4 Freelancing Mistakes That Are Costing You Cash (and How to Avoid Them)

Making the leap from being a WordPress developer in your spare time or for a boss to going freelance is daunting but exciting. If you’re like me, when you go freelance your focus will be on the work and not on the business side of things.

But thinking like that could be a big mistake. Once you make that step to becoming a freelancer, you’re self-employed and you’re running a business. You might even choose to set up your own company, which gives you even more boring business things to think about.

It’s not exciting, and it’s not the reason most WordPress developers decide to go freelance. But it is important. If you’re going to earn a living, be successful and stay sane, there are some basic business aspects of freelancing you need to get right.

In this post I’m going to identify four common mistakes made by freelancers when they’re starting out. I’ll give you some painful examples of where I’ve gone wrong so you can learn from my mistakes. I’ll quote some experienced freelancers who know how to get things right. And I’ll give you some tips on how you can avoid these mistakes. Learn from others’ mistakes so you don’t have to make them, too.

Mistake #1: Undercharging

Let’s say you’ve been working for an agency or company for a few years. You’ve built up some experience and you’re an experienced, accomplished developer. Maybe you’re using WordPress in your day job or maybe it’s your sideline.

According to the employment agency Reed, the average web developer in the UK will be earning a salary of around £40,324, which equates to $62,500 at today’s exchange rate.

Assuming someone in employment is working 40 hours a week, this works out at an hourly rate of approximately $30. So you start out as a freelancer and decide you need to charge more than this to cover overheads.

You might add 50% to your previous hourly rate, giving you a rate of approximately $45 per hour.

Forty-five dollars an hour, you think to yourself. That sounds pretty good. If you put in the extra hours (as you probably did without extra pay when in employment), you could work a 50 hour week and you’d be earning $117,000. The dollar signs start appearing before your eyes and you’re already planning an exotic vacation…

But stop right there.

It Isn’t That Simple

Let’s take a step back and think about how many hours you can realistically expect to charge in your first year as a freelancer.

If you work that 50 hour week you can only expect to be charging for about 30 of those hours at the most as a new freelancer. In the first couple of months that might be less, as you’ll be chasing work. Even if you’re lucky and get plenty of work, you’ll still need to spend time on non-chargeable activities like marketing, sending out invoices, managing your time and professional development.

So let’s be generous and assume you can work 30 chargeable hours a week.

On top of that you need to factor in time for vacations and sickness. If you get sick you won’t be able to earn. Let’s factor in 5 weeks’ vacation and a week’s sickness.

So now you’re working 30 chargeable hours a week, 46 weeks a year. At $45 per hour, that’s $62,100. A lot less than the $117,500 you were dreaming of.

But there’s more. You’ll have costs and taxes to factor in. In your first year, you’ll probably need to buy a computer and you may need to pay for a course or conference or two. You’ll need to buy hosting and software and may have the expense of hiring a workspace. This can cost anywhere from $3,000 to $15,000 depending on your requirements: let’s assume $8,000. Now you have profits of $54,100.

Nothing is certain but death and taxes.
Nothing is certain but death and taxes.

Finally, there’s taxes. Exactly what taxes you’ll have to pay depends on where you are and whether you set up a company or registered as self-employed, but on $54,100 profits a tax figure of $13,000 is realistic (I’ve based this on tax rates for the self-employed in the UK, where I’m based).

So that leaves you with $41,1000.

That’s $21,400 less than you were earning in employment – when you were being paid 50% less per hour and didn’t have the stress and uncertainty of freelancing!

Working Out Your Rate

So, what does this mean? It means you should forget about what you were earning before when deciding on your hourly rate. Instead, use this simple charging formula:

  1. Decide how much you need to earn per month and multiply it by 12 for your annual salary. Think about what you actually need for rent, mortgage, bills, food, transport, living expenses etc.
  2. Add a percentage to reflect the tax you’ll have to pay, based on tax rates where you live.
  3. Add a generous estimate for costs. Don’t just guess this but identify exactly what you’ll need to spend money on: equipment, software, subscriptions, phones, conferences etc. Include insurance and pension costs, too.
  4. The figure you have now is what you’ll need to earn each year. In your first year, you might decide this can be less than you previously earned, which would be realistic.
  5. Divide that figure by the number of weeks you’ll work per year, not forgetting to factor in time for public holidays and sickness.
  6. Finally, divide that figure by the number of hours you can realistically expect to charge each week (I’d suggest a maximum of 30 but 25 might be more realistic in the first year).
  7. You have your hourly rate.

