Skip to main content or search

About Going Solo

Thursday August 4, 2005 / 26 Comments

It seems like everybody is or wants to be a freelance web developer. Of course, this makes sense because it enables such a glorious and carefree lifestyle. Rather, that’s what everybody envisions.

Unfortunately, it’s not as easy as creating a web site and cashing checks. There’s a lot more to running a business that isn’t sexy or fun. Parts of owning your own business are downright boring, tedious, and expensive.

I thought it might help if I pulled together the less glamorous aspects of “going solo” as I’ve come to call it to help others have realistic expectations. Hopefully being aware of these often overlooked matters, and some mistakes I made personally, can help you create a more successful plan before you take the plunge.

Money, Accounting, and Taxes

Your costs will be cheaper than running a large business, but office space, taxes, computers, internet access, health insurance, office equipment, and legal fees can be costly surprises to your bottom line if you don’t plan ahead.

Pricing

This is one of the most challenging aspects of running your own freelance web development business. You can’t calculate your salary alone. You have to factor in all of the above expenses as well in order to determine how much you need to charge.

Hidden Time

Accounting, collection, taxes, sales, contracts, and networking are all very necessary for successfully running a business. And, not surprisingly, they take away from your development time. You can easily spend 25% of any given day, if not every day, taking care of these aspects.

Business Development

This is an extension of hidden time that deserves its own section. This includes updating your skills, making an entry on your company blog, attending a conference, and updating your web site, or learning a new skill. They are all necessary, and require additional time.

Sales

When you’re working for a large company, it’s easy to be idealistic about sales. On your own though, chasing down leads, writing proposals, contracts, and statements of work can be extremely time consuming. Don’t take sales for granted. It’s one of the hardest parts about running a business.

Health Insurance

It’s easy to overlook the cost of insurance. What many people aren’t aware of is that for every dollar you pay towards insurance, your company could be paying another 5 to 10 times that amount for you. When you go solo, that means you can expect your insurance costs to go up dramatically. If you have a family, this can be even more of a concern. Of course, you could always gamble and go without insurance, but if you’re the type that likes the security, you could be in for a shocking dollar amount when you’re footing the whole bill.

Your Health

When you’re the only employee, there’s more to be lost when you’re out for a day. Nobody else can cover for you, and anything could go wrong. Staying healthy becomes much more important than if you’re working for the man.

Legal

As much as I hate this kind of stuff, good legal documents are necessary. They may never come into play, but having a good signed contract is part of running a professional business. Again, they aren’t cheap, and planning is what matters here.

Personal Time

This was my biggest weakness during my 2 years on my own. When running your own business, it succeeds or fails based on your efforts alone. From my point of view, that meant that any moment not spent working, was money lost. I learned the hard way just how wrong I was. Make sure to take time for yourself, this makes you much more productive in the long run.

Focus

With all of these other aspects of the business needing your attention, it’s very easy to run out of time for billable work. As such, staying focused becomes incredibly important. So balance that personal time with focus on your goals.

Organization & Time Management

In addition to focus, all of these tasks can quickly overwhelm you if you’re not organized. Figuring out a system that works for you, putting it in place, and sticking to it is of the utomost importance. I was so focused on billable work during my time, that I had a mess of bookkeeping by the end of the first year. That’s one mistake I’ll never make again.

Resources

Running a business requires effort. Lots of it. While these resources may not make it painless, they can help make things a little easier.

  • Basecamp – Probably not news to you, but an invaluable resource.
  • Blinksale – This shouldn’t be news either, but I definitely wish I had it a couple of years ago.
  • Budget Design by Sinelogic – A great PDF on how to successfully execute on low budget projects.
  • Inc.com – Great articles on running a one-person business.
  • SitePoint – An incredible amount of advice regarding the business side of web development.

Summary

This is just a little bit from my experience. It’s not meant to deter anyone from going out on their own. However, with more and more big names going out to start a business, I thought it might be beneficial for others to be aware and temper action with wisdom. Feel free to take advantage of my lessons to start your business a little more prepared than I was.

