Posts Tagged ‘freelancers’

Today’s final post is a letter which I dearly wish I could send back in time to myself in the past; a younger me from ten years ago when I first made the leap from permanent employment status to Freelancer.   I think it will be useful to other freelancers who are either just starting out, or are struggling.

Without any further delay or waffle…

Dear younger and more inexperienced me,

As you read this, you will be just starting out freelancing. It’s a scary experience. There is nobody to hold your hand, or guide you, or give you advice. At least, I know it seems this way. But I wanted to drop you a quick line to reassure you about a few things. Plus I wanted to include some really good advice, which will stop you making some silly and expensive mistakes.

It may seem that you are own your own, but there are a lot of great resources out there. The web is full of freelancers who have gone through what you are going through, and some people have been kind enough to write those experiences down in books or web blogs (such as this one) – all it takes is for you to take the effort to read them, understand them, and follow the advice. But remember, if you don’t bother looking, or take that advice, and you make the mistakes other are trying to help you avoid – then there is nobody to blame than yourself.

I am sorry to say that there will be hard times, and tough times, times full of worry when you wont be able to sleep at night, times of self doubt, and times where things seem very unfair. All freelancers and small business owners go through this, but at the end of the day, you will do OK. Anybody who makes the effort to rise above the average, who has put in the hard work, and uses the resources that are out there will do OK – better than OK in fact. In the end, choosing a freelance life will be one of the best decisions you will ever make.

But there are things that will help you on your way. Dear younger me, please listen to these, because these are nuggets of wisdom from years of experience. These tips will save you time, money, effort, and will make the whole thing so much more enjoyable. They will also allow you to rise above the troubling times.

My advice to you as you start out freelancing is:

1. When times seem tough, don’t sweat the small stuff. If things seem unfair – that’s because they are – nobody ever said life was going to be a fair game. Either accept those things as unfair and move on, or change them. But don’t lose sleep about the small or unfair things
2. Build up your list of supporters from the start. Have a good bank manager who you can contact whenever you want, an accountant who will explain things to you in detail, and make sure your partner (wife/husband) is included in everything you do
3. Do not let the accountant run your finances. Keep everything close. Don’t let the accountant charge you too much or have your accounts vanish in to a black hole. Instead, use online accounting from day one (the accountant should be there to sign off the accounts and save your money). Having a clear picture of your accounts and cash flow every moment is key not only in making decisions, but allowing you to sleep at night.
4. Know what you are doing it all for. Have a set of goals, and review them regularly. Get hold of a copy of the success principles, and read it – twice a year. It’s the best book on the planet! Trust me on that
5. Do not waste effort trying to keep everybody up to date on project progress – you will end up stressing about projects and being overworked. Instead, invest in a cloud based project management system – the moment you do, your business world will change in leaps and bounds. You will never look back
6. Don’t chase the money. Customers will try to take you in directions you are not prepared to go. It’s ok to say no if the work does not interest you, is not inline with what you want to do, or how you picture your small company. Be strong with customers.
7. Don’t be scared to take on work involving skills you don’t have. Whilst you will be reluctant to do this initially, eventually you will come to realise that this will lead to you growing in skills and confidence, which will make your time more valuable.
8. Invest in time management tools. Your time is money, so use tools like Evernote to keep track of everything you do and create, and re-use it over and over again. When you start doing this, you will see your worth grow.
9. Get everything down on paper – simple terms, agreements and contracts – and get them signed. This will get you out of more problems than you could possibly imagine.
10. And get a mentor. Approach your old bosses, or a local mentoring group, and become accountable. It’s also a great way to make new friends and stay in touch with what is happening ion the business world.

Younger me, its important to remember to enjoy the ride. Yes, times will be tough, customers nasty, and sometimes money will be tight – but nether the less, enjoy the ride. Getting where ever you are going is half the fun.

Regards

A more experienced Me

And that’s It!!
At the start of 2012, I said that this blog would finished at the end of 2012 – and as I type this, it’s December 2012.  So that’s it – the blog is done.  There is no more.

Dear reader, whoever you are, I really hope that you have found this blog useful.  I have found it fun to create, and get my thoughts, systems, and processes down on (electronic) paper.   I hope that you have gained something from reading my advice.

My advice does work.  I am not perfect, I do not run the perfect company, I make as many mistakes as any other person out there, but my company has grown year in and year out using the tips I have written down.  Most of my advice comes from people who are far more experienced and successful than me – so if any of my advice, or systems I describe feel right to you – give them a try – see if they will help you grow your own company.