So if you want to earn $62,500, you’d have to charge $73 per hour. Whether you can charge that as a new freelancer will depend on your experience, but it’s over twice the average for WordPress freelancer rates.

Try using rate calculators to help you with this: yourrate for a very simple calculator or beewits for a more detailed tool taking your lifestyle into account.

Mistake #2: No Contracts

So, you’ve decided on your hourly rate and it’s a realistic one. You’ve found a few clients who want to hire you and are prepared to pay you to work on their projects.

Finding your first freelance client is incredibly exciting: it’s the start of your new career and gives you a huge confidence boost. I remember getting a call from a brand new client on my very last day at my old job. I couldn’t wait to get out of the door and start working for that client! My old boss was pleased for me, too, as it meant she didn’t feel so bad about me being made redundant!

But again, you need to pause and take a breath. Before you get carried away with the excitement of finding your first paying client, you need to make sure you have a few things in place.

However much you like that client, and however trustworthy they seem, you need a contract. Even the best clients will experience cash flow problems themselves or may even go out of business. If that happens, they’ll want to find a way to avoid paying you, or at least to avoid paying you on time.

Anyone who’s self-employed or runs a business will tell you that cash flow is a bigger killer of new ventures than income: you can earn plenty of money in your first year but if it doesn’t come in as a regular income, then you won’t be able to pay your bills. Which could trash your chances of being a successful freelancer before you’ve even got off the ground.

Contracts, contracts, contracts.
Contracts, contracts, contracts.

So make sure your clients will pay you on time. Draw up contracts before each new project and don’t do any work until they’re signed. If the client needs work to start quickly, then they need to get those contracts signed quickly.

I was stung by this mistake once when I started out.

I was working freelance in my spare time while still in a job and I wasn’t too worried about the formal aspects of freelancing as I had a steady employment income.

But a few jobs in, I took on a retail client who, unbeknownst to me, was experiencing financial difficulties. I developed a website for them on the basis of a few emails and face-to-face conversations but didn’t take the time to draw up a contract.

Needless to say, when the time came for the client to pay me, I was very low down on their list of creditors. They owed money to some much larger, better-protected companies than me, as well as to their landlord. It took a lot of email correspondence, some unanswered phone calls from them (I wanted to get everything in writing), and finally a trip to their premises to pick up my payment in cash. Eventually, I got paid – but I didn’t get everything they owed me.

Heather Burns, a digital law specialist, stresses the importance of contracts:

 “It’s essential to have a contract in place – in fact, don’t do one click’s worth of work without it. A contract formalises your business relationship with the client, holds you to a professionally accountable standard, and protects you from predatory clients. It should address the nature of the business relationship, the work you are doing, and your potential liabilities to each other.”

Now I have a standard contract that I insist clients sign before I start work. This includes details of rates, overall deliverables, payment stages and what happens if things don’t go according to plan.

Some freelancers I know incorporate this into their proposals. The important thing is to get a signature up front. Learn from my mistake so you don’t have to make it!

Mistake #3: No Project Brief

You’ve taken on a fantastic new client. You’ve chatted in person, talked through what they need from you, and agreed on a price. You’ve got a signed contract and are ready to start work. Based on the extensive conversations you’ve had, you get down to work, designing a website for them or using a third party theme or design to develop or create the site.

Everything’s fine until the client comes back to you with feedback. Maybe they say this isn’t what they wanted. Maybe they say it doesn’t incorporate everything they were expecting. Maybe (like my very first client), they tell you they don’t like the design after all, but don’t actually know what it is they want. That client actually told me “I don’t know what I want, but I’ll know it when I see it.” Frustrating!

Vagueness like this will eat into your time and your relationship with the client and could well land you with one (or both) of the following problems:

  • The client keeps asking you to do more and more (referred to as scope creep or project creep). Since you haven’t formalized exactly what you’ve agreed to do for them in a project brief, it’s difficult to say no.
  • The client changes the nature of the brief or adds so much extra work that you have to say no. The disgruntled client decides to take their business elsewhere.

Neither of these is the outcome you want, which is why project briefs are so important.

