If you found this article, most likely you have become interested in the idea of making extra money as a freelance web developer. If you aren’t sure where to start in web development, you may find my article about becoming a web developer helpful. I know for me, 10 years ago I was looking to do just that. My ultimate goal was to own my own business. Web development had become my path achieving those goals. Much like you feel now, I had no clue where to start. I had several questions including even the most basic how do I get paid (do I collect a check, how do I process credit cards, etc). At that time, there were no guides I could follow. I simply had to keep forging ahead through all of my concerns and uncertainties. Becoming the freelance web developer I had envisioned was not an easy path. Mostly because I was going about it blindly. In this article, I will to provide you with that guide I didn’t have. Giving you all the tips and tricks I wish someone would have given me.
Before I begin, I must put out there the disclaimer that I am not offering legal advice and do not possess the authority to do so. Any tips you may implement as a result of reading this article you agree that you are solely responsible for any outcomes.
Step 1 – Getting Legal
For me, this was probably the hardest part. Each jurisdiction has different rules around taxes, fictitious names, business license requirements, and so on. Although I didn’t consult legal counsel before starting my first company, I highly suggest that you do. This is because you will be able to conduct business with a clear mind and not have to worry about any ramifications of getting something wrong with the setup of your business. If you do decide to go about it on your own, at the very least, review the rules and regulations about operating a business in your local city, county, and state.
When I first setup all of this legal stuff for my freelance web development firm, I just opened it up as a Sole Proprietorship and created the business name as my own given name, using my own social security number. This made the setup so much easier than trying to operate under a fictitious name. With that being said, take your time in this area and really understand what you are getting into.
Step 2 – Handling Funds
Now that you’ve gotten past the hard part of this process, now comes the easier stuff. Be sure that you setup your a bank account separate than your personal bank account. This is where all your business transactions should occur. When you intermingle personal funds with business funds, it becomes very difficult to properly track your funds when it comes to tax time.
What will happen over time is that you will accumulate all your project payments into the account dedicated for your business. Once you have those funds there, you will want to debit payments to your personal account so you can keep track of how much you are paying yourself. There are two reasons you want to do this. The first one, I already touched on. Tax time becomes a pain when you can’t accurately depict how much you made from your freelance web development verses how much you brought in from your job. Secondly, this is important to do because you will want to treat your freelance work as a business. You will only be successful if you monitor both your income and expenditures from a business perspective. Once you start to intermingle the your business and personal funds, I promise you that you will look back and say “where did all that money I made go?”
Step 3 – Getting Your First Client
Now that you have everything you are all legal and have your business bank account, its time to rake in all that money! At least that is what I first thought when I started my practice. I am a dreamer and thought this was going to be easy. Somehow, I conjured up this idea that if I just got a business card, people would come to me right away. So here is how I got my first client.
What I found out very early in the process is that there are good clients and bad clients. Good clients tend to be people who understand what it is like to be a freelancer. Although I did not know this at the time, I set out to partner up with other freelancers. Today, I would start out by using a different platform. However, at the time, LinkedIn was a very reputable spot for connecting with other business people. I searched for people who owned design firms with 1 or two people. It turns out that many design firms I came across didn’t employ web developers directly. Instead, they worked with freelance web developers! Jackpot!! Design firms tended to be very good clients because they themselves are freelancers and understand what it is like to wait for that next invoice to be paid.
When I would reach out to a perspective client, I had a template email I would send:
Dear [contact name], I came across your information on [social media platform] and thought I would reach out because I see some potential in building a business relationship with you and your firm. I am just starting out in building my own web development business. When I came across your company profile, I felt inspired as I imagined at one point in time your company started out just like mine is. Even if you there is no opportunity to do business, at the very least, I would like to meet up with you to understand your business and maybe even pick up some tips on how I might grow mine. I'll even the coffee! Thanks, Joshua Johnson
You wouldn’t believe how many meetings I was able to book because of the email above
The key to landing your first client (and every other client after that), is landing that initial meeting. I had very little to no success in landing a client if I never met first with them in person. I found that if I landed that first in-person meeting, I would some how land them as a client. Even if it wasn’t right away, they would eventually call me for some type of work.
Step 4 – How Much Do I Charge?
I remember right after landing my first client, they asked me how much it would cost for them to have a WordPress website built. Number 1, I had no clue what WordPress was at the time. Number 2, I had no clue how much to charge. So I told that client I would get back to them by the end of the next business day. That night, I went into researching how much I should charge. Again, there was no information about what other freelance web developers where charging at the time. So I just made up a number. I went with $75.00 dollars per hour.
My first client walked away!
Right after I told my very first client I was going to charge them $75.00 dollars per hour, they decided that they couldn’t afford me and walked away. Being desperate for money, as they were on their way out, I yelled out, “I’ll build the website for $1,200.00!” In that moment, the client turned around, walked back, and shook my hand. I just landed my first job!
Lesson learned – most clients prefer fixed cost.
The key to setting prices with clients is to realize that each client has a number in mind that they are willing to spend. So when you start setting prices by the hour, your setting the expectation that your work is based on the blank check policy. Meaning that a project might cost the client somewhere between one hour and infinity. Leaving it impossible for the client to ever determine how much they will spend with you.
My suggestion is to go into every client meeting with a fixed cost in mind. Present the fixed cost and negotiate from that point.
Step 5 – Collecting The Money
Ask any freelance web developer the biggest challenge of their job and they will tell you, collecting the money for completed work. This is a tough one because it is always so awkward having that discussion with your clients. Especially asking when they are going to pay. On top of that, there are a number of situations that could occur that could effect your client’s ability to pay your invoice.
The key to collecting payments in a timely manner is to set the expectation at the beginning of the project for when you expect to be paid. AND that you deliver what you say, when you say.
I think it is easy to see that TRUST is the key factor to collecting the money. If you aren’t delivering the project in a timely manner, why should your client pay in a timely manner. By showing your client that they can trust you, they are receiving the assurance that you will not run out on them once the project is over.
Other Tips To Becoming A Freelance Web Developer
How do I accept credit card payments?
When I first started as a freelance web developer, there was really only one way to collect payments. By check in the mail. You would issue an invoice and if you were lucky, you would receive the payment by the next month. Now I use PayPal. PayPal makes invoicing incredibly easy.
Should I require a down payment?
I myself do require a down payment for each project. Usually half down and half when finished. I am able to collect this down payment, mostly because, I have built up a reputation for delivering my projects.
Will I get sued?
Like anything else in life, you will only have to worry about getting sued, if you mess up. So deliver your project when you way your going to, and do a good job for your clients. You will have nothing to worry about.
Should I do any marketing?
Word of mouth is your best route for marketing. It’s free and only requires that you treat your clients well. I wouldn’t worry about marketing.