A long long time ago, I quit my great job at BiQ to live primarily of my freelance Ruby on Rails development work.
It’s one of the best decisions I’ve ever made.
Being directly responsible for my own income has been fun, empowering, fulfilling, and pretty damn scary. I’ve met lots of great people, worked with great customers on great projects, and I’ve learned a lot of lessons in the process. Allow me to share a few of those lessons with you.
I am a geek. I am not particularly outgoing. Small talk is not a forté of mine.
However, as a freelancer, entrepreneur, or anyone running a business you cannot isolate yourself in a dark basement producing high quality work. You need to get out of your chair and meet people - partly in order to stay sane and get outside influences, but definitely also because your network is very important to your business.
I have gotten the majority of my customers through my network. If you provide a great service, your previous customers will happily recommend you and your coworkers will happily refer clients you. If you’re a great person, your friends are going to talk about you.
Leverage your network, and don’t forget to make yourself available for them as well.
One of the things I have been most surprised by, is how much I think about the company.
There are always a ton of things to think about; processes that could be improved, ideas that might be worth pursuing, people to get in touch with.
Whenever I have some downtime; doing the dishes, walking the dog, watching television or in some other way allow my mind to wander, it tends to wander towards Substance Lab.
Many other people have written about this point in length, but it is important enough to bear repeating.
If you plan on working reasonable hours - and you should - you cannot expect to work 8 billable hours per day. There are so many other tasks that you need to take care of, that a part of running the business. Admin, taxes, sales, marketing - Jon Hicks have a longer list.
I have, on rare occasions been able to work 6-7 billable hours in a day, but more realistically, I count on around 3-4 billable hours on any given day.
Things will take longer than you think. Period. Couple that with the fact that you probably won’t be able to work as many hours as you figure, and you have a scheduling problem on your hands.
You want to minimize the amount of time without client work. But at the same time you need to leave buffers in place for when your estimates are flat out wrong or when something goes wrong and needs to be dealt with.
I wish I had any words of wisdom to dish out that would instantly transform you - well, myself - into a scheduling demi-god. Unfortunately, I don’t. For now, I am relying on optimism and a lot of running really fast when things get tight - hardly optimal.
That’s just a few of the lessons I’ve learned over the last years of freelancing. If you do any freelancing or run your own business, what have you learned? What would you tell someone who’s thinking about starting out on their own?
As you say, it’s pretty scary to be responsible for your own income, especially when you are just starting out. I don’t do my own books, I leave that to the accountant, but it has helped me a lot to always maintain a simple cashflow spreadsheet. Everytime I spend money I put it in there, and every time I write an invoice I put it in there - a couple of days after the deadline. Fixed expenses also go there, my salary, the taxes - basically anything that goes in and out of my company bank account. That way, I can always look at my at cashflow and say to myself: OK, if I don’t make a single dime from now on, I can still go on for so and so many months - gives me some peace of mind :)
Well done. Useful post, thanks.
Regarding expenses I use something like that to trace my money.
https://spreadsheets.google.com/ccc?key=0AkIXC3D8GtkNdDhFVmdhNnBDWUgxRV9tLVBkSmRXd3c
thanks for the post this is a great lesson learned
Jakob and Casper, thanks for sharing this. It actually cleared up a few question I had been wondering about.
Although I think the part about being consumed depends very much on the kind of company you’re building. I know a few people who started a company (invariably named Holding) only to go work on long J2EE contracts. Typically with the client being the company they used to work for. :-)
Very interesting to hear your thoughts.