money

Freelance Switch wrote on this a while back, but this summer it’s been a goal of mine. Since my junior year of college, I’ve freelanced every long break in lieu of getting a ‘real’ (read: 9-5) job, but have stuck strictly to contract jobs and what amounted to (in most cases) one time shots. I’ve always had a bunch of side projects bouncing around in my head or ones I half-started but never capitalized on. I even created a couple of small Facebook apps that I never made an effort to make money with. This summer I launching several side projects in hopes that one succeeds and does well. I’ve also got an ace in the hole. But why put the time and effort into it?

Well, Freelance Switch also wrote about that a few days ago. The main reason for me is security. I want to know that if there are lulls in work, I am still making money. This summer I got a lot of leads that never amount to anything, and that was incredibly stressful. I am on my last leg of my college career and before expenses really start piling on, I want to invest some money in IRAs and other long term savings accounts but can’t do that if I’m not making the money. Of course, now with school starting I run the risk of any or all of those leads following up. And, to put it bluntly…

I want to be able to say no to work and still have cash flow. This year is going to be particularly busy and I won’t sacrifice school for some short-term cash. Knowing I don’t have to is a big comfort. Aside from the money though, it’s really cool to know I made something people use regularly; and it’s that satisfaction that tells me I got into the right industry.

So how would one go about doing this? Well, I have a couple of side projects I’ve launched: 101-Things and YouWouldntGetIt.Com, as well as one that will be relaunched soon. Apart from those, I am getting into hosting resale. Hosting goes hand-in-hand with web design, so it makes sense for me to offer both services to my clients. What you do is up to you, but as a freelancer it’s important that you do it.

My summer was an eye opener for this stuff, and it’s a real turning point in my career. By increasing revenue streams we are opening up a lot of doors for ourselves- we just need the will do to it. Feel free to plug your side projects (and maybe throw in a thought or two) in the comments.

To continue with this short series I started a couple weeks ago, I want to talk about the next part of my presentation, starting the business.

Why Start a Business?

This was a topic of particular interest. Many people see too much risk in