As I sign off from my blog, I wish you dear reader well.  I hope your company grows as you want it to, and I hope to meet you in the real world at some point.

As for me, I will continue on with growing my business, heading towards my goals, but now without the need to document it here.  This blog will remain on the net until the end of 2013, at which time it will then be consigned to the great internet dustbin.

Goodbye and good luck.

Jaffa Brown
Author of this Web site , Freelancer, Small Business Owner and passionate goal setter/achiever
December 20^th, 2012.

In the last post on the series regarding my freelance Passive Income project, I wanted to wrap it up with where I am now, and how it all worked out for me (so far).

I started my passive income Buy-To-Let project in the spring of 2012, and I am writing up this wrap-up entry at the end of December 2012.  So in theory, the project has been running for 8 months.

How long before I made Money?
As I said in my previous post on my buy to let project, the purchase of the rental property completed on Wednesday, 25^th July.   We spent the next week with decorators in making the place fit to live in – they decorated the walls and ceilings, we replaced all the light fittings, replaced the curtain poles, purchased new white goods (washing machine, fridge freezer, put in a dish washer).  We then selected the property management company, and on the July 30^th, the agents went in to take pictures and advertised the property.

The management agency initially advertised the property at a rate of £750 per flat per month.   We had budgeted for £700 a month, so we were initially delighted.   But a week of no interest and a bit of right move research showed there were a lot of similar properties for rental at £725 – so we instructed the agents to reduce the price to £720 a month per flat.

That was the right move – within days, viewings had increased through the roof, and by the 8^th August (2 weeks after completion), we had tenants agreed on all flats.  In fact, on the majority, we had multiple offers and we were given different options about which tenants we wanted – all tenants were offering the £720 asking price – so we were above budget.  Happy Days.   On two of the flats, prospects got into a bidding war, on on these flats, we ended up accepting a higher offer of £750 a month.   Even better!!!

How The Money Works
At the start of the project, I created a spread sheet with the budgets for the project (per flat).    But, now that money was coming in, I double checked the income, which worked as follows:

The block of flats we purchased

Each month a tenant would pay £720 (2 were paying £750).   Of this, the funds initially worked out as….. £520 went back to paying back the loan on the property – interest and principle (so the tenants were paying off our loans – nice!), £49 went to the managing agent (their fee for dealing with finding the tenants, collecting rent, dealing with any tenant problems), which left £151 profit per month per flat.

However, we decided that ever 4 months, the extra income money would be then transferred back to the loan payments.  Our lender had a clause which said when we pay off a chunk on or above £500, the interest is recalculated.   So paying the additional income not only reduced our debt amount, but also changed the monthly payments back to them.  So on month 5, the £520 loan payment reduced to £507, which means that each month our profit increased to £164 per flat.  It may not seem a massive leap – but its compounded – every 4 months the loan payments went down and the profit went up – exponentially.

And of course – this is cash in profit (from rent).  On top of this, our share of the property increases (as the loan is repaid) so that increases the net worth, and if the properties increase in value, that’s triple bubble on the passive income.

 It’s a rocky Road Ahead
Of course, is a great picture now.   My company owns more property, which hopefully will increase in value, and in the mean time, my tenants pay off my loans which means that in a few years, I will own the property outright (and so will double my originally invested money).  Once the loan is paid off, all rental income is then passive income.

BUT, despite all the efforts of the central banks, Europe, the USA is in a desperate financial state (and soon Asia will join them).  This means that interest rates could change very quickly from the current historical lows to shocking highs – who knows.    My own predictions are that in the next 6 to 12 months, interest rates will drop further (to ZERO %?!?), before starting to grow – but that is why we are keen to reduce the loan amount as quickly as possible.

However, if you are thinking about following me into the Buy-To-Let passive income route, careful consideration should be given to the turmoil which may follow in a few years time.

In Summary
when I started this project, I was looking for a passive income stream, and I found one that I am happy with.  Yes, its not as ‘freelancery’ as say writing e-books, or developing a sell-able software product or generating money through advertising, but all of these seem to be hard work for little return.   For my investments, I am already generating a reasonable amount of money.  And whilst the monthly income may not be shockingly high, it compounds up very nicely and very quickly, and will generate a big pile of catch with little no no risk or work – just what I was looking for.

It’s still early days in this project.  I am not looking for a quick win or to make millions – but it is going to generate cash over my ten year plan.  If things continue in the future as they have done in this project, I will certainly be looking to expand into more properties whenever a major non-passive (regular day job) project generates sufficient cash to allow additional investment.

