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Invoicing Shouldn’t Be a Chore

Have you ever been in a position where you were “rich on paper,” but had a bank account that was starving for cash? It’s odd how you can have the pressure of debts and bills to be paid while still having several invoices you haven’t sent simply because you’re too busy to collect what is owed you.  It doesn’t make sense, but when you’re hard at work it’s easy to let these tasks slide.

I know there have been many times where I’ve had a stack of checks sitting in my inbox and I just can’t seem to find the time to make it to the bank.  Having even the small hurdle of opening Excel to record what has been invoiced and what’s been paid can help delay this task much longer than is helpful and create urgent situations which shouldn’t exist.

It’s a bit ironic considering how magical those first few invoices you sent out as a new freelancer were.

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Overcoming a String of Bad Clients

Everyone has a bad client sooner or later. It’s a part of building experience as a freelancer. However, it’s easy to get into a pattern where every client can seem like bad client early on in your career. I remember my first couple of years in business. I had clients who:

  • Never paid.
  • Paid late.
  • Pretended like they didn’t understand something we had agreed on in order to try and weasel out of paying me for work I had done.
  • Wanted to negotiate an already low rate on my part.
  • Agreed to my rate and then tried to continually devalue it through negotiation.
  • Had me agree to a flat fee and then expanded the scope through ongoing clarification of what they wanted.
  • Tried to manipulate me with praise to get more work done or lower my estimates.

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Is Any Work Better than None?

Like many freelancers, when I first started out, I would work with anyone who would hire me. After a few years, I developed enough of a client roster that I wasn’t continuously struggling to find new projects. However, even with a roster of clients, you still have peaks and valleys. When things were good, it was very easy to turn away work, but when things slowed down prospects that I would normally turn away began to magically look more attractive. I took on a few clients that I never should have worked with and regretted it on every occasion. It’s easy to think that any work is better than none. After all, it doesn’t matter if your rate is $400 an hour if you have 0 billable hours a month. However, the truth is that it’s better to be broke then to take on bad clients or projects.

Bad clients are cancerous to your business. They will drain your time, energy, and mental well-being. They will need to be managed while you work with them and eventually fired once you’re through your dry spell. This is an enormous cost on top of the discount rates they will seek. When you work with a bad client, it’s like taking a loan out against your future self. Yes, you will likely get paid now, but the interest on it is costly and it could be a burden you carry around for years. Continue reading

The First Step in Getting off the Project Treadmill

Freedom is the most cited reason that employees take the leap and become freelancers. I know that was true for me. One of my happier memories is of my last day as an employee when I stepped out of the building, got in the car, and drove away for the final time. This sense of liberation quickly gave way to the uncertainty of how I was going to make freelancing work. How was I going to get clients? After a few years, I stopped worrying about getting clients and begin to worry about keeping up. This is a typical transition for freelancers as you establish yourself.

Success leads to more and more work until it is queued up at a faster rate than you can do it. You begin to turn away most leads because you are too busy to take on their work any time soon. Often, you have several clients with ongoing projects that depend upon you to move their business forward. You end up constantly chasing deadlines, grinding out project after project.  You’re moving, but you’re not really going anywhere. You’re on a treadmill.

It’s ironic: the reason you get into freelancing is for the freedom and success as a freelancer leads you away from freedom. Continue reading

How To Keep Client Emails From Burning You Out

One day a friend asked me how work was going and I replied, “death by email.” It was accurate in that I was spending around half of my day writing emails to clients about their projects and hating it.  Eventually, we closed out those projects and things slowed again, but before I knew it, I found myself giving the “death by email” update to someone else. Unfortunately, this phrase begin to become more and more frequent to the point where some days I would stare out the window and mutter it like a lunatic. It was my little psychotic mantra.

Some people like writing emails. Idiots for example. (Ha!) However, I had better things to be doing and I was wasting my time in my inbox.  On the other hand, those emails were essential.  Communication had to occur in order for the projects to move forward. There was no getting around the need to email back and forth in order to get and keep things progressing.

When I set aside the time to think about it, I realized that it wasn’t the emails that were the problem. The problem was that we had become more successful in landing projects. Additionally, because web development is often an ongoing need, we were continuing to get new projects from our previous clients. All this incoming work required more and more project management and email just happened to be the medium through which I was doing it. However, there wasn’t more and more of me. While I was good at managing projects by necessity and experience, it wasn’t something I enjoyed, and it prevented me from actually moving things forward. Continue reading

Is It Bad Form to Charge for Excessive Calls?