Freelance web designer Claire Brotherton says the best projects are those with a clear brief:

“Getting the brief right is a collaborative process between the web designer and the client, and requires asking the right questions early on. The best projects I have worked on have been the ones where there was a clear idea from the start of the project requirements, a sensible timescale, full cooperation with the client and good communication at all times.”

A project brief should include the following:

  • A summary of the project.
  • Time lines and what happens if either party fails to meet deadlines. For example, I charge for project stages if they haven’t been completed due to the client failing to provide content.
  • More details on exactly what you’ll be providing, as discussed in your initial conversations. Include deliverables, timescales, project stages and a summary of any design concepts.
  • Details of what the client will be expected to do and when. For example I have feedback stages built into my project plans, and make it clear that I can’t proceed without the client’s input.
  • Details of platforms, languages and compatibility. For example, make it clear which browsers and devices you will test in.
  • A clause detailing what happens if the nature of the project changes or the client needs you to do more. This will include costs for extra work and impact on delivery dates. Make it clear that major changes and additions won’t be incorporated into the project at this stage but will be kept back for future phases.
  • Details of how a client’s site will be launched or hosted. Who has responsibility for this?

You may need more or less than this depending on the nature of the project. The important thing is to make it clear to you and the client exactly who will be doing what, and when.

Some freelancers like to combine project briefs with contracts, but I prefer not to as I use a standard contract while the project brief will always be different. But I do explicitly refer to the project brief in the contract, and ask the client to agree to both at the same time.

Mistake #4: No Deposit

Once you’ve decided on the right hourly rate, you’ve found a client, signed contracts and agreed a project brief, you’re ready to get to work, right?

Wrong.

There is another stage that you’ll find all agencies and a growing number of freelancers are now incorporating into their contracts, and that’s a deposit or down-payment before starting work.

This will vary from 20% to 50%, depending on the nature of the work and the length of the project. You’ll find that with shorter projects you can charge a larger percentage upfront, whereas if a project will last a year you can’t expect 50% at the beginning. For some very quick projects you might even charge 100% up front, but in my experience this is difficult to do with new clients.

Insisting on a deposit protects you if the client decides to drop the project before you’ve completed it or reached a milestone where you would charge for your work.

Don’t Be Like Me

In my very early days of freelancing I didn’t charge anything upfront. Instead I charged 50% on completion of the alpha stage of a website build and 50% on launch. But (guess what!) I got stung by this. I took on a client who signed a contract, agreed to the project brief and let me start work… and then mysteriously disappeared. I worked on design concepts for their site, created some mockups, sent them off to the client, and heard nothing back. I tried phoning the client and emailing them repeatedly, but they never answered my calls or replied to my emails.

Invoicing – if you're a freelancer, you can't avoid it.
Invoicing – if you’re a freelancer, you can’t avoid it.

It meant that time I’d spent working on their site design was completely wasted.

I tried invoicing for the work I had done but, of course, I heard nothing back. Luckily, at that stage I wasn’t charging very much and hadn’t done too much work, so I didn’t lose too much financially, but it was stressful and made me feel like a fool.

Now I don’t start work until the contracts are signed, the project brief is agreed… and the deposit has been paid.

Some clients will tell you they can’t pay the deposit yet because of their accounting cycle. Their accounts department only pays invoices at the end of the month, they’ll tell you, and they need you to start before then. Your response should be a polite but firm no. Tell them this is how you work, it’s standard practice in the industry, and it’s in the contract they signed (yes, make sure you include payment stages in your contracts).

If the project’s delayed because the client doesn’t pay the deposit quickly enough, then it’s not your problem. It’s theirs. Well, it might feel like yours if you then lose the work, but in reality that’s a blessing in disguise. If a client refuses to pay a deposit before starting work, then it’s safe to assume they’ll be reluctant to pay invoices at later stages too. In which case you’ve avoided a lot of stress, extra work, and cash flow issues. Move on and find a client who’s more amenable.

There’s More to Being a Freelancer

Being a freelancer is great. I’ve been doing it for some years now and get a lot out of it. But it will only work for you if you’re prepared to accept that there is a duller, more business-oriented side to it.

By avoiding some of the common business mistakes and protecting yourself from the risk of not earning enough, not being paid, scope creep or worse, then you’re far more likely to enjoy a long and happy career as a freelancer. Good luck!

How do you protect yourself as a freelancer? Share your stories in the comments below.

