School me on freelance/contracting

bowen

So I may be picking up some extra work outside of my 9-5 job for some extra income. I've already replied to some freelancing stuff in craigslist and newspapers. What sort of things should I be doing and keeping in mind while doing all of this?

I'm a software engineer, so, don't give me advice that'd only apply to artists.

Some things I'm looking for:

* Dangers
* What should I do with the money (taxing and so forth)
* Scammers, and how to avoid them
* Networking, how to use them as professional contacts
* Rates (most have set rates anyways)
* Contracts so they don't renege on me?

MKR

Always have a contract. Most people are decent and will honor a verbal agreement, but you'll regret not making them sooner or later.

Improvolone

If you don't feel comfortable, don't do it. You can say no.

Deebaser

Goto guru.com. What you lose in cheating the gov't out of taxes, you make up for with less scumbaggy clients.

bowen

Thanks dee. I'll look for work there.

I have no intention in screwing the gov't out of taxes. I'm just looking for the proper procedure (half the income set aside for taxes is the rule of thumb I think?)

Technicality

Where possible do small jobs, or break big jobs up into small jobs each of which you are paid for. Don't give a concrete figure until you see a concrete spec (you usually have to help a bit with this unpaid to get it nice and clear), and make it clear that any changes to spec will be extra.

Don't do a huge job for a company that you haven't worked with before, and don't start a second job until the company pays you for the first.

If you end up working as part of a team, talk to the other members as much as you can and pass along any later surplus work you get to them, and they will return the favour.

Always give yourself some leeway with any time estimates you make. Even on small stuff assume at least a days worth of sorting out small bits and pieces that you haven't thought of, or the client hadn't thought of.

The number one piece of advice I would give though is don't think about the money, and don't put up with any bullshit. If you worry about the money too much its easy to be manipulated and have a hard time saying no, which is a bad place to be.

bowen

Thanks tech.

I'm happy to see the freelance field has gotten a lot less retarded lately. Like "$20 to make me an algorithm" was the norm a year back. Now I'm starting to see people that are willing to outline the projects and work with the freelancer with projected timelines. This is a huge step up and one of the main reasons I didn't immediately apply for burger king.

EggyToast

If you're making a substantial amount of money (which is relative to your normal income), you will probably want to look into filing quarterly. If you owe too much in taxes you have to pay a penalty on top of your normal taxes, which would suck.

The fact that you're looking for extra work makes me think you're not making megabucks in your primary job, in which case your taxes are probably closer to 1/3 than 1/2. It's tax season right now, so look up how much you made last year and how much you owed in taxes, and then do a quick estimate for how much you believe you're going to make this year and see what the new tax range is. For example, if you think you'll make between 2000 and 10000 extra, your taxes might go up 600 to 4000.

But yes, have a written contract and stick to the contract for billing, the amount of work you're doing, and so on. Verify the work you're doing with the customer periodically to ensure you're both on the same page. Figure out whether you want to be paid up front, periodically throughout the contract, or all at the end.

Are you planning on running this as a [very] small business? That changes the tax forms but it also lets you deduct your expenses, as long as you keep expenses separate from non-business stuff at home.

bowen

That's exactly what I was planning on doing Eggy.

Deebaser

There are still a lot of retards looking for surf and turf work with a value meal budget. Tech is also MASSIVELY right when it comes to seeking out small jobs over larger ones. It is so easy to fall down the rabbit hole or out of scope with just a few emails and then you aren't making that much loot at all.

EggyToast

bowen wrote: »

That's exactly what I was planning on doing Eggy.

I responded to your PM, but noticed you said this here. The most important thing to do is to figure out the calculations for your deductions first. Like, if you own your house and you use 5% of the floorspace for your home office, you can use that 5% as a business expense deduction -- but then you can't use that 5% of your house for non-work shit. It's easier to explain in terms of computers -- if you want to deduct computer expenses, you can't use the computer for World of Warcraft at all.

I haven't done it because my mortgage disallows me from running any sort of business in the residence, otherwise I'd be able to offer more advice.

Note that having this space set up also makes it easier to bill clients, compared to just sitting around with a laptop. If you're in the Work Area, then you're working on a project.

zhen_rogue

MKR wrote: »

Always have a contract. Most people are decent and will honor a verbal agreement, but you'll regret not making them sooner or later.

This is good advice.
I'm a contractor myself, and learned the hard way early in my career about verbal agreements.
Also, don't be afraid to put some protecting terms on your invoices.
I typically run "net 30" (they have 30 days to pay from the date listed on the invoice), and a 1.5% late charge for each week thereafter. These terms are listed clearly on the invoice.
I have never in over 10 years had someone go past 30 days in payment.