Featured Stuff - Resources: Wireframes & Page Description Diagrames

Omnigraffle and Visio versions of the wireframe templates and stencils I use on all of my projects. There’s even a few examples included for good measure. More about Wireframe & Page Description Diagram Stencils and Templates

Good call, Garrett … I haven’t gone solo yet – mostly because I see all those challenges you mentioned and know I’m not ready yet – but even doing it “part time” there is so much more to it than sitting around doing what you love.

If I ever make it big, I’ll hire a business manager and let them worry about all that stuff and let me concentrate on design. That would be nice, but not realistic.

So you’re right, its critical for people like us to keep those things in mind when considering becoming a “free agent”. chuck
great article. i’ve been “solo” for a while, pricing and business dev are the toughest. its all about networking though. organization is key, and i wish i was more organized and had my finances tracked more efficiently.

anyway, this is a definite must read for people looking to start out (if I had a blog that anyone read, i’d trackback to this post). brian breslin
Great resources.

I would also recommend getting a good chair for anyone going solo. Dale Cruse
All good points.

In my experience, you’re spot on – 20-25% of each week is taken up by business operations or sales related activity.

Regarding health care – the costs of health care varies dramatically on the plan and the provider. My personal costs are far lower than those of my previous employer – and I know what I’m buying. Garrick Van Buren
For your legal section: nolo.com has some excellent legal books and resources on how to start up your own business, write contracts, and more. I recently purchased some books from them and have been very impressed. They can give you an idea of what you can do yourself (more than you might think) and what you probably want to leave to the professionals. Joe
Thanks for the tips, this is some good stuff that is particularly relevant to me right now. I’d add one squshy little thing that I think might be appropriate, should be self-evident but might get taken for granted:

You need to truly enjoy your work, and to do really well, have a passion for it. Keith
About health insurance: If you’re working for yourself and have a high deductible health insurance…which you probably do, then you qualify for and should consider opening a Health Savings Account. You’re allowed to put $$ into the HSA account, and any kind of health/medical costs you incur can be paid for through this account and be tax-deductible. The tax deductions really add up…particularly if you have a family you’re responsible for. Andy Knight
Nice article, I’ve been at it myself for about 12 years now, I just wanted to add that the 25% of each day I actually find to be a bit low… and it changes throughout the day. I tend to get up at 4am so that I can actually work done from 4 until 9 before the phone starts ringing – that way I get something done – the majority of my day during business hours is spent dealing with customer (non-technical) queries, sales, and other business “stuff” then if I have any ‘umph’ left I can start working again after the business day ends. For the same reason I always take my personal time during the week and never on stat holidays which are the best days to “catch-up”.

I also like to second the comment – you really better LOVE what you do – what is the point otherwise! Scott Baker
Yeah, this business is tough.

So yesterday I didn’t have a whole lot on my plate for the day (darn), so I didn’t go into the office at all. Just stayed home, worked up a couple of things on the powerbook, on the couch, while watching Star Trek TNG, and when I was done went upstairs for some Battlefield 2 action.

It’s killer, really. :) sxates
Wow! Greatly done!
You’ve really glued the best together!

Can’t thank you enough!!

Golly, what a lot of exclamation marks!! Indranil
Good article, Garrett. Of course, I’m not a web developer. I’m a freelance copywriter for both online and print projects, but the principles are the same. Hey, if you love what you do and treasure your independence, I think solo is the only way to fly. In fact, I just turned down a sweet job offer because, after 4+ years on my own, I can’t imagine going back to cubicle land. My little home office in the woods near the shore—just can’t beat it!

Sure, self-employment can be a tough row to hoe, and certainly not for the faint of heart. Health insurance, tax laws, they’re all stacked against the little one-person shop. But you can do it—and survive! I’m a word nerd and I love it!

BTW, I’m writing a book about the joys of self- employment—and the pitfalls. So I’d love to hear from any of you who want to share their stories. Email me at my blog (below). Thanks!

Tom McKay
Better Business Communications blog:
www.MaineCreative.com/blog.htm Tom McKay
One of the most important aspects which you haven’t really covered is chasing clients for payments (and the time this takes – it can waste days of your time).

Regardless of how great a designer you are, your cashflow and hence your lifestyle is completely in the hands of your clients. And the larger your clients, the more “procedure” can get in the way (a 90 day wait before invoices are paid isn’t unheard of).

