Posts Tagged ‘freelance’

A question for you: When you look back at your historical quotations, estimates and proposals, is it clear on the documents how long the figures are valid for?

Put it another way, what happens if a prospect from a few years ago knocks on your door and expects you to honour the quotation you produced which is based on your 2006 prices? Do you honour it, or do you expect that you can refresh the quotation with the current prices and everybody will be happy?

On the flip side of this, do you produce quotations and fall foul of saying “this quotation is only valid for 90 days from the date of quotation” (or other such words?) After all, if a prospect wants to raise an order on day 91, I am sure you will be happy to take their money.

For me, the compromise is to reference the date of your annual (hopefully scheduled) rates review, and make that the cut off date when quotations will be valid up to.

Something along the lines of:

This quotation is valid up to and including the date of our annual rates review, which is scheduled on the 2nd of August each year. On the next review date after the date of this quotation, the prices shown will need to be refreshed with any amended prices to be valid.

In my house, we have a wooden plaque with our coat of arms – a merged coat of arms created from my wife’s family crest and my own (with a few whimsical touches thrown in for good measure to make it “us”). On this plaque there are two phrases included which are our family mottos (me and my wife – not our historical family’s).

Every so often, my 10 year old daughter looks at the plaque, runs her fingers over the crest and words, and repeats the phrases to herself – fascinated by their meaning (which we explained when she was very little).

These phrases are not only our family mottos, not only the way we do business, but also the way we ‘do life’.

The phrases are:

“Te Dormio Te Amittere” – which is below our family crest. It’s Latin, and when translated to English, it means “you snooze, you lose” (in other words.. DO IT NOW)

And the other phrase is….

Ask for Nothing and you shall receive it in abundance – not sure where this quotation came from, but it’s very powerful (for us).

Both of these quotes are about the same thing – getting what you want by asking for what you want – and asking now!!!

The Power of Asking

Which leads me on to asking – or more importantly, the way you ask. This can make a huge difference is business and life.

When I was at university studying psychology, I remember this professor giving a series of lectures on the method of asking – and it has stuck with me today. He taught my class that a few choice words can be the difference between getting what you need/want, and not getting anything at all.

Let me give you an example….

Suppose tonight, you have a craving for a steak for your dinner – oh yes, a nice big fat juicy steak – with chips (or fries for my American friends) and all the works – now doesn’t that sound good?

Well you could go home and say “What’s for Dinner?” and hope that in a very unusual alignment of the stars, your partner just happens to want the exact same thing – its not going to happen.

Better would be to say “I fancy steak tonight. Can we have steak tonight?”- which says what you want. But hold on, this still gives lots of other options. You could get a response of “sure thing” (great), but you might also get “no”, or “were having fish” or a host of other replies. So the question is good, but not great.

So what about something more demanding, that says what is going to happen such as “I am going to have steak tonight – want to join me in a steak?” – which says that you are definitely getting your meal of choice – but what about your partner? Well they still have a multiple choice of options including “yes”, “no”, “I have fish here – were having fish” etc. So better, but still not there – you still may be feasting on Mr Fish tonight.

The best way to get what you want is to ask with the assumption already made. “I’m in the mood for steak – yeah, steak is what I am going to have tonight. Now, what time shall we eat our steaks? You hungry now?”. It says your having steak – and it assumes your partner is going to have steak – but it still gives them control about what time to eat – so everybody feels that they have a say. Of course they can still go down the “I don’t want steak” or “Looks, here’s fish” option – but it’s a better conversation to have than the “What’s for dinner?” question.

You have set your position – the rest is down to negotiation.

All of this applies to business questions and more importantly, to selling.  You just need to check your customer for feedback to make sure you haven’t crossed the line (in which case, pass it off as humour and take a selling step backwards).  But isn’t a conversation which starts with something like “Well here’s the quote – now that we have gone through it, when would you like to schedule the project setup meeting and order the hardware?” a good conversation to be having?

When I am contracting on a customer site, one of the things I find most helpful to me is the alarm on my watch.

As per my last Freelancing verses Contracting post, with contracting we are being paid for our time, not for the products we produce.   So when I contract, it makes sense to me to ensure that I leave their offices each day as soon as the agreed hours have been met.

