The Top 10 Tips For New Consultants And Freelancers
You’ve just decided to leave your job. Or maybe you’re moonlighting. Either way you’re out there, offering your services to the highest bidder. Congrats!
The world of consulting and freelancing is a vast, mercurial place filled with all sorts of opportunities. But there’s danger lurking about as well. When you first jump into the game, eager for that first contract, you can find yourself in trouble with difficult clients, overblown projects, time constraints and more.
Here are 10 tips to help new consultants and freelancers get a headstart:
- Set Expectations As Clearly As Possible. This is harder than it sounds. Clients are notoriously bad listeners. They want the moon, but they want to pay in loose change. Or they don’t quite know what they want but they want a super-accurate quote. Your job as a consultant or freelancer is to explain what you’re going to do and for how much and in what time frame as clearly as you possibly can. Write it down. Tell them. Repeat yourself. Write some more. Get them to sign proposals and specifications.
- Get Money Upfront. Always ask for a percentage of the contract upfront - to be paid before you start. A decent amount is 25% or 33%, but even 10% of the contract in your bank account before you do a lick of work is better than nothing. You’ll have to ask for it to get it, very few clients will hand it over.
- Make Sure Payment Terms Are Agreed On. There are two key elements when it comes to payment terms — (1) When you can invoice, and (2) When they’ll pay. Setup a payment schedule and make sure you know their payment terms. Oftentimes it’ll be Net 15 or Net 30 - which means they’ll pay an invoice in 15 or 30 days, but some companies have 45 or 60 day terms (which are not good for you!)
- Get Expenses Paid For. Try and get the client to cover your expenses. The most common would be travel costs. There may also be specialized equipment needed to do a job, or other things you need to purchase. A web designer might need to purchase some stock photography, for example. If you can’t get this stuff paid for, consider increasing your contract price to cover any expenses you foresee.
- Be Ready To Stop Work If You Don’t Get Paid. This is tough because it’s the start of a souring relationship, but you’re not a volunteer. You might consider having something in the contract/agreement that clearly stipulates work stoppages upon non-payment. Or, you leave it open-ended, at your discretion; but be mentally prepared and tough enough to tell the client, “No money, no work.”
- Get a Testimonial or Reference During the Project. You don’t have to wait for the end of the project to ask for a testimonial or reference. Hit ‘em up in the middle, assuming things are going well and you’re getting positive reviews from the client. How do you get a testimonial? You ask. Sounds silly, but it’s true.
- Track Your Time. Even if the client isn’t expecting timesheets from you, track your time anyway. Do it for your own understanding of how long things take. Do it so you’ll get more accurate at pricing projects (cause you’ll probably be lousy at it for awhile.) Do it in case a client demands justification for work you’ve done.
- Don’t Ignore Client Communication. Managing and communicating actively with clients is critical to success as a consultant or freelancer. It’s not enough to do the work. They’ll want updates, status reports, etc. The more handholding you can do — without it consuming too much time and taking away from getting your work done — the better. A well-updated client is generally a happier one, even if you’re bringing them bad news, because they’ll feel on top of the situation and more in control.
- Network Within the Organization. It’s always a good idea to inculcate yourself as deeply into your client’s organization as possible. If you’re hired by a District Manager, try and get introduced to her boss or other District Managers. The more connections you have the better. For starters it can lead to more work. It can also help in situations where your primary contact disappears - maybe they quit, get transferred / promoted, etc. Lots of opportunity is lost by consultants and freelancers when they’ve only got one contact in an organization and that contact is no longer in a position to hire them.
- Document Everything. The more you track - in writing - the better protected you are in almost every imaginable circumstance. Miscommunications can be minimized and disasters can be contained by documented proof of what’s going on. As well, documentation is a valuable asset for setting clear expectations, defining goals and understanding project scope. Just write it all down.
Being a consultant or freelancer can be one of the most rewarding professional experiences. You’re an entrepreneur, growing a business. Opportunity abounds. You finally get to take your expertise and leverage it the way you want.
But it’s a learning process. Sometimes it can be a fairly steep learning curve, and you have to be prepared for that.
Thanks for the great tips, Ben. I’m working on the first one and last one particularly right now, since they’re the ones that have bitten me.
I’ve also started tracking my time religiously in order to get an accurate picture of which clients are more trouble than they’re worth (or at least should be paying a higher rate to cover frequent changes).
Tracking time to root out troublesome clients is a good idea. You probably already know which clients are troublesome but tracking the time gives you solid evidence that you can use to decide what next steps you might take with them.
Now why couldn’t you have written that last year, would’ve saved me a huge amount of headache in getting our consultancy work off the ground.