There’s some good tips at Pay On Time, and also the top ten excuses for late payment which your clients may try, including “All names are put in a hat. If yours is pulled out you will get paid. If not, it will stay in the hat until next week”! I’d have thought that was a joke, except having heard some client excuses I can genuinely believe it. Nice Paul
Great article. I have been solo for about 5 months now, many of the problems discribed here i faced, and some still face. I work mainly as a subcontractor for web application development. The only thing i can really add is BUDGET. You need to know every decuctable expense and every non deductable expense. I sat with my accountant for nearly 6 hours going over everything, but it is well worth it.

Nice paul makes a good point, excuses are common in the field, like “Its all on our clients approval” or “The site isnt live, yet so we cant pay you” This makes cash flow difficult. What i did before i made the plunge, was actaully save up 9 months of my current living expenses. (it wasnt easy believe me) but paid off in the end. Roger
I’ve been solo, and now I work for the world’s largest software company.

When I compare the two I think one of the biggest differences for me is what happens when you work with hundreds of highly talented designers. You start growing in ways its far more difficult to grow when you’re on your own. At the same time however, when you’re solo you’re free to grow in whatever direction you choose.

I definitely feel like its important to work as part of a formal team, preferably with a firm or serious design team before going completely solo. This is helpful for many reasons, networking being one of the biggest.

Awesome post Garrett. Jeff Yamada
Jeff – That’s an excellent point. I know that I’ve learned much more working with the team at Bright Corner than I could have ever learned on my own.

Reading books and blogs isn’t enough, the benefit of working along side other talented people is priceless. Garrett
Great post. I’ve written a post here about Legal Structures that might also be of interest to people going solo. Pelle
Fantastic Article. There are alot of things that people assume about working for yourself – they think its easy! Cheyne
Like most everyone here I truly enjoyed the how-to Garrett. My uncle recently took the plunge and he’s had a hard time of it. I personally want to take the plunge but at the same time I’m a bit hesitant. The list of items you have here is a bit overwhelming and at the same time my Uncle’s own experience makes me highly nervous about making that leap. I’m part of a small development company and every week I learn more and more about how the business is run and I’m learning new things all the time yet. I will take some time yet before I do take the plunge but for those of you already out there I am quite jealous and anxiously await to join your ranks.

I would like to state that working solo isn’t for everyone. Some people require other people’s rigid structures. I often consider the military as a good example. I know many people who are very at home in the armed forces and I’m not sure if they would do well on their own. But to those of you who wish to spread your wings and fly I’d encourage you to take Garrett’s list of items here to heart. Tony
Wow, this is one of the best resources for freelance web designers/developers I’ve seen yet. Rather than just list a bunch of links, your writeup is informative and well written.

Thanks for the tips! Patrick Haney
Great insights and resources Garrett. Tony Kelleran
Very good summary of what you need to think about before going solo. Should help people make the choice to go out on their own , or just as important , help those people who really would be happier staying as an Employee! PaulBrowne
More on pricing: http://www.dgi.ie/index.php?id=2
Excuse the design, its all being rebuild from the ground up. Alan
An excellent write-up and a bunch of excellent links.
Bookmarked for future reference :-) Erwin Heiser
Having spent the past four or so years “perfecting” my skills as a designer and developer for hobby work I’m now starting to explore commericial development and the reality of making money off something like this: and you definitely tell it like it is.

I’ve not kidded myself into thinking I could go solo at the moment, but it’s something I might think about for the future. Your article was both informative and inspiring, and will certainly prove useful when I point out to my 14 year old fans that there’s more to web developing than owning a website and asking for cash via Paypal. Jem

russian translation, if u’re not against:
http://korova.b-mg.com/2006/02/14/nachalo-solnoy-kareryi/

demetrius

EXCELLENT article. I took the plunge a couple of months ago and as a young company (literally… I’m 23) I’ve found the task overwhelming but very educational and worth it. I was lucky enough to be given a freelance opportunity and pay about 5 months worth of bills befor I jumped… otherwise I’d have been in trouble.

Aquiring clients has been the tough one for me what with many other older and more experienced companies in the game. That’s why I recommend ravaging the freelance sites with your information. Here are a few that have proved worth the browse time:

Rent a Coder, Guru, List Bid, Get a Freelancer

Good luck everyone!

Ryan

Comments are closed for this entry.