That may sound harsh or inflexible, but look at it this way – if a contract for resource time is for 7.5 hours a day and you end up skipping lunch and staying for an extra 30 minutes at the end of every day, that can add an extra hour or 90 minutes of effort a day.  Over a week this can add up to 7.5 hours – or an extra day of work.   You are not being paid for that time, so what you are effectively doing is either discounting your rates by 20%, or you are reducing the length of the final contract by a day a week.   If you do an extra week a month of unpaid work, its one week sooner when the contract will end (or wont get renewed).

Of course one of the problems of leaving on time is that you are running out of the door when the permanent workers may still be working.  But wait a minute – they are doing that not for the love of the work – they are doing it in the hope of a pay rise, or to further their career or just to keep their jobs.  As a contractor, you have none of these to worry about.  So why shouldn’t you leave on time?

I have found the best method of easing into the ‘leave on time’ is to initially work the hours agreed plus a bit more for the first week, and then to explain to everybody how I will miss a transport connection by leaving after the agreed time (oh the traffic is so bad after 5:15pm around here, oh I just miss my train connection, etc).  Then make sure you leave on time.  But to signal the exit by setting a discreet (but audible) alarm on my watch to signal and remind me when its time to end the day.

That way you do the hours, do the job, but your alarm is the one nagging you that it’s time to go.

Of course some contracts do pay overtime – in which case this is not needed.   But generally that’s not the way contracts work – you have a day rate for a fixed length of day.  So stop robbing or short changing yourself, and get out of the office on time.

PS – In case you are worried that this may effect any contract extensions, I have used this system on all my previous contracts, and never have I not been renewed or extended.

“Physical fitness is not only one of the most important keys to a healthy body, it is the basis of dynamic and creative intellectual activity.”
John F. Kennedy

I was looking at some trends recently for the self employed, and there has been a sharp increase in the weight of IT Workers, Americans and in particular, freelancers throughout the world.

Maybe it’s because we are all so busy working that we catch quick (but unhealthy) meals, or we don’t have time to exercise, or maybe it just goes with the territory.   However, as we all know, weight problems can lead to other problems, which can lead to the inability to work, which then leads to a lack of money.

But, I am not going to sit here and preach about getting healthy.  What I am going to do is talk about an option which may interest you… so please bear with me for just a while longer.

The World Is Stuffed Full of Secrets

What if I told you, the world was full of secret places, and hidden items – would you believe me?   What about if I told you a world-wide game of hide and seek was being played right now, very close to where you live and work?  Maybe right outside your house and office.

What about if I told you there was a way of getting a little exercise which is fun for you, fun for your family (and dog if you have one), and is not going to end up with you going down the gym or starting some major exercise regime?

Now what about if I told you its free?

Geocaching

I am talking about an activity called Geocaching.

Geocaching is a real-world, outdoor treasure hunting game using GPS-enabled devices. Participants navigate to a specific set of GPS coordinates and then attempt to find the geocache (container) hidden at that location.   I am not talking a virtual container here – I mean a real physical box with items inside.

There are tens of millions of these boxes hidden all over the world – all hidden from people who are not playing the game.  I can guarantee if you have left the house today, you will have walked or driven past a dozen or so without realising it.

If you have a modern mobile phone (iPhone, Android or even Symbian based), there will be a free Geocaching app which uses your phones GPS to guide you in this treasure hunt.   You simply pick a nice area, follow the guide and find the hidden containers (caches).

The containers can be in woods, parks, city streets, buildings, amusement parks, near rivers – anywhere.

Why I love It

Now the reason why I love it – it gets me away from work.  My family and I will go out for an hour or so, and we will go treasure hunting.  For that hour (or eight hours if we do it on a weekend), the family get quality me time, we all get some exercise, we all enjoy the challenge and I still get to use a gadget (to play the game).

Because we are always seeking different caches, the hunts take us to places we didn’t know existed.  We have discovered new pubs (bars), restaurants, woods, countryside paths, rivers, sights, historical buildings, walks, views and even people who we would never have known about if it were not for Geocaching.  We no longer have to visit the same places over and over again.

And being away from the normal work area means I have time to think, to plan, to recharge.  All whilst getting some exercise and staying fit enough to work.

Why not give Geocaching a try?

