Three Reasons I Sucked at Freelancing

I spend much of my time writing for SitePoint about the success of others, and sharing great tips and tricks I have learnt myself.

One great quote I really live by is that you should learn from your mistakes. Mistakes happen to the best of us; as long as you walk away with a lesson under your belt, you’ve made the best of a possibly poor situation.

I want to share with you three reasons I failed when I first started freelancing back in 1997. In fact, let’s make that one failure from 1995, and then two more in 1997. That’s right; 1995. A long time ago now, so I’ll forgive you if you’re young enough to laugh when I say my first failure was trying to sell something most people hadn’t even heard of.

That’s right; I hit the pavement trying to sell websites to companies who hadn’t heard of the internet. This was 1995; back then, this internet thing really was the wild frontier, and many businesses hadn’t heard of it. I got a few customers on board, but not enough to pay for the fancy office space I had leased, so I quickly shut shop.

Lesson number one? You really can be too early. I should have waited another year, and by then, the web was all over the media. I either didn’t hit the right early adopters, didn’t know how to sell well (and that certainly was part of it) or I was just plain too early.

The next two failures were two years later. The web had exploded, people now knew of the web, and although not everyone was convinced it was vital to have a website, there were enough people out there to carve out a living.

Two of my mistakes this time around were very close to each other. Mistake number one was not estimating the time correctly. I didn’t keep timesheets, I just guessed how long things took, and given that when I got “in the groove”, time often flew past … I really sucked at judging time.

The issue here is I’d say that it took me two hours to design this element. In reality, it took me four hours, yet I kept saying two hours over and over, compounding the problem. The opportunity losses from working for free when your only commodity is time can quickly add up to be unsustainable.

Lesson number two: Keep timesheets and get good at accurately understanding how long it takes you to complete a task.

The third mistake, when coupled with the last one, made my second attempt at freelancing a failure too. I completely misjudged what I should be charging per hour.

I estimated working from home, using an old computer, with no insurance or other costs, meant I could get away with charging close to nothing. Heck, even twice my hourly rate was still close to nothing! Combine that with not even billing for the hours I was working on projects meant my clients were getting a fantastic bargain, but I was on my way to being worse off than unemployed.

No wonder everyone accepted my quotes! I really sucked at valuing my own worth.

Lesson three: Understand your real hourly costs, and don’t be afraid to ask for a realistic price. Selling yourself short means you’ll sell yourself out of business.

Luckily for me it really was third time lucky; I started my third attempt at freelancing 10 years ago this month, and now I’m pleased to report this time it was a success (well, it’s a company now, which happened within three months of my diving into freelancing, so technically I’m not a freelancer now).

Look back on your early business time – what were some of your failures? Let’s share and learn from our mistakes. Feel free to post a comment below!

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  • Gary

    Great article, can totally relate to the low fees charged to customers

  • Faramarz Salehpour

    Hi

    I tried my hand at freelancing once before, developed some websites using PHP/MySQL and Drupal, but my experience was not impressive at all. The main problem was mostly about time/cost estimation. Mostly ended up with projects lagging too long past their estimated time or working so many extra hours for free!

    I read some material about this, but could not get anything really practical out of it. Since you’ve already made it, could you please share some tips or pointers regarding the issue, just the essential and crucial things.

    Cheers

  • http://www.onsman.com Ricky Onsman

    Good lessons, Miles. I’ve been freelancing for 12 years now with no end in sight, but I did have to learn those lessons. Today, there are some great online ways to analyse and manage your time. It’s still a hassle, but a must-do for a freelancer. Lesson 1 is really about understanding your market, and I’m still learning that one daily. Two other lessons I’ve learned are that if I build relationships with my clients, they’ll keep hiring me (I have about 20 clients who have me on a retainer now), and to throw Mon-Fri 9am-5pm out the window – as long as I track my time to keep it manageable.

    • Jason

      Hi Ricky,

      You say throw Mon-Fri 9-5 out of the window? Do you mean that you work more than 8 hours a day, 5 days a week? or you just work whenever?

      When I first started I worked whenever. That did not work out for me at all. I wasn’t able to communicate with clients well and I was getting stressed from working too long some days. So I have tried to go back to the Mon-Fri, 9-5 to fix these issues and it has helped a lot. The weekend is my time – nothing more important than down time.

  • http://www.rainbowseo.com rainbowseo

    Freelancing always sounds easier than it is… but without having the steady income a regular job afford you it can be pretty stressful. It’s always best to transition gradually into freelancing…

  • Jane

    Great article. I have done the mistakes two and three many times, when I was working for a start up development firm. Start up means, there is no PM to do the estimates for you, you are on your own. I did learn my time estimates over time.
    Still, when I started freelancing, I would have done the mistake of charging less again. The one thing opened my eyes is my husband’s dialogue, “With your experience, you are charging less for a project means you are undermining the efforts of all peer freelancers”. When I quote reasonably for a project, its not for my living alone, its for all my fellow people out there. I always keep that in mind.

  • http://www.wpbrix.com Nico

    Hi Miles, thanks for sharing your experience. I also made the same mistakes. When I started I didn’t had a clue how much I could charge. So I started charging way to less. Today, I learned from my mistakes. I’m pretty good at estimating the time, but sometimes there is something you just didn’t tought about. Recently I took a “Project managment” course to solve this and how to avoid working for free. I can recommend this to all freelancers!!

    • Mohammed Naseer

      can you tell us what the course is if you don’t mind – many thanks

  • http://smallbusinessmarketingsucks.com/ John Tabita

    Great article, Miles. Here’s my top three:

    Foolishly attaching payments to production milestones, like “final payment upon completion,” then waiting months to get paid until the client finally sent content.

