How to Freelance to Your First Million, It's been done!

[Niheel]

According to India Times, there are groups of freelancers in India making over a millions dollars by providing development and IT services to their counterparts in the US.

The freelancers results were intriguing enough for us to dig a bit deeper and put together a nice fact sheet for opporutnities in freelancing.

Two freelancers featured in the piece were :

• Synapse Communications, the number two provider on eLance. The provider grossed $2M USD in revenue and it was started by 26 year old with rented PCs and Rs 6 Lakhs( roughly $15,000 USD) of startup money.
• Xicom Solutions, the number one provider on eLance grossed $600,000 USD. It charges a minimum of $20/hr for development work and was also started by a young indian who was tired of his job.

These figures are proving that freelancing is a valid and fruitful business model. It makes sense, why not leverage your talent as a technology expert to help other businesses achieve their goals and get paid well for it. Services like eLance have made it easier for providers(freel ancers) to connect with people who want work done. We did a bit of digging around at the top 50 providers on eLance and found some interesting stats.

Freelancing @ eLance factiods:

• Since 2006 eLance has sent freelancers more than $100M USD worth of business.
• Each one of the top 50 providers has earnings of $65,000 USD or more.
• The top 50 providers earnings average out to $127,443.00 USD.
• India dominates as a source of freelancers. The country has 25 of the top 50 freelancers and accounts for 52% of the revenue generate by the top 50 freelancers.
• India, Pakistan, Ukraine, Romania and United States make the top 5 countries where freelancers work from.
• The minimum rate for the top 5 providers ranges from $20-$25/hr USD.
• Repeat business and word of mouth marketing helps these providers generate even more revenue than listed on eLance.

Freelancing tips to make your first million:

• Do quality work (if you want more work and referrals sent to you)
• Charge by the hour not by the project. Unless you know that you can finish up the project under budget leaving you a margin.
• Keep a margin, but don't get too greedy. Competition is always around the corner.
• Deliver on time or ahead of time.
• Support the product, but make sure to charge for the additional support work.
• Be available to communicate. IM / Email / Phone when necessary.
• Use a project management system and billing system to keep track of things.
• Make sure your clients leave feeling happy with the results. Their success is your success.
• Expand, grow and delegate. You won't be able to handle all the projects. Built a team, hire people and pay them well.
• Use freelance sites a way to connect to prospective clients. Consider taking lower priced projects as away to get in with a client.

[dlite922]

Uh....ya, India is the fastest declined when they hear you.

I don't know where you get your statistics from, but this will just hype a lot of people up and lead them down the wrong path.

The US will loosen up on their grip on needing other countries and a sense of getting everything done in house will moreover reduce this India free lancing.

The problem is, there are WAY too many Indians that think they're freelancers and screw it up for the rest of them that actually do quality work. (I'm guessing it's articles like these that do the trick)

I don't live in India, but speaking from experience I have not seen one client that was interested in over-seas. In fact I had a few that would never do it again and chose to go local this time.

Ya, the internet is making the world a smaller place, but don't forget soon this 6.5 billion people on earth will be all online. The internet won't be so small anymore.

I can't post one Craig's-list ad that STRICTLY says "NO TELECOMMUTING" and there's at least a couple of Indians that call me or email me.

Conclusion: decrease the hype, increase reality.



Dan

[pbmods]

I agree with most of your tips at the bottom. The only one I would disagree with is taking on lower-priced projects to get "in" with the client.

Taking on lower-priced projects is a good way to set unfavorable client expectations. If you have a particular rate that you wish to charge, the best way to get clients to accept that rate is to charge that rate.

I used to work for a startup web development company that catered to lower-budget projects. There was always tremendous pressure to get projects out the door, more so than anywhere else I've ever worked. The reason for this was that our clients had the same expectations as higher-paying clients, but they weren't willing to pay as much, so if we weren't producing at 110% capacity, 60 hours a week, we were losing money.

My advice is to charge what you know you're worth. That way, you'll only attract clients that are willing to pay you what you're worth.

[balabaster]

I'd have to say I'd agree with the the previous poster - evaluate what you're worth, be realistic, stick to that. If a company isn't willing to pay you what you're worth, then politely decline. There are companies out there that are willing to pay you fairly, and you are doing yourself and industry a disservice by selling yourself short. The way forward is not by undercutting the competition, but by providing a higher quality product and a better quality experience for your client. At the end of the day, as a consultant and freelancer, your reputation and your work ethic is your meal ticket.