22 Responses

      • Site Builder, Child of Zeus

        To be fair, there needs to be an element of trust in this as well. If you have trust that you’re going to get an amazing service then it’s no problem to pay upfront.

        The trouble comes when you have a bad experience. To date for example, I’m 0-3 with Freelancer and am really disillusioned. From freelancers failing to deliver, disappearing or simply not understanding the brief it’s pretty frustrating from this side of the computer screen. This includes a Freelancer that we paid a portion upfront too, so that’s no guarantee of quality.

        It’s all very well to say a million others will pay upfront, however when it’s your money, you’re taking a shot in the dark and have the experience that I’ve had then I hope you can understand why people would be cautious to pay upfront again.

        • New Recruit

          Absolutely, and point well taken… back in the day when most work programming and development prior to the fastidious Web 2.0 and all its hidden social network nuances, work was mostly done by local business and/or well established “fulfillment” companies with a brick and mortar, or even word of mouth reputation from face to face presence.

          I whole heatedly agree with the frustrations from the customer side and point of view. I have recently just joined Freelancer, and talk about the cut rates. The old adage applies here as well; you get what you pay for (of course my not knowing what your application was, or any of the details. Hopefully as the customer side goes as I dabble a little with Freelancer. I see customers looking at qualifications thoroughly with solid reference contacts etc. not just reviews or referring to a list portfolio… as these can and are easily spoofed and lied about dealing with a networked site. In all reality It’s easy-peasy: just create many Freelancer accounts and play customer and client fence padding your reputation with bogus “work to be done” and well done “work completed”. Rest assured I will have contacts from phone numbers on reputable sites, hosting companies, and pleased customers for potentials to contact for reference on my work. That will happen weather or not I have any success with Freelancer. Sorry to hear about your ill experience there.

    • New Recruit

      Well, at least you’re being honest about starting a fight.

      As v1ktor mentioned, it’s a free country, you can do business anyway you like. Depending on the market, you may get what you want.

      In my market, good developers, (skilled, good communication, creative problem solving ability), are in high demand. There’s plenty of work, so if a client says “I will never pay upfront!”, I respond: “Thank you for your time, and best of luck with your project.”

      I have more work than I can handle, without advertising, not counting all the unsolicited emails I get from recruiters off Linkedin.

      I learned a long time ago that some clients have a hard time understanding different business models, or even basic micro-economics. I used to work with real estate agents a lot, but am weary now as many think that I should do lots of “little jobs” for free, because they perceive that they do the same for their clients, never really thinking through that they are getting paid a fat check at the end on spec, as a percentage of the deal, and not by the hour or project. If we do lots of little freebie jobs, at the end of the project we get…sweet FA. Not to say I never do any freebies, but I can tell when a client is tying to take advantage of me, and will charge for every minute of every task if that’s the case. It’s the old 80/20 rule.

      I refer most agents out for that reason. Many just don’t understand other business models besides their own.

      These “freebie” client’s are also often quick to ask for a discounted rate or even free work in exchange for the promise, “I’ll send you lots of business.” In my experience, those clients never send quality referrals. It’s a deed to the Brooklyn Bridge.

      Another big problem with not charging up front, and one mentioned in the article, is when the client decides to “hold off” on a project for some reason, or changes his or her mind on the scope and/or direction of a project and thinks he or she shouldn’t have to pay for the work up until that point. If you have a deposit, you have leverage to re-negotiate, or if they disappear you’re not SOL.

      Something clients often don’t seem to get is that the developer’s primary asset is his or her billable time. Once you’ve put time into a project, there’s no putting it back in the bottle. We are not selling products that can be put back on the shelf and resold. Once the time is gone, it’s gone. Getting a deposit upfront is one way to make sure you’re compensated if the client disappears or changes direction and unilaterally decides that she doesn’t want to pay for the now-abandoned project. I’ve also found it’s a good way to keep scope creep in check.

      I studied economics in college, which I think gives me a different perspective. Price and terms are decided by the buyer AND the seller. You would sell your house for 4x it’s value all day long and a buyer would buy it anytime for $1, but you don’t have a transaction until both the buyer and seller are in agreement. That’s the way things work in a free-market economy. Supply and demand.

      I remember seeing an ad in the gig’s section of CL a few years back. A company wanted a WP/PHP developer who could code high-level PHP, write plugins, manage version control, do front and back end dev, etc, and were offering $15/hr. Bwahaha, I thought. After seeing the ad still posted after months I sent a polite email suggesting they might be low-balling a bit.

