Shadow has a great post, and Slayerment has one too.
In the first 6 months in my freelance design business I didn’t think of this, and I finally caught on to it now. More then just having a different source of income, you can be known for sites you did, and get more clients. Think…37 signals!
I think it’s all about leverage, delegatuion and interpersonal skills. And yes there are billions yet to be made building sites. There are businesses poping up every day, somebody needs to build sites for them…
Well, I’ve been doing freelance work on the side for roughly five years. I started to focus more on it this year, but still work a fulltime job. I figure I can bring in $30k a year just doing freelance work on the weekends and spare nights. I’m considering moving to it fulltime as I’m turning down work a couple times a week now, but it’s a difficult decision. If anything, I’d keep a partime job for those days when work doesn’t come my way. You might get a one day job for $700, but then have no work for a few days, so you need to be careful.
Almost all my work comes from past clients. I don’t advertise, I don’t have a site which promotes my work or portfolio, but every couple weeks someone approaches me for their future projects. Honestly, I get paid well for my time, usually 50$/hr, and upwards to $100/hr for quick turnaround jobs. Clients keep returning because I provide quality work, but more importantly, because I provide valuable advice, suggestions, complete their work on time, and listen to what they need. If they require a quick job done within two hours for a meeting, I’ll have it done, and they’ll pay extra knowing it’ll be done.
Like a few others mentioned, you’ll never make a living taking the cheap route, trying to uncut the lowest price. Find those quality clients, and don’t lose them. They want quality work, but they’re more interested that it gets done to specifications and on time.
As well, choose your work very carefully. Don’t be afraid to turn down work. There are a lot of people out there that’ll waste your time, money, and hold off on paying till the last possible minute. Just keep searching through work until you find a great relationship with a quality client, and then don’t lose it. You can easily make a living off a handful of reliable clients that constantly return to you. Finding them is the biggest challenge. In five years, I’ve found two clients I’ll never want to lose. I could make a living just doing freelance work for both of them. However, relying on two people for your living isn’t a wise idea, so that’s why I’m still working a fulltime job until I can find a few more irreplaceable work relationships.
I just want to comment on a few parts of shadowbox’s excellent advice.
He’s completely right, don’t charge per hour. Currently I estimate my time, and talk with the client to decide on a budget. We decide on this figure before any work is done. This way, we both know what we’re getting into. I lucked out with my current clients. After work is done, we discuss whether the project went longer then expected, or remained on schedule. I’ll be honest with them, if more hours went into the work then we both anticipated, I’ll let them know and they’re more the happy to compensate me for my time. They want to keep me pleased with the payment, and I want to keep them pleased with my work and advice.
Like shadowbox said, keep searching for those better clients. They’re out there; you just need to be in the right place at the right time. I frequently look into smaller jobs just to see what kind of relationship will develop. Earlier this year, I decided to take on a smaller job for a few hundred, and that developed into close to $10k of work which I did on the side in the last few months. You can usually tell after talking with a client whether it’ll be worth while to take on their project, or if you should pass and keep looking. Be sure to avoid those time wasters and never ending projects.
Well, I’m rambling on. Personally I find you need to do quality work, but most importantly, develop a trusting relationship with your clients. Oh, and like Dan Schulz said, you’ll be spending a lot of time getting the ball rolling. You’re wearing all the hats, remember it’s a business and not all fun designing web sites. Personally I enjoy the change, I like seeking out the work, not knowing what to expect next, not knowing if I’ll pickup a great contract job tomorrow. You need to enjoy more then just designing the sites, a lot of your time will be elsewhere.
I would suggest that you get a full-time job and try doing web development in weekends. You will get a feel for it and you will also come know about marketing, client retention, etc., Instead of jumping into full-time web development, you can try this alternative path and see how it goes.
Personally, I think doing web development as a freelancer is not lucrative.
Wonderful thread I must say 
Everyone shared their view which is useful for everyone. Sharing of knowledge and experience to help each other.