So, that’s it – that’s my passive income project.

What do you think??

Continuing on with my passive income Buy To Let project, I wanted to touch on some of the problems I encountered on the first part of the project – which were all around finding and buying a property to let.

On Wednesday 17^th July 2012, the exchange and completion on the property took place.   Because we were keen to get cracking on finding tenants (and start earning money), we made sure that we exchanged and completed on the same day.

We also did this as we had a schedule of work to do to make the property letable.  Keeping the fact that empty (or void) days means a loss whilst a filled (or let) day means a profit, we scheduled everything around this day.  We had arranged a week before the exchange/completion so that the moment we completed, our work force went in with a list of items to do.

The Work to Make Good
For our first buy to let property, we wanted a mix of the easy things that we could do ourselves (and so save time and money) and those that we would just pay for and get the professionals to do.    Our list consisted of:

• Paint all the walls and repair ceiling cracks (professionals)
• Service the central heating and report (professionals – British Gas – on a landlords service/maintenance/certificate deal)
• Put up window curtain poles and curtains (us)
• Replace worn out taps, a new radiator and other plumbing jobs (professionals)
• Purchase and install new dishwasher, washer/dryer and fridge freezer (us)
• Fit coat hooks and shower screen (us)
• Clean the carpets and oven (professionals)
• General clean (Windows, sinks, etc) (us)

We timed all of this so that the moment we got the keys – the various people would arrive and start work.   It was an interesting week of project management to make sure everybody could do their part over the next few days without stepping on each other or getting in each others way.

We created a mini project plan for all the teaks, including the purchasing of the required items (from white goods, to a kitchen sink, to radiators and even paint) so that everything should (and did) fall into place.

The Problems and Advice
Of course, up to the exchange and completion, things did not always run to plan.   We hit no end of problems in the purchase which included:

• Having to change lenders 3 times – each lender had strange made up rules on what they would lend to (for instance, the original Bank Of China would not lend on any property within 5 miles of a train station – which of course ruled out almost all towns and cities in the UK)
• Delays in funding meant delays in purchase, which meant somebody else came sniffing and we got ourselves into a mini bidding war (which increased our costs slightly)
• Delays in funding also meant that more work was needed by the legal bods, which added some more cost onto the purchase

And of course the delays also added to a little bit of stress to our own activities

Bending and Flipping Back
In the end, we completed on the purchase (and I had a cup cake to celebrate).  And the work kicked off on the rapid refurbishment project.

Whilst a lot of people go through a property purchase, its better with a Buy TO Let, as we wont be living there so there is no emotion involved.   If the numbers still made sense and worked – the answer was always going to be yes – if not, then we would have canned the project.

So it was a question of just rolling with any setbacks, and snapping back (like grass) once they had passed.  Oh, and remembering to get on with the day job whilst all of this was going on.

Today I am going to continue talking about my Passive Income Project, and expand in detail about why the maths worked for me and why I selected Buy To Let as my method of generating passive income.

As I said in the original post (when I made the decision to start a passive income project), I had already done the maths of general investing via savings accounts and bonds– and it really did not look good. Frankly, no bank or investment account out there could beat inflation without taking some very serious risks.

So I looked at the maths of other passive income projects – and without going into the maths of the other 3 or 4 options I looked at, Buy To Let had the best balance between risk (almost none) verses return (a very good return).  But more analysis was needed.

My Buy To Let Maths
So I created (yet) another spreadsheet to work out the return. There was one spreadsheet for each passive income project, but the calculations for the Buy To Let passive income project can be viewed here (all the figures are the actuals – I have not tweaked this spreadsheet to hide any figures).  See some notes below on the spreadsheet.

Now there are few things to consider when thinking about a Buy To Let option within a company (note, I am not a financial expert, so PLEASE check your own facts if you decide to move in this general direction):

It has Never Been Done Before
One of the things that was pointed out to be fairly early on (by a so called business expert I had a coffee with in the early days of looking at various passive income options) is that no companies in the past had invested in residential properties. Commercial property rental, yes, but not residential.

Well let me put that issue to bed. There are lots of companies that under a Limited Company, purchase residential properties and then rent them out. The bigger ones are called Housing Associations – and I have done freelance work for one or two in the past. And I can tell you, they make A LOT of profit. Actually, the returns that they make are staggering.

Corporation Tax
When you make a profit in a company, you pay corporation tax on the profit. And you have to pay corporation tax twice. First, you pay it each year on the rental income. This equation is (in the UK) RentalIncome minus (InterestCharges + ManagamentCharges). Note, that the deduction is on Interest charges only – if you have a repayment loan or mortgage, then you can only deduct the interest changes, not the full repayment per month (see the calculations in my spread sheet).