Just from my own experience, I’d also add in a point or 2 about pricing:
1. Build enough room into fixed fee quotes to cover the ‘non-working’ back and forth, revisions etc…. What should be a 20 hour project can easily become a 30 hour one.
2. Low fees are often equated with low quality - although we work mostly with startups and small businesses we actually had to raise our rates to start attracting the type of clients we wanted. It was a concious decision to go after a bigger projects that has actually resulted in more enquiries at all levels.
I’ve not been freelancing for too long, but having been self-employed for two years now I can fully back-up all your great points.
This is an excellent post for people taking the plunge.
There is a big difference between being employee and freelancer or consultant.
And this post really can help to understand that difference.
Some of the most common problem is to define the fees and learn when to say “no” to a client.
Thanks!
When I’m doing design projects I used to have a lot of trouble keeping track of my time. Then I came across a piece of mac software called Billings that helped me solve tip #7.
Thanks for the tips, Ben.
I’m working on fine tuning my consultancy plan, as far as I know of there isn’t one similar to what I’m offering, and this makes it difficult for me to finalize.
You pointed out a couple tips that I somehow overlook. Thanks again!
Collis over at NorthxEast.com also has a great post about freelancing up, a week or two old now but he reeled in huge hits from it. It’s huge.
Hi Ben. Found you through Mark Goren at Transmission Content. Great post. I’ve been a PR consultant for 16 years, and I still learned something from what you said.
I’ll be back here to learn more.
Great advice. I would add one thing: get an accountant. There’s little point taking the leap into self employment and taking that risk if you don’t know how to structure your own tax etc …
Maybe this only works in the UK but even using your own home office gives you tax breaks …
One modification to #5 is to continue to work, but not deliver anything until payment is received. This recognizes that client hiccups happen and allows you to tell the client that there won’t be any delays to the schedule because you’re still working on the project. Yes, it does mean that you may end up doing work and not get paid for it, but at least the client won’t get any deliverables.
Terrific list! very helpful
IT Consulting Guy, that could also be an option indeed, but I personally find the chance of working for no compensation quite scary, especially if you’ve got other work to do. I’d rather freeze the work than continue with quite a risk.
A very nice article, you got my Digg.
ploop - that’s absolutely essential. I’ve written about outsourcing before, and how important it is to outsource accounting and bookkeeping, among other things.
So you’re right on the money. If you’re going to fly solo get the tax info you need.
IT Consulting Guy - that’s a fair way of going about things - I might recommend that if someone already has a good relationship with a client, and the client’s just a bit slow with payment.
If you do take that approach, and then get paid, and suddenly deliver all this work to them, you might look like a superstar. At the same time the client might also realize you’re doing the work even without being paid on time and you’ve lost a serious leverage point. So there’s a balance to be figured out there.
Keeping clients to their credit terms is a huge challenge. It may be a good idea to initially get payment upon completion of first project, then extend credit terms.
after all we are businesses - right?
[…] Instigator Blog (USA - en anglais): J’aime beaucoup ce blog du Montréalais Ben Yoskovitz, que j’ai déjà cité et qui propose ici “The Top 10 Tips for New Consultants and Freelancers“. […]
Thanks for the great suggestions. I’m not a traditional consultant any longer, but I am self-employed so this was a great reminder!
Thanks!
Mandy
http://www.personalfinance101.org
I totally agree with your tips. I deal with clients on a daily basis and I must say that most clients DO NOT really know what they want. So, I have had to ensure that I probe further to really understand what clients want and at the same time document the client’s expectation. Doing this has helped me several times from putting myself in trouble.
However, I still fall victim of tip 5. Because I cherish relationship so much and will like to show the clients that I am more interested in helping him solve his problem than his / her money, most of these clients have used this against me. There was this client that is even owing me about $2,500 now and he is not even talking about how he is going to pay.
I will create a link to this article on my blog so that others can learn from it.
Emmanuel - I can understand cherishing client relationships a great deal - people relationships really - but at the end of the day business is business. They agreed to pay X for Y services. If they don’t pay, they’re the ones damaging the relationship, not you.
Great article, i wished someone wrote this when i first started.
Moses - I hear ya. I wish I had written this earlier too - but it’s always good to go back to basics, even after many years of being in business.
Thanks for stopping by!
Hello,
That’s why I like to read blogs all the time. U can learn a lot from different minds and points of view. All tips are essentials; particularly I’d put attention in number 1, 7 and 10.
Thanks for share this valuable information.
Marcelo - Thank you for stopping by and commenting.
This is a great article!
It’s the best article i’ve ever read for freelancers.
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