      I never heard back, and the ad stayed up. That company just never understood that the client-developer relationship is just that – a relationship. Both parties need to be happy and protected. Not sure if that company ever got that project off the ground.

      So if you have (good) devs working with no deposit, lucky you, but know that most seasoned devs won’t go that way in most markets, so for others thinking of hard-balling devs on deposits, it probably won’t fly.

      • New Recruit

        Hear hear on that too… it’s sorta like the automotive mechanic world… a few bad eggs makes all look bad (and I know because I’ve done 10 yrs of it). Solid communication is always the key when uncertain things can arise. business to client relationship essential all the way. Communication in any relationship for that matter, and a relationship is exactly what it is. Even if all you need is someone to dig a ditch for you.

      • New Recruit

        Oh… and I gotcha on the “Realtors” that way too. (Lol) Complete dejavu as you mention how the perceptions are there. Love the example of billable time that will not go back into a bottle or shelf for resale. It be GONE! Fellow named Peter and His wife (both realtors at the time) were one good exception to the commonplace in that industry for me, but just too many have been change up / mission creep, and/or Penny ante. -Cheers

    • New Recruit

      I really don’t understand why there is so much fuzz on the client sides here about paying upfront(partially).
      Whatever I buy, from household energy to a book at an online shop, I have to pay upfront in most cases. Companies that build machines, vehicles and other custom products, they all demand some payment before the work starts or the order is delivered. And there too clients get no guarantee the product or service will be satisfying in the end.
      My experience is that most clients understand the demand for a first payment upfront and I notice a huge difference in clients cooperation as soon as they do. I know the situation all to well: You start working without any paymen and then the client doesn’t respond anymore, cancels the work without any motivation. In the few cases I experienced there was only one client who offered to pay for the work done and asked for billing spontaneously. For all the rest I had to force payment by legal measurements. Time and money consuming actions that in the end all other willing and trustful clients have to pay for as well.
      Upfront payment is good for both sides being engaged and motivated. I don’t see an issue there.

    • Site Builder, Child of Zeus

      I do web development and I either get them to pay a deposit which is 50% or the entire amount if job is simple and easy to do and doesn’t cost a lot.

      There is something called a contract which I sign and listing down my services and their delivery time.

      Its the same as hiring a contractor to build you house. If he has to wait for payments after he builds your house I doubt I would take that gig. I wouldn’t either. Thus I would never take a gig that wants to pay me after the job is done.

  • Site Builder, Child of Zeus

    Very good advice in any business, web development or other marketing related activities. Contracts and service briefs are essential. Whether you use a “letter agreement” or a full scale detailed services contract, is up for debate. But using something isn’t. It is always good advice to “Put it in Writing”. As far as rates, you are really going to have to work yourself into receiving top level payment. You will almost always lose money relative to employment in your early freelance years. But, you have to prove yourself to clients and prove it to yourself as a contractor. The advice about getting a deposit is critical, and should be a part of your standard agreements. Just as an aside, you might want to add a little something or two to protect yourself against claims of infringement for using client provided content. You’ll find most clients who have been through contracts with freelancers are skilled at shifting liability to have you cover cost or legal responsibility that are actually theirs. Just because you aren’t in a job, doesn’t mean you can forget about CYA.

  • New Recruit

    Great article on the basics as a freelancer for over 12 years I want to debate two topics of this post.

    One your rate doesn’t matter because your competing with Indian and overseas companies. Clients are not well informed enough born do they want to hear the quality and service difference with these companies and in fact to make matters worse some clients will tell you they were burnt before by these companies and can’t afford a professional. Don’t get me wrong some work done overseas is quality but their dilution of the standard hourly rate males things very very confusing for clients no matter how bright and phenomenal your portfolio is…clients refuse to understand anything but price until they learn the hard way. Let’s make it simple a 10 page turnkey website that takes over 50 hours to build end to end ready to market full of great unique content and analytics and tracking as well as paid licenses should not in anyway shape or form cost less then 750 bucks period anything less is an insult and simply ruining the industry.