Business Partnerships can be great.  If you can find another company that compliments you, the result can be business opportunities that are bigger than the sum of the individual parts.  But, there can be one major problem with some partnerships – spec (free) work.

I have worked in partnership with many other companies in the past.  In each instance without exception, we have agreed who is the lead in the partnership, and the leader pays the other for their services.   This works for me – we can still run the process as a partnership, but money is not an issue.  Everybody knows where they stand.

Recently, I was asked to work in a partnership, but where the work was done on spec.   they asked that I (and my company) work for free, investing our time and resources for a share of the future possible sales of the resulting project.

Now don’t get me wrong – this sort of relationship may well work for some people.  I can see in situations where work is thin and money is tight (such as when two start-ups meet) this can be very tempting.   It may be very beneficial to all concerned, and the results in the future could be massive.

But the word to consider here is could.   Could to me is a gamble, a chance, a risk.   With such a relationship, you are of course assuming that the company/product you partner with is good enough to make a lot of sales – but what happens if it doesn’t?  It could be a lot of wasted effort for no returns.

Call it boring, but I prefer to know that I am going to be paid, how much and by when.   Anything else is just a gamble.

And the only time I gamble is when I order take away food.

In some ways your freelance, contracting and small business is a bit like a child.  You want to watch it grow and succeed, but you can never take your eyes of it in case it can get hurt.   There are many dangers to a growing business – from bad accounting, to loss making projects, through to difficult customers.  All can potentially cause your business to stumble, fall and fail.

Whilst it’s impossible to foresee all potential dangers and all issues that might arise, there are steps you can take to make your business as bullet proof as possible.  Whilst these may not stop all problems, they can deflect a lot of problems, and lessen the impact of those that do get through.

I (and my business) have been saved by a number of these pro-activate steps over the years:

20 ways to make your Business bullet proof:

1. Be specific about everything – when dealing with customers be specific in word, email and printed response on; dates, what you will provide, what you will do, what you won’t provide or do, what the customer should be doing
2. Get a signed work agreement for all work – get them to physically sign or e-sign the work agreements (a contract by any other name) before you start
3. Confirm every meeting action and phone call decision in an email – a quick “summary of our agreement” email ensures everybody is clear about what was said
4. Have a plan – without a plan you cannot stay on track.  Just chunk up the activities needed to make the delivery and track those done against those outstanding.  Include both your and your client’s activities
5. Save every project decision into a project email folder – I generally have an email folder for each project, with sub-folders for agreements, general communication and issues
6. Keep copies of your sent decision emails – place them in the same email project folder.  Very useful to pull out should disagreements arise.
7. Communicate – with everybody – all the time.  Nothing worse than a black hole where nobody knows what is happening.
8. Use project systems for communication – I use cloud based project management, which allows everybody to share what the status of the project is, tasks, risks, issues and project files.
9. Don’t assume anything – email or call and ask the question.  If you do make an assumption, confirm it with the customer and file the communication
10. Don’t leave it to the last minute – complete as soon as possible to add ‘breathing room’
11. If needed, get somebody else to be the bad guy – If you want to be the helpful person, use somebody else (a spouse maybe) to send the firm “NO” emails
12. Backup, backup and backup – Disks really do fail all the time.
13. Confirm as you go – Provide mock-ups, alpha, beta and other staged releases.  The sooner they can review, the sooner they can provide feedback and make sure everything is as they expect
14. Have a plan B for everything – customers, resources (that means you), order of work.  Things will always go wrong, but having an alternative plan means you can switch without worry
15. Track everything as you go – accounts, taxes, profits, time, deliverable items.  This way, you won’t be surprised with the tax amount to be paid, if you made money on projects, what is due.  Nothing worse than a tax bill which cannot be paid.
16. If a problem does exist, communicate with possible solutions – much better to say there is a problem, with 2 or 3 suggested solutions for the customer to pick from, than let the customer find out on their own.
17. Keep time, money and resources in reserve – whether working on customer projects, your business accounts, or internal work, factor in a buffer for all aspects.
18. In the event of change, control via ‘change management’ – don’t let projects or work slide out of control.  Stick to the agreed project agreement, and create new sub-projects once the main project is done and delivered.
19. Use tools such as Google Alerts to track you name – just in case somebody is really unhappy, Google Alerts will tell you as soon as somebody blogs or comments about you or your company on a forum.
20. Expect there will be trouble and roll with the blows – No matter what you do, problems will arise.  The secret is to control them in a calm way, find solutions, and keep the impact as small as possible.  The above steps will help.