Just curious. What percentage of the time do you spending finding clients versus what percentage doing web work?
A great post, I am not a freelancer. But still a worth while read with some great points.
Si
Superb post. Please come and work with me shadowbox 
Aother point I would add which may or may not have been raised already. Decide on something that will set you apart from your competitors (whether that be attention to detail, customer service skills, post-work support or whatever) and focus on getting this across to your clients.
One of the things I notice when trying to get new work is that clients will always ask:
“What can you do that is different from other designers I have spoken to?”
If you have a ready-made reply for them and the facts (with some client references) then it might be the difference between getting the contract or not.
Freelancing doesn’t just involve being a good web designer/developer. You need to learn the art of sales and advertising (not to mention accounting 
)
In my opinion, I would concentrate on developing a service or something you can do once and re-sell time and time again. The hard part will be choosing something in the first place.
Take the popular CandyPress.com shopping cart software. The original developer created this a couple of years ago in his spare time and it was (and still is) excellent, then a larger company came along and bought him out.
Obviously this doesn’t happen to everyone but you get the idea!
What’s a master’s worth nowadays? I’ll bet there are thousands of people with master’s degrees flipping burgers at McDonalds and asking, “Want fries with dat?”
Ha ha. Very true. A master’s degree gives you the ability to do more, though you have to make something of it. It doesn’t work for itself as much as many people hopes it would.
To answer to the original posts question…
Yes, I think it is possible to make a living as a freelancer. If I did not think it is possible, I would not be making the attempt right now. Although I must say that the attempt is mighty difficult. I’m sure some people fail at at the attempt. But I do see other people working as a freelancer full-time. I don’t know if they are making lots or little, but at least they are living – “making a living” that is.
If you do decide to make the attempt, here is a bit of advice. You have to force your mind to think that it is possible and that in particular it is possible for you. I forgot what concept they call this in pyschology, but this kind of mindset will increase your chances.
Although there are benefits to going through the company routes first besides making the attempt. You may have greater opportunity (or luxury) to make the attempt when you are young, rather than later in life where you have financial and family responsibilities and obligations. Afterall, a student coming out of school is used to having no money. But if you switch to freelancing after making lots of money at a company, you might have to get used to the drop in pay.
> What’s a master’s worth nowadays? I’ll bet there are thousands of people with master’s degrees flipping burgers at McDonalds and asking, “Want fries with dat?”
Yeah, and there are a lot of web-developers earning less than the burger flippers. I’ll bet there are thousands of people with development skills who don’t earn a living wage.
It’s a shame that the most popular are the least accessible. 
Networking is the key. I worked at a small web shop (4 people) and we more than enough work to keep us busy. This was because we had ad agencies, computer networking companies, and marketing companies that we “partnered” with. Our clients needed ads, computer hardware technicians, and marketing so we sent them to our “friends” companies. When our buddies had clients needing web programming or design they sent them our way.
Always charge as much as you can if your work is good enough to back that up.
hey yes you can charge as much as you can but at the same time make it reasonable so that he selects you
This has been a very interesting thread. Thank you.
I am not currently freelancing, but I completely agree that one shouldn’t undercharge for their services. When I hire people for a project, I always choose the one whom I feel will deliver a superior product. Of course, we negotiate price, but I feel that people should get paid well for quality.
On a related topic, I am actually trying to find a freelancer (or even an actual employee)? I am looking for a 2.0 programmer (Ajax-ImageMagick) and am a little overwhelmed with the options. What is the best place to find good programmers? Elance? Craigslist? Crunchboard? gigs.37signals? This site?
elance or 37s seem to be the best. at any cost avoid rentacoder and scriptlance. also you should ask the people you cooperate with or cooperated for a referral.
I prefer to charge per project than per hour. I also am up late at night because I sometime can pick up “emergency requests” where some random guy needs my help regardless of the cost.