    Second point to the last comment about never paying up front for a website build. I always take 50 percent up front and this is why you are completely wrong if your not doing so and it’s a tricky abstract concept so I will make it clear as possible. When you begin a website build that is the moment your start a deliverable product, the final launch or delivery is not the delivable it’s the moment you are retained and start the wire frame. I made this mistake in my early days when I finished the wire frame clients potentially confuse the process and bail put or decide on a complete new direction once they see it physically. So the time and paid licenses you put in are not covered they are a loss. I will state this clearly as I do to clients I’m delivering a product the moment I start your project launch is not the delivable the inception is. Always take a deposit, if they cannot or will not pay a retainer run away you client needs to cover your work hours that lead to a final product and if they are serious and commited to that they will pay…otherwise you have zero leverage as a freelancer and you will pay for it no matter hkw definitive your contract is! Professional companies and individuals understand this and they will pay if they don’t that a red flag point!

    • New Recruit

      Well received, and a good point.. All web development work I’ve done since 2000 has been self employed… I’m converting to learning PHP/WordPress from classic ASP (after some few years of burn out). Seen all the snafu’s you can imagine… Fortunately some of the later stages of my working have been with a hosting client that did most of the “boring” and dirty business work. But I’ve been right alongside to see it all, and he retained the same contractual attitude and retainer of 50% His people did design… I did the nuts and bolts coding of business logic. I will be utilizing this guide, and all that I’ve learned as I’m learning WordPress. Knowing some other programmers who have time too and not under gun of income (e.g. one I’ve trained for sure who is now semi-retired), I will keep the rate at recommended, and have two of us working while we ca-bob heads to get the ETA out as we are learning (he being better with PHP than myself at this point, but my knowing the API, process and application). We will both be getting half the rate… but learning WordPress at the same time.

      To coin a few “figures of speech”: Yup Contracts Contracts Contracts. Deposits Deposits Deposits.

      Win win (By Winning -Lol / Charlie Sheen)

      Developers Developer Developers (said one almost passed out Steve Ballmer -LOL) :P

  • Thanks for all the comments folks, it’s good to see this has sparked a debate! I make no claim to be a cool web designer, but I am a cautious one who needs to earn a living, so for me an element of payment upfront is essential. As the anecdote in my post demonstrates, not doing this can end in tears. However there is a valid point to be made about ensuring you hire freelancers who you can trust to do a quality job – it does cut both ways. Which gives me an idea for a future post! :)

  • Site Builder, Child of Zeus

    Love to read the WPMUDEV Blog! It is full of amazing articles!

    So, here’s my 2 cents about it – I’m in business for almost 9 months now. And by this I mean that I have a company and everything is legit. Still working alone, tho. I totally agree with @rob5000 and in addition to @kees_van_surksum’s comment I’d say, the only two things you don’t pay upfront are water and electricity bills, contrary – with these two, you pay consumption bills, meaning, you pay whatever you’ve consumed.

    So far I had very few clients, but my “portfolio” of bullshit is already filled up quite a lot!
    My first client situation – we spoke, we shook hands, I started working. Working without a project brief and a contract led to these (uncomfortable) things :
    1. I had to keep pushing my client almost every day with the words “I need more info, when are you going to get me the info?”. Didn’t work for a minute. A site that you can make for 5 days took 3 months. In fact, the site still is not finished. Because the client still don’t know what he wants.
    2. By being soft-hearted I had to actually wait for 4 months to get paid. Pretty cool, huh?
    3. I ended up providing free advises and support for months after I got paid. Cool? Nope…

    So after my very first client I realized that as a business owner/freelancer, you need to have more control over the whole thing. You need to do a project brief, you need to have a contract, you need to be 100% clear and specific what you need from your client, what are your client’s responsibilities (besides paying). So if you need information for the pages or images for the gallery, or whatever – you have to tell your clients what you need and the EXACT time frame in which they have to provide!

    My second client – it was a company. I thought they might be serious. They wanted the work to be done without any advance payments. I guess this was the moment I should’ve evaporated. But nope – I began working. Again – no payments, no contract, nothing! I had a project brief, but that didn’t work too.
    I had a time frame (6 weeks) there I was pretty sure I was about to fail to it. Was already thinking how much discount to provide if I do fail. And then a “miracle” happened – I needed information from the client and guess what? I ended up waiting for almost 3 weeks for this information to be delivered. They didn’t bother. But I did. Because I’ve told myself that I will work only on one project at a time, so I won’t get messed up. Well I did get messed up – 3 weeks of “hunger games”. After that I did some work and needed more info and waited for 2 more weeks. So pretty much it was almost 3 months when I got the phone and asked for an advance payment (which I wouldn’t call an advance payment after 3 months), and hearing “That can’t happen” which broke me into pieces.
    So few days and threats (not coming of me) later we ended up things. Long story short – I’ve lost 3 months, left my work there, didn’t get my payment and got humiliated by being called “incompetent” and “incapable”. (incompetent and incapable after I did much more than the project brief suggested, including dealing with a hacked site, doing design and more)

    So what’s the lesson here? Everybody can be full of shit, so you can’t be easy-going with strangers. You won’t get any respect if you are, so you’ve got to be hard on them. Not too much, but hard enough.