Also, when you eventually sell the property, you have to pay corporation tax again on the profit from the sale. From the profit, you can deduct the cost of purchase and sale – so all the legals and duties. Again, the spread sheet covers this quite well (I hope).

There is Growth Tax to Pay – one way or another
The other thing (and this is critical) is that there is personal tax to pay – at some point. If you want to invest in a Buy to Let project under your own name, then there is tax to pay on the cash that you withdraw from the company at the start. If you invest in Buy To Let through the company, then after the sale is processed and the corporation tax is paid, you still have to pay the personal tax to get the money out of the company. Which ever time you do it, there is tax to pay (unless you have a ‘get out’ plan – which I have – and a clever accountant).

VAT
Now there is some good news in the form of VAT. If you do a Buy To Let through the company, then those bills you get (such as decoration etc) can be reduced by the VAT element – so there is a saving (and therefore profit) to be made there.

Clearly there are lots of other factors to include – how many months you will not get rental income for because of a tenants change (my spreadsheet is based on 1 month a year as  ‘void’), property value growth (or decline) over time (I hope I am buying when things are their worse and properties can only go up in value), decoration costs etc. You will see most of these listed in the spreadsheet.

Notes on the Spreadsheet
In the sheet, you will see notes next to each item on what is covered.  The two yellow boxes are (for me) the big numbers which change all the rest of the values – the purchase price of a property and how much rental I can receive per month – from these most of the maths are then calculated.   The blue boxes are the other variables – such as amount of redecoration per month etc.   In my spreadsheet, typical values have been used.

Getting in checked
Once I had completed my spreadsheet for the properties I was interested in, I had my maths checked by other people.   The numbers were checked by my business bank manager, my personal Independent Financial Adviser (IFA) and my accountant.  All agreed the numbers looked sound.   Not one of these individuals asked for payment to check my spreadsheet.

I am going to continue today talking about my passive income project which I started talking about last week.

Once I had (provisionally) decided that entering the Buy to Let residential market was my best option for generating passive income, my next priority was to de-risk the project.

I Don’t Like Risk
For me, risk was a major consideration. Clearly I wanted a good return on my financial investment, but more of a consideration is that I did not want to harm my existing company in any way. This meant that I needed to know that I had sufficient money in the business to get everything set up and a tenant in place before cash ran out.

Or put it another way, I wanted to be able to de-couple the cash needed for the Buy To Let project from the day to day cash needed for my main business.

For this, I needed a good cash flow projection. So I hit the spreadsheets.

My Project Projection
I created a cash flow forecast for the next 12 months of my business. I was already tracking future cash flow of my business through an application called Float (which was linked to the FreeAgent online account system), but based on my principle of treble checking everything from different angles, I created a spreadsheet with my own analysis.

Outgoings came from the last 12 months from my companies P&L report (lifted directly from FreeAgent). I then averaged the expenses per month and then projected these forward for the next 12 months.

For income (main business), I put in my previously calculated day rate, and multiplied the rate by the number of workable days per month. For workable days, I worked out the number of week days per month, and then removed the bank holidays (there seemed to be lots in 2012), and my scheduled vacation days when I knew I would not be working. This then gave me really hard solid numbers for income and outgoings per month, and therefore a cash flow.

Next, I put in the taxes for the next 12 months. FreeAgent had done a lot of the hard maths for me in terms of VAT payable and Corporation tax over the next 12 months – so I put these into the spreadsheet. That meant I did not have to worry about paying taxes at any point – the money was already allocated. Another less thing to think about.

Finally, I put into the equation my current company bank balance and the money I would be investing in the business – and the result was – it worked. I could happily transfer a lot of the company cash into the Buy To Let property, and my company would stay afloat with a tidy cash balance left in the company account to tide me over any hiccups (sickness, loss of customers, etc). The numbers also tied up with the cash flow forecast that Float was projecting – as I say, nice to have the same answer from two different directions.

Want to Use My Spreadsheet?
If you would like to see/use this cash flow spreadsheet, you can download a version here. Note, that to keep my life simple, my calculations were all WITHOUT vat – i.e, as if I was not charging VAT on my invoices nor being charged VAT on my bills – as at the end of the day these generally sort themselves out. It also meant I did not have to project VAT payments.

Also, the numbers in the cash flow spreadsheet have been tweaked for public viewing – not really going to tell everybody how much I earn or amount of tax that I pay  ;-)

Over the next few weeks I am going to be talking about my Passive Income project.