A few years ago, my agency took on a client from a software startup in Toronto. The founder was a guy I will call James. I was doing all the communication with James and when we first discussed supporting his startup, I saw a few red flags in our conversation that revolved around pricing.  However, when I presented him with our rates he still wanted to hire us.

I hate doing calls. I find them to be emotionally and mentally draining. Because of this, I require calls to be scheduled in advance. This helps me to divert people to email for quick questions and prepare myself emotionally for when it is important to get on the phone. Over the course of the two months we worked with James’ company, he regularly called me out of the blue to waste my time discussing something that I had already explained in an email very clearly. I knew it was clear, because he would reiterate what I had told him, sometimes two or three times, but then would go off on tangents. On top of this, he would regularly use the time to complain about our rates. Every time the phone rang my heart would jump with a surge of anger. I wasted a tremendous amount of time and mental energy trying to manage the relationship.

After two weeks, I knew that we needed to get rid of him. I formed a simple plan: I was going to charge him for every time he called and interrupted my workday. I could do this, because when we first discussed our working together I explained that we billed for everything. Our billing policy is simple: we bill for every task your project requires that prevents us from working on another client’s project. Continue reading

Using a Stalled Project Clause to Limit Waiting on Clients

Waiting on clients to review your work or supply you with needed material to continue a project can be extremely frustrating.  It can also be damaging to your business because the gaps in time lower both your and your clients clarity about the scope of the project and your agreement.  It’s not uncommon for scope to expand over time as people forget the details. This often results in additional project management overhead with emails, calls, and meetings even if you’re vigilant and clear about the scope. When the project is not moving forward, you have to try to manage slack into your schedule for the possibility of closing out the previous project and taking on new work. Finally, you’re not getting paid in the meantime which is crappy for your personal cash flow and ulcer inducing if you run a small web development company like I do and have overhead to pay down each month. Continue reading

What’s Wrong with Value Based Pricing

Rates and pricing are a huge source of concern for web developers. We’ve all felt at some point that we don’t charge enough or need to figure out how to earn more. If you do any sort of research on the subject, eventually you’ll stumble onto something called value-based pricing. The basic idea is that you deliver a fixed bid on a project that is priced in respect to the value your client will receive from having that project executed. This causes an exponential increase in what you charge.

As an example: A SEO expert pre-value-based pricing charges clients $100/hour and has average engagements of $5000. They figure out that most of their clients earn more than $50,000 a year based on their work and switch to value-based pricing with an engagement fee of $20,000. The SEO expert still does 50 hours worth of work, but now they pocket an additional $15,000.

It’s a big idea that tends to create zealots out of its practitioners and it’s not hard to see why. Who wouldn’t love to be able to quadruple their rate?

Unfortunately, it’s not all sunshine and suitcases stuffed with cash.

I ran into this concept early on in my freelancing career and it was one of the more damaging changes that I implemented. It’s difficult to estimate my losses over time, but I would say that this approach probably cost me somewhere in the ballpark of $100,000. Continue reading

3 Tips to Prevent a Project from Dragging on For an Eternity

If you’ve worked in web development for any length of time, chances are that you’ve had at least one Frankenstein project that crept along at a snails pace. My personal record was as a freelancer with a two-year project. I was continually waiting on the client for reviews and sign off and when they did get back to me I found that we were often expanding into gray areas of scope- at my expense of course. As the project evolved, I spent countless hours doing research and trying to guide them through these gray areas to successful solutions. As I bent over backwards to help them, they began to expect it. The expanding scope created extra communication in calls, emails, and meetings and required even more time to review before moving onto the next part of the project.

The worst thing about it was that I really liked them and wanted to provide them with a great solution. On second thought, the worst thing about it was that I wasn’t getting paid for all that extra work because it was a fixed bid. The fact that I liked them just helped to make the whole process a smudge more bearable.

While I waited months between the communications to move forward I would dream about the day that the project would finally be completed.

How could I have prevented that slow-motion train wreck? Continue reading

How to Get Out of the Business

Many consultants build teams but find that they can’t quite separate from their business. We all know that we’re supposed to work “on the business” instead of “in the business” a la Michael Gerber’s E-Myth, but for some reason you can’t quite get all the way out.

You can’t trust someone to manage client accounts. Or, you can’t trust another developer to develop the application in line with your vision and standards.

Maybe, you have tried to hire somebody and you wasted months and thousands of dollars before determining that it just wouldn’t work.  So now you’re stuck.

You have to take care of it because only you can get it right.

The challenge of getting out of the business is the largest obstacle you face. Every hour you spend in your business, you’re essentially idling because no one else can move it forward.  It’s a huge tax on your momentum, like dragging an anchor behind you as you trudge towards your goals. Continue reading

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