Lately, there seems to be an industry wide attitude that programmers are ten a penny and that you're expendable - sure, if all the company sees you as is a cheap resource, then of course you're expendable, but if you can deliver good quality products on tight deadlines, to spec and to budget, and you deliver an enjoyable customer experience, then you will notice that it doesn't matter what you quote. Once a company trusts that you are looking after their best interests ahead of your paycheque and that you provide real value to their team, your paycheque will take care of itself.

Beware of employers though, they can be cut-throat. If an employer treats you like gold, return the favour. But if an employer doesn't see your value beyond a dollar figure, in my experience, they're not worth working for, leave these projects for those that are willing to work for bottom dollar and move onto the next project. Sure 50% of the software engineering jobs are going overseas to India, China, Taiwan or wherever. I'm sure that at least some of the companies providing the work give the customer a satisfactory experience. I guarantee that many of those projects will be unsuccessful, and the customer will be unhappy with the service and/or the product provided.

There is no substitute for understanding, communication and group collaboration. If I were working for a client that didn't speak English, trying to send me work from overseas, whom I'd never met, in an industry I've never been part of and had goals and business processes that I couldn't understand without seeing them first hand, my ability to provide the exceptional customer experience that I strive for with every project would be seriously compromised.

My most important rule for freelancing - indeed, for life, is this: Enjoy what you do, never lose the fascination for it, find a way to nurture that fascination every day. When you enjoy what you do, and your employer finds value in it, it's a joy to go to work every day, you will enjoy life more, you won't find yourself watching the clock waiting for the end of the day and best of all your paycheque will take care of itself. You, like I will stop hunting for ways to make your next million and retire because when you truly enjoy something - paycheque or no paycheque, there's nothing you'd rather be doing.

Some days I think about retirement and often toy with the idea that I'd like to retire by the age of 35... but when I stop and think about it, and I mean really think about it, I try and imagine what it is I imagine myself doing... truth be known, I think I'll likely still be programming, and why? Because since the age of 3, what has always driven me? Solving puzzles. The only difference is that now I get paid for the solutions. It doesn't get any better than this. And what is more, if I retire - who will provide the puzzles?

So is keeping your eye on that first million the most important goal? I'd say that honest pursuit of a career you love is far more beneficial for your enjoyment of life, for your bank balance and for the industry as a whole.

[leonc]

Not to rip the Indian companies that do deliver a good service, but I personally have been involved in lots of projects that were inhereted from India based freelancers, and not a single one of them ever delivered good work. Alot of our work is generated by mopping up the messes that these companies tend to generate (at double the price of the 'cheap' developers). It was not three years ago that we were constantly 'blackmailed' by clients wanting to offer as low as half rate. This was because the Indians just underquoted on everything without the slightest understanding of the job. So, for my count, I will advise people to be VERY wary of any freelance guys from Asia! Plus, as our clients found out, you very seldomly have legal recourse against overseas companies!

[AaronL]

We need to stop outsourcing IT jobs completely and keep the jobs in the USA!!!! There are too many people losing jobs over this! I can't stand calling support for Cisco or Dell etc... and getting transferred to some idiot who can't even speak English. There are tons of talented people in the US losing their jobs because of corporate &#%(#% outsourcing jobs

[pbmods]

WRT to outsourcing, if you can't compete on price, compete on quality.

Outsourcing is a boon to many companies, especially in a recession economy because it's almost as good quality, but for a whole lot less.

As a freelancer, you need to show potential clients that the projects that they outsource might be cheaper up front, but it will ultimately cost them more down the road because the code they're paying for is lower quality and will require more maintenance and will be more difficult to scale.

Nobody owes you a job; you have to go out there and earn it.

[xHolyWrath]

Nobody owes you a job; you have to go out there and earn it.

The most sensible post i read here.

[danp129]

Outsourcing is a boon to many companies, especially in a recession economy because it's almost as good quality, but for a whole lot less.

If it's worth doing, it's worth doing right, so why gamble with quality you cannot control?

Outsourcing is also a drain on the economy and education.

[pbmods]

If it's worth doing, it's worth doing right, so why gamble with quality you cannot control?

I agree with you 100%, which is probably why they don't let me touch those kinds of decisions anywhere I've ever worked :P