As I have talked about many times in the past, I wanted a way of generating money for my company regardless of what I was doing – eating, sleeping, working – I wanted to generate more revenue and more profit.

The next few posts describe the reason for this decision, the when, the how and the results. I will include my spreadsheets, my maths and the outcome – warts and all.

It is worth noting that these entries were written between the Spring and Winter of 2012, and stacked up to be available once the project was completed and had settled down.

I hope they prove useful.

It started with a problem
At the start of 2012, my company closed its 2011 financial year end. Thanks to some hard work and a lot of luck, I found that my company was sitting on a fairly large chunk of money. After I had taken account of the money to be paid on the profits (Value Added Tax (VAT) payback to the government and corporation tax on the profits), my company had recorded its best year ever.

But this left me with a problem – what to do with the money. Yes, it’s a nice problem to have – but its still a problem.

As I type this, its April 2012. Inflation in the UK is sitting at around 3.8%, and the best bank account with interest is paying 3.45% (very long term, and locked away cash) – which means that each year that the cash is sitting in a bank account, the money is reducing in value by 0.35%. Or put it another way, for every £10,000 in the highest interest paying account available, it would actually reduce in value by £35 a year.

Ok, so maybe that’s not a lot, but a loss is a loss – there must be something better to be doing with the money rather than letting it rot in a bank account.

Plus, I really wanted to start generating money from passive income.

Ways of generating Passive Income I wanted to Avoid
There are many ways suggested on the web for generating passive income. They range from the boring and predictable (sell e-books, trade on e-bay) through to the more obscure (generate virtual currency like bitcoins, create server farms to enter competitions) and even to the more risky (investing in stocks, spread betting). None of these appealed to me – either they were too risky or too much hard work (I didn’t want to spend all my weekends wrapping items to be posted from e-bay sales).

I was also looking for a large return and minimum risk option (yeah, I know, the holy grail of investments). By minimum risks, I meant something that would still be worth the original investment should anything go wrong.

What I decided On – My Passive Income Plan
There were lots of options still on the table, including expanding my business, buying another business, investing in other companies (via angel investments) and a whole host more.  After listing all the options, weighing up the pros and cons, and looking at the risk verses reward – I decided that my company would invest in……. property.

Lots of companies have invested in property in the past – but on the whole this has been through investment in commercial property- buying offices or shops and then renting them out . But looking around the UK today, all I see are empty shops (or shops with £1 stores in them) or offices that are being given away for next to nothing. Invest in the difficult world of commercial property? No thank you.

But residential – that was the ticket for me. Residential properties have been dropping in purchase value over the last 5 or 6 years so at the moment is very cheap. And with the banking chaos, banks are not giving out mortgages so people are having to rent.

I checked with 5 estate agents in my home town, and indeed that was the case. People were desperate to sell their properties (so would provide a good bargain) and also in desperate need for rental property. The initial numbers looked good.

So that was my plan – I was going to buy 1 or 2 residential properties through my company (why I am doing it this way in later entries), and will rent them out.

Next, I will cover the maths of the project.

In a previous post, I talked about how I occasionally like to mix up my freelance working practices by working as an IT contractor on a customer site. The reason for doing this (if you don’t want to read the original entry) is to keep up to date with what is happening in the real world in terms of customer expectations, technologies and environments.

Now whilst selling freelance and small business services means putting on a sales hat and talking benefits and features, landing a contract is all down to the interview.

Throughout my freelancing career, I have done four contracts, and attended around twenty two contract role interviews. In all of those interviews, there has only ever been one occurrence where I was not offered the role. In most cases, I have 3 or 4 offers on the table, and it comes down to selecting the role I prefer.

I believe the reason why I was offered so many roles comes down to one important interview tip:

Give a Killer Answer to the Trick Question
I am sure that the people who have hired me have other candidates with similar or better technical skills, similar or better experience, and similar office/interpersonal skills. If they are any thing like me when I am interviewing for candidates (which I am often asked to do when freelancing for companies) the stream of people I am interviewing soon becomes a blur.

So I make sure I stand out with my Killer Answer to their Trick Question.

All interviewers at some point will ask what they think is a trick question. It may be in the form of “Whats your biggest weakness” or “Whats the number one thing you would bring to this role” or even “Why should we give the contract to you?”. I have found generally, all interviews will consist of such a question in different forms.

And my killer answer to any such question is always “Oh, Its because I am lazy!!”.

Yep – I know. It sounds mad. Why would I say such a thing? Why would I say I am lazy?