    Writing proposals to close the deal instead of just asking for the sale at the end of the meeting.

    Meeting with anyone with a pulse who expressed interest in my services, instead of pre-qualifying them ahead of time.

    • Jason

      “final payment upon completion”, yes has caused some grief in the past. You really need to define the completion. Make sure you know when your phase of the project is up. Nothing worse than waiting months for something.

      Then again, you never know when the accounts lady is going to be sick, away on holiday, quit, feeding her cat? oh the excuses for missed payments =)

  • http://www.incitegraphics.com Ira McCray

    Great article Miles. I haven’t made the full transition just yet, but I am preparing for the day. I’ve learned not to spend too much time on clients who don’t value your work. As John mentioned above, I’ve spent countless hours writing proposals hoping that it does the selling for me. You have to value your work or no one else will. Sometimes we get thirsty and accept any type of project just to get some money. This is the wrong mindset. You explain a lot of other good details in your book “Guide to Successful Freelancing”. I highly recommend it to anyone looking to make the leap from Corporate.

  • Liz

    Miles, thanks for sharing and requesting reader stories about their freelancing experiences.

    Time estimation has always been my down fall as well. That’s the one (only?) good thing about working a regular job for a steady employer — they tend to pay you just for showing up. And even though the people who employ us want to get the most for their money, they sometimes forget about hiring to get quality rather than to be able to say they paid the lowest price. That’s why I like Jane’s comment about charging for the benefit of other developers/designers trying to make a living.

    We have to remember that freelancers are good for business because companies generally don’t pay for our health benefits, a desk at their location, or the upkeep and accounting for office hardware and software. It’s up to me, the freelancer, to keep my skills and equipment updated. In order to do that, I’ve/we’ve got to honor our own talent and drive even if we’re starting out with basic skill sets.

    At this point I think that one of those skill sets should be project management. Another skill set is interpersonal relations. Oh, and sales. And marketing. There’s a lot to know — and THAT is why we get to charge the big bucks!

  • Joe

    If a prospective client says to an effect, “My last designer/developer didn’t do this, that, and the other, etc….” or “They never return my phone calls or reply to my emails…” or ask “Can you put this stack of papers in a website for $50???” or “Do you need another portfolio piece?” I can tell that they are usually demanding and expect the world for little to nothing. You will also become their personal assistant for everything “tech” related. Avoid them like the plague or give them an estimate 10x what the project would normally be worth. Good clients realize the value of your services, typically have money in the bank, and don’t bat an eye at spending it on your services.

    • Jason

      Agreed but it is a two way street. At first you won’t want to upset a client because you need money but after a while and despite the money you have to tell “some” clients where to get off or where to go. Best to handle it without being rude or smug. Be polite and informative – but some clients really need to be told that they are being… difficult.

  • Mohammed Naseer

    A great article, but doesn’t being a freelancer and having a company go hand in hand. As a freelancer do you not pay taxes or maybe I don’t know what the term means. It got me thinking maybe a freelancer is like doing odd jobs that he lands here and there and therefore pays no taxes.

    • Jason

      Sadly, everyone has to pay tax. You can start a company as one man and some people highly recommend this due to the tax benefits. There are pros and cons and they will change per country.

  • Mohammed Naseer

    One other thing I am unclear about ~ in the beginning when you are learning/freelancing do you not make mistakes by offering wild figures for time estimates and once you get better at doing what you are doing then you are able to estimate time accurately. And how do you go about estimating the right hourly rate as a beginner.

  • WiLdscribe

    It seems like I copied Mile’s business plan.

    I launched a website development company in late 1994 and by mid-1995, I was out of business. For the same reasons too: I didn’t know how to sell and those clients that I did attract, I was not charging enough. My other issue was I was doing everything myself – from sales to coding.

    I tried freelancing again 2001 and did a better job. I managed to get a couple clients, but I was still learning how to sell and made the mistake of being the low bidder on a couple projects. Finally the economy was bad in New York and had to quit again.

    Now I am on the my third try and have learned from my previous mistakes. I have been freelancing for almost two years and I am making some decent money. My strategy now is partner with other professionals, like PR firms and ad agencies. I let them find the clients and I do the work or farm the work out to other freelancers.

    It’s finally working.

    Another lesson I want to add to Mile’s list is find the right clients. You want to find people who appreciate quality work and can pay appropriately. You need to avoid clients with high expectations and low budgets.

  • Geoff Burke (no relation, I think)

    My #1 reason I sucked at freelancing is I don’t know how to market myself. I come from a work background where I was in an office and never really had to approach people and ask for contracts. Now that I have to find clients, I find myself it tough going and am now thinking I might go back to 9-5.

    My #2 and #3 reasons are the same as above: Timesheets and estimating hours. This is particularly true when the client’s request was for something non-standard that I thought would be easier that it ended up being. But, of course, my ego wouldn’t allow me to see that.

    A couple of things that helped:

    [webpage] Lullabot’s The Art of Estimation – http://www.lullabot.com/articles/art-estimation

    [book] Software Estimation: Demystifying the Black Art by Steve McConnell – http://www.amazon.ca/Software-Estimation-Demystifying-Black-Art/dp/0735605351

  • gihrig

    I can relate to all the things mentioned above, I guess you have to learn by experience.

    The thing that finally killed my interest in freelancing, after about ten years of trying, was the inability to accurately predict how long something that I had never done before really should take. I thought I had a pretty good idea, and my clients generally agree to my estimated cost. But, when a project estimated at two months actually takes six… Well that happened too many times.

  • http://www.shekinahinvestlimited.com Tamanda

    It’s a small business that functions more or less like freelancing. Goodness, the points you site are spot on.. it’s almost frightening. All the comments here so far are those I can identify with in having done (and shamefully still) actually still do.