputation locally for what I really want which sometimes leverages other work that I've done.

Initially, it does. But once you get repeat business and referrals at a higher rate, your net rate goes up again.

"Working with individuals or small businesses can be tough because they are usually highly constrained by budget and do not understand everything that goes in to what you do. They want freelancers because they can't afford full time people."

I've also found this to be very true.

When I'm evaluating clients I consider whether or not the person writing the check is using their own money. More mature clients often have a marketing director or employee that has a budget. With entrepreneurs and small businesses, you're often speaking to the owner and they tend to care more about how much something costs. It's just more difficult.

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