Simple – its an answer they wont expect. It’s a surprise. It will shock them awake. They will take notice. I will be remembered.

But clearly, if that was my whole answer, then its unlikely I would land any contracts. So I continue after a brief pause to let the answer soak in and have an impact!

“Oh, its because I am lazy!!!!” Pause (count to three)….”Sorry – that’s not quite right. Lazy is the wrong word. What I mean is that I avoid doing more work than is required. If a task needs something put together, I will look at what I have done in the past, or what is already in place, to reuse it as much as possible, which of course will save time and effort and build on what already works. Yes, sorry, lazy is the wrong word. Efficient – that’s a better word.”

That is a great answer as it shocks them to take notice, gets them thinking, then reassures them that they are going to get the biggest bang for their buck by hiring you.

Again, I know it sounds mad, but I make a point of using this killer answer to their tricky questions, and only once has it ever let me down.

And I have been interviewing people myself for over 20 years – I know what interviewers are expecting and what they want to hear in an answer.

Give it a try yourself.

Now and again I like to talk about systems that work for me. I am not talking about Cloud or Computer based systems, but work productivity techniques which allow me to stay productive and on the ball.

A year ago, I talked about my Bath Time technique for getting ideas and inspiration. Today is another one of those ‘out there’ ideas – about a technique I use when I am just too busy.

Working on One Project or Task
For the vast majority of my time, I am working on one major task. For Business, it may be one major customer project, or at home, it may be one major home project like a home repair or maintenance project.

In these situations – it’s easy just to get your head down and get on with it. Just cut out the distractions, come up now and again for a break (air and tea), start in the morning, finish in the evening – get the job done. Easy stuff.

But, then there are times when I am forced to juggle more than one ball. Sometimes I will have multiple projects which I’m working on, with some sales thrown into the mix, responding to urgent mails, doing customer support. Very soon, I can have five or six task balls in the air.

In this situation, spending all your time on just the one task will work for that specific project, but everything else gets no attention, so problems start to stack up. Soon, panic can set in, or problems can occur as tasks fall off the radar.

If you spend all of your time just working on customer work, when the project is over, you may find your accounts have gotten into a mess or your lack of sales activity means you have no future work.

My System for Juggling too many tasks
So the moment I see I have too many projects on the go, I resort to my paper based system. It’s a system I have used for many many years.

I take a piece of A4 paper, and fold it in half, then half again (so it becomes an A6 size of paper, or the size of a filing card). Then I create a grid with a wide column on the left. In this wide column, I write all my ‘needs attention’ projects – all the things I need to be doing.

I am currently using this system at the moment – and the picture shows my time juggling paper as it stands today. Excuse the hand writing and the chewed corners

What we have running down the side are my juggled projects:

• DWH & Paxar – Two customer projects I am working on
• TSL Market – Time I need to allocate to my own company marketing
• ToDo – Time allocated to my never ending general task to do list
• Emails – Responding and keeping up to date with emails
• Money – Doing money management – both personal and business – cash flow, reducing expenses, and other frugal activities
• MP3s – Another customer project I am working on
• Blog – Time allocated to this blog (trying to get ahead of myself with future posts, ready for my next big holiday in a few weeks)

So what I do is this; I work through the list, doing either one major task per item (such as knocking an item off of my do list, or clearing one email from my inbox) or working 40 minutes on that project. For customer projects, I generally do the 40 minutes stretch of work, and set an alarm to tell me when 35 minutes are up. When the alarm goes off, I then have 5 minutes to wrap up what I am doing – and then it’s onto the next task down the list. When I get to the bottom, I go back to the top, and start from the beginning.

I put a cross to mark when I have gotten up to in my list – if you look carefully, you will see the next box to be crossed off (going down in rows, then across in columns) is for the blog, hence my typing this now. You will also notice that some of the boxes have a small hand written note in them – this was my ‘next action’ on these particular projects – when I get back to the task set, I know what I should be doing.

When the tasks completed are big, or I have worked 40 minutes on a customer project (and the alarm has gone off), I then force myself to take a break, get another cup of tea, and have 5 minutes away from a computer screen.

This system allows me to rotate my work, and make sure everything gets attention, nothing falls of the radar, and everything moves along. When the urgency of particular items falls away (such as all my urgent emails are answered or top priority ToDo items are done) I can cross off the entire project row and I can start to relax. Once the number of projects falls below a panic level, I then switch back to my concentrated project work (one project at a time).