I found myself in an interesting discussion the other day on profitability.  To be specific, the discussion was centred around how much profit is enough?  When you work on a project (be it a contract, or a freelance/small business ‘project’ for a customer), what is a typical profit % you should be happy with?

Now when I was a permie, working for somebody else in a large(ish) software house, it was drilled into me that they were looking at a profitability of around 25%.  This is fairly typical and expected.

Of course, how you measure profit can change the number, but they (and now me) calculated profit as the difference between how much you charge the customer, minus tax due, minus the cost of your time (including your expenses and tax).

So, take a project where your final invoice is for £1000, but your costs (for your time, salary, teas, coffees etc) add up to £750 – your simple profit may be £250 – but is it?  The answer is – no, it may actually be:

£1000 (invoice), minus £200 (vat element ),  minus £750 (your cost) = £50 profit.  And of course, of that £50 profit, you then have to remember that you pay corporation tax of around 21%, so that’s another £10.50p off the profit back to the government.  Ouch.  Where did the money go?

A couple of recent examples

I track my own time, so I can work out my own costs on projects.   This also allows me to make sure I am making a profit at all stages of the project.  When I am in profit, I am more open to scope creep and ‘favours’ for customers than when the profit starts to dissolve through unplanned work.

If I take 3 or 4 projects this year, the profitability has varied from a low of 22%, through to a high of 75% (yes, 75% of one project was profit).   This is achieved by efficiency savings through process and development automation, use of tools, and through running multiple projects at the same time.  Yet, each customer has still felt (I hope) that they received what they pay for and received good value for money.  I also charge as if our processes were performed manually (so we make money through our efficiencies).

Double Edged Sword of Profitability

Of course, being more profitable is a double edged sword.  Yes, it’s good to receive more money and it’s good to see the bank balance rise.  But, the amount of corporation tax grows with it – which hurts.   It’s a sad fact that in the UK and USA, most individuals are paying around 68% of our income in tax (think income tax, national insurance, then VAT/sales tax at 20%, extra duty on alcohol and fuel, insurance tax, etc).  When you run your own company, this increases to around 76% paid as tax (with corporation tax).

In a Nutshell

So what does this mean in terms of what you should make as a profit?  Well profit can only be made if people give you work.  Charge too much and you have higher profits but less work, charge too little and you make no profits and become a busy fool.  But think about how much profit you need (or want) to make, and track your projects to make sure you stay on track.

If in doubt, take 25% as a target, and adjust it as you go.

Last week I found myself in an interesting discussion with a Marketing guru.   This lady suggested to me that to sell more of my services, I needed to remember CP30 and R2D2 from Star Wars.   Yeah, I know…. its an odd comparison.  But stick with me.

The question she posed to me (and you should answer now) was as follows:

George Lucas phones you tonight to tell you that the star wars droids are real, and that you can have one for your home free of charge.   He will arrange for one to be delivered to your house tomorrow – which do you want – R2D2 or C3PO?

This marketing guru said that when asked, over 90% of people would pick R2D2.  There are many reasons for this – he is friendly (not sure how beeps and fart sounds can be friendly), he is cuter, he is more of a hero that C3PO, he is a lot less grumpy/stuck-up and he is a lot cooler than C3PO.

Great!   So R2D2 gets delivered, and he trundles around the house for a while.   But then what?   Yeah, he may be cool, but can you communicate with him?   Can he do the dishes?  Can he wash your car, make your bed, make you a cup of tea or pop some toast in the toaster for you?  No!

What you really NEED is C3PO.   He can do all the things that R2D2 can do (which is effectively talk to wall interface ports to open blast shield doors), plus make you tea, toast, etc.  He can even climb the stairs.

The point she (and now I) was making is that given a choice, peoples first choice is the cool, the trendy, the one that will get nods of approval from other people.  But what people really NEED is the thing that can do the job.

The secret is of course, is to make you service or product offering as cute and cool as R2D2, but once the wow factor has passed, to be able to get on and do the job.

Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures, the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge, has marked the upward surge of mankind and greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the U.S.A
Gordon Gecko, from the film Wall Street, 1987

Well Gordon Gecko may not have thought so, but Greed can be harmful.   It can hurt you, it can hurt your family, your working relationships and your business.  In my business mentoring group, one of the questions asked is ‘when is enough, enough?’.  When are you earning enough?  When do you have enough cash put by?  When do you have enough customers, enough work, and enough revenue?

I want to suggest that Greed is not good.  In fact, I would suggest it is far better for everybody not to be greedy, and to share the wealth.   My personal anti-greedy tips are:

• If you need new or better tools to complete a job, don’t be afraid to spend the money.  Better to have the right tools and make a little less money, than for the project to fail and not have any money at all.
• If you need help, hire help, and spread the wealth.  Don’t be afraid of reduced revenue by having to employ others to help you out.
• Don’t take on too much work.  Yes, it may be nice to be busy, but you need time out to relax, unwind, recharge and spend time with friends and family.
• Don’t be a mad cheap fool.  If all your quotes are being accepted with no haggle, you are charging too little.  Don’t be too greedy by accepting too much work and not being able to deliver.
• Don’t be a greedy Prima Donna – if you are too greedy with your rates, customers will go elsewhere.  . 
• Don’t be greedy with your praise – if people have helped you out, acknowledge their help with an email, a call or even a small gift.  They will be twice as likely to help you on the next project
• Don’t be greedy with the tasks.   You can’t do everything and shouldn’t be doing everything.  Share the work with others to give you more time for what you need to concentrate on.
• Do review your situation whenever time allows and acknowledge any greedy impulses.  Too much of anything (food, work or money) will lead to failure in one form or another
• Do enjoy the small things.   Don’t be so greedy for work, customers and money that you don’t stop and enjoy your life – the thing you are ultimately working for.

Meetings – don’t we just hate them?!?   The travel, the preparation, the setting up of projectors, the forgetting of the crucial cables.  Meetings can seriously eat into a freelancer or small business schedule.  But they are a necessity to good business and working as a team.

But why not try a virtual meeting?  Yes, it may not have the tactile feel of a face to face chat or a huddle over a project plan, but it also means that that you can do it in the comfort of your own chair, or in your underwear, or even in the bath.

So here are two FREE ways of holding virtual meetings:

Skype
From its original version, the Skype system continues to add more and more functionality.  In addition to the voice chat and text chat, Skype now allows free video conferencing and computer screen sharing.  There is a downside in that to screen share, you do need to have everybody in a video call first, which relies on a web cam and a FAST internet connection, but once connected, screen sharing works very well.   The other plus side is that with Skype, everything is included – voice, face to face and the screen share – so nothing else is needed for a great virtual meeting.  Of course, everybody in the meeting needs to be a registered skype user.   Skype provides a useful ‘how to share screens on skype’ tutorial for further information.

Mikogo
The alternative to skype that I would recommend is a FREE service called Mikogo.  This is a web based screen sharing and virtual meeting system.   The service does require the download of a small 1.6Mb application (as does most paid for virtual meeting products), but this adds a pop-of menu of features including whiteboard, annotations, freezing screen (so you can do stuff without others seeing), file transfer, participant pointers (you can see what your audience are talking about via hovering coloured dots) and a whole host of other features.  To invite others to a meeting, you just email them a web URL (shortcut) to a Mikogo virtual meeting room, and they enter a room code, password and their name to participate in the meeting.

Mikogo also has a dial in number for voice communication (with non-premium numbers for most counties), so you can talk and show at the same time.   Whilst it doesn’t offer the video chat that Skype offers, the fact that anybody with an internet connection can use it, with up to 10 participants makes it perfect for most virtual business meetings and discussions.   There is also a premium (paid) version of Mikogo for more meeting participants (upto 25).

Which one am I using and Why
Out of the two free options, when doing formal group meetings, I generally opt for Mikogo.  Skype is great for quick one to ones with distant workers, but Mikogo feels more professional.  Plus the features offered such as the whiteboard are so useful – just highlight sections of the screen, draw boxes, lines, whatever – to illustrate what you are talking about.   The final reason for selecting Mikogo is because not everybody uses Skype, and I don’t want to force anybody to register on any service to have a meeting with me.