    And something else – @Dorron shapow said something about overseas. Well, let me tell you something – we are not the ones to blame that the US economy is weird! Paying $4 for a bread or a liter of juice? This is insane! And unfortunately – been there, done that! And there’s something else – the people overseas don’t get that much trust like you do! You charge $35 per hour and people think “He’s from Chicago, he should be legit!” and they pay you. I would fail so hard even trying to get $15 per hour. Because of trust and nothing else!

    In my country the by-the-hour payments are not popular. But this is the most fair one – you get paid for what you’ve done. Not overpaid and not underpaid. You get paid EXACTLY how much you’ve wanted to. And with today’s exchange rates, I am charging $7 per hour. And it is fine for a new business. I say fine, not good or awesome. But with our funny economy and business owners who want a site for no more than $100, you tell me if I should “fight” for a piece of our market or try my luck with the overseas market, where $10 sounds cheap and $15 – reasonable.

    One more thing – pricing really depends of the place you are living (not just the country, but the town, state, whatever). I can’t really get it why all the fancy-pants experts are living in New York or California, where you get $12 for bussing tables. Go try charging $50 in Minnesota, where people are still living with the fed minimum of 7.25! Nope, nope, nope!

    So at the end of my messy post, I’d say that it really is hard to be a business owner/freelancer, but it is really us driving the economy :) And remember – project brief, contract, and charge double if clients are trying to reach you in your free time ;)

    Good luck!

  • New Recruit

    I find clients accept the deposit without question when it’s accompanied by the statement that “I ask for the deposit in order to secure my time, and to firm up both my and your commitment to delivering this project together”. This reassures them that I won’t take on so many clients that I can’t do their project during that time, and it also lays out how building a website is a joint project that requires input and commitment from both parties – good to get this understanding on the table upfront.

    Also, in terms of contracts I can recommend The Contract Killer as a great place to start:
    https://stuffandnonsense.co.uk/projects/contract-killer/

    You’ll notice that there are many points in the contract that refer to the client’s obligations, as well as the freelancer’s.

  • New Recruit

    @Valentin
    I feel your pain. But I want to point out hourly pricing is not the fairest. Value pricing is, if you’ve got the hutzpah to do it.

    See, with every site we build or small job we do we are providing VALUE to the client. If you charge hourly, then when you get more proficient at certain tasks, they take less time. So, you are providing same value for less.
    I like to give a fat bid number, with value considered.

    • Site Builder, Child of Zeus

      You are right :) But no one said that you can’t raise your rates, right? If you are working for somebody, they are going to raise your salary every 6 months. If you are working everyday as a freelancer, you should do the same too. I mean – when you get more experienced, you will work better and faster, but you should be charging more. This is how you will achieve balance. And I guess this is the right thing to do :)

  • New Recruit

    I’m loving this posts and I now do all four. Got burned on No contract,/Project Brief by a friend! And remember to include a way to bill for meeting and phone time. I offer 2 hours of free meeting/phone time at client’s request. After that, my hourly: $100. If I call the meeting no charge, I’ve already figured that time in bid.

    But just recently I’ve run into some scenarios that are requiring me to add a bit about hosting to the Contract.

    Unfortunately, as the WWW tech marches forwarded it’s leaving many small hosting companies behind. This is especially true with WordPress. Migrating a site that should take around 45 minutes can take days if the hosting company isn’t equipped with the proper PHP or Mysql version. Or, in the case of 1&1, just not equipped with knowledgeable staff to help you around their Alice In Wonderland-esque “C-panel”.

    I’ve recently spent a total of 18 hours of my time with support, and debugging, etc to launch 3 WordPress sites!!!

    Now I need to include in my contract that dealing with any issues at current Hosting Provider, exceeding 1 hour, is billable time. Lordy!

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