Combining proven techniques
This system may not be for everybody. Some people will find the constant switching between work types a distraction, but for me, the switching actually means I have time to think about what I am doing, and come back to projects with a clearer mind.

After having used this system for a few years, I came across a system that other people use called the Pomodoro technique – which is very similar in terms of having a timer to chunk up the day and taking breaks in-between time slots – although I think my system came along first

However, I have to say that where possible – running multiple projects should be avoided. Other people have reported switching between tasks and projects like this can result in either a 40% reduction in productivity, or you going mad. I have to say, I somewhat agree with both suggestions – which is why I only use this system when I have too many projects to juggle and I only use if for a day or so to get me over the too much work craziness.

Once the calm has returned, I can then get back to my concentrated method of working.

If you find yourself drowning in different work, give this system a try and chunk up your day.  Let me know if it works out for you.

Once an initial project has been completed for a customer, the project invoice raised and the hand over done, it does not necessarily mean that your relationship with a customer is over. In addition to staying in touch in the hope of future sales and new projects, one thing well worth considering is arranging a Support and Maintenance contract with the customer.

There is no right or wrong way of selling Support and Maintenance. Sometimes, I will mention it during the prospecting stage (“of course, once the project is over, happy to discuss the support of the system”) or sometimes I will mention it on project completion (“So, that’s all done. Now are you happy to support the system in the future, or will you need support going forward?”)

Charging Support and Maintenance can be the icing on the cake of a project. Once the project is complete, the customer pays you an annual support payment upfront, and in return, you agree to fix any problems that come, up, answer questions etc, without further charge for the year.

Think of support and maintenance (S&M) as an insurance policy taken out by your customer for the year ahead.

What to charge for Support

Within an IT industry (other industries will vary), the going rate of support charges can range from anything from 10% to 20% of the original delivery cost. Typically, 15% is viewed as ‘fair’ – so this is the amount I generally try to aim for – charging 15% of the original project development cost per year. Sometimes, it is easier to work out how much time I am likely to spend supporting a customer (based on the help needed during initial development and handover), add a ‘fudge’ factor for the unexpected and then multiply this up by my typical day rate to find the annual cost for a customer.

And don’t forget that support charges also need to go up in line with your annual price increases on the anniversary.

Some customers prefer a call off support arrangement, where they pre-book a number of days of support in advance and use (and pay for) them as required. This may seem like an attractive option for a support and maintenance agreement, but unless they are paying up front, all the advantage is with the customer. It is a much better option to organise a proper and full support agreement.

Be specific about support dates and times

In addition to the cost the customer will pay for support and maintenance, the other major factor which can influence the price will be the dates and times of support.

Will you provide support from Monday to Friday? What about weekends? And will support be from 9am to 5pm, 8am to 6pm or will you provide support 24 hours a day? Also bear in mind that if your customer is in a different time zone to you, their 5pm may be your 2am.

Whilst there are again no hard and fast rules for how support charges change for different days of the week or times of the day, my general rule of thumb is that any weekend day is TWICE the cost of a week day (so 7 day support is actually charged as 180% cost of a standard working 5 day support contract – ((2 days * 2) + 5 days)). Then, for the extended hours (beyond 9am to 5pm), I add 12.5% per hour (so 8am to 6pm adds 25% again).

Companies who demand 24hour support will be used to paying through the nose for this constant level of support. Again, in an IT industry, typically a 24hour 7 day support contract will cost between THREE and FOUR times the cost of a standard Monday to Friday 9am to 5pm support arrangement (although I do know some BIG IT companies who charge upto 20 times a standard support cost for 24-7 support – and their customers pay it!!!).

Bear in mind that for extended hours or 24 hour support, you need to work out how they will contact you. In needs to be using a method that will wake you (if you yourself are providing the support and they decide to call at 3am) and that you can respond to.

Finally, when working out the costs, factor in the response times. You need to provide details of a) How quickly you will email/call them back, b) provide a solution or at least a get-around and c) A full solution if it’s a major issue. These times will vary from project to project, and industry to industry. My starting position for support agreements is 1 hour for call back, 4 hours for a get around and 48 hours if it’s a major issue or requires a fix.

What to Include and Exclude

Which leads us onto the big issue of what is and is not included. This list should be stated up front, and be in all discussions, all emails and in the final support agreements – as it is pivotal. Once agreed, if you leave holes, it is possible the customer could use the support agreement for all new future work or you may end up supporting things you never initially supplied.

Again, this will will be vary from project to project, and industry to industry. However as a starting point, here is my standard inclusion and excluded list:

• Support is provided only in terms of the project (name the project)
• Support is provided only in terms of hardware and software provided for the project by your company (name your company)
• Support is provided only for errors or questions relating to the existing functionality of the project
• Support is provided for any questions or software errors within the project, including data generated or stored by the project
• Support is provided in scope of the current functionality of the project or additional functionality added to the project by (your company) on a paid for enhancement basis in the future
• Support is provided on all functionality explicit to the project, including GUI front end functionality, back end database, supplied interfaces and data held in the database
• Support is not provided for errors resulting from 3rd party software, 3rd party hardware, interfaces or data (including database software, operating systems and the like)
• Support is not provided for additional features, additional data to be held, new entry prompts, changes to interface definitions or data entry changes – these would be provided under a separate enhancement quotation
• Support is not provided for additional reports or enquiries, either from within the software, or using 3rd party tools – these would be provided under a separate enhancement quotation
• Support does not include any additional training of staff. This can be provided separately as an additional service
• We reserve the right to charge separately for corrections or time required resulting from your staff errors (such as invalid entries)
• Support if provided on the basis on standard working days, excluding bank holidays, Monday to Friday, from 9am to 5pm… (etc)

If you want to see what my standard support agreement looks like (the wording), I offer you a copy to download for free.

I have just decided to treat my wife to a quick weekend break in the spring of next year. I am taking her for a ‘city break’ to Venice, Italy. Its just a short stay – 4 days visiting this wonderful (I hope) floating city of canals, bridges and great Italian food.  The picture below is Venice from the air (I didn’t know its an island, did you?).

But, I am not here to gloat about going away next year.   No, if I am going to gloat about anything, it’s the cost of the trip. From England to Venice, 5 star hotel in the center of the city, flights and transfers is costing me just £22.

Ok – honesty time.  So it didn’t really cost me £22 – it actually cost me £590 – but… in terms of budgeting it only cost me £22, because I saved £570 though other savings.

I have talked before about cutting personal and business costs.  Well in October, I really pulled out all the stops.

For a lot of suppliers, I used the ‘I’m cancelling my account with you (now show me your best deal)’ trick with almost all my personal and business suppliers.

For instance, I struck a deal with Sky (my satellite TV provider) for a 50% discount for 12 months, which saves me £150 a year. And British Telecom (phone for home and business) gave me a 60% discount for 12 months – so that’s another £90. And so it goes on – totaling £570 of savings. Some were instant money back or savings, and some were discounts over time. So the savings were invested in a short break.

And the point is, anybody can do the same – all that is needed is advice about money.

I am not talking about specialist ‘Financial Adviser’ type of advice, its just a question of staying up to date with current advice, warnings of changes which may effect you (such as utility price rises), and taking advantage of the advice which is out there.

So if you are interested in saving/making money (both for yourself and your business), can I introduce to you, my definitive list of great money information (all the changes I made this month which saved me that money came from these sources).

There are a lot of resources out and I could list them all for you, but these are the cream of the crop:

Money Podcasts
BBC Money Box – For UK freelancers, this weekly show brings you all the latest personal finance news
BBC Money Box Live – Again for the UK, a weekly phone in show covering a different topic each week
Which Money Podcast – Another UK weekly podcast, with advice from the Which team
Radio 5 Wake up to money – Final UK podcast – a daily update on all things changing in personal and business money.
Planet Money – Three times a weekly, American based finance news
CNBC Fast Money – Daily updates on US Finance from the CNBC team

Money Blogs
MoneySavingExpert – For the UK, signing up to this weekly email feed is a must, with alerts on finance changes, utility rises, discounts and ways of saving money.  Sadly, there does not seem to be a US version of this site.
GetRichSlowly – A collection of articles about both reducing debt and growing wealth.
I will teach you to be rich – This site is run by Ramit Sethi.   It is less about saving money, and more about growing wealth.

Money Tweeters
@prairieecothrif -If you want to be inspired to live the life you have always wanted in a sustainable way, check out the connected blog.
@retirebyforty – He quit his corporate job! Now you can follow and see if he can stay out of the corporations for the next 40 years, whilst he shares money advice!
@TalkMoneyBlog – They talk about personal money issues and give free information, help and advice about the mortgage market, debt problems, credit cards and money saving tips.
@thisismoney – This is Money: news, conversation, top articles, tips, advice and opinion from the team at the UK’s best financial website.
@lovemoney_com – Lots of useful information to help you have a better relationship with your money.

If you have any other suggestions of blogs, podcasts or tweeters to follow, I would really love to hear about them.   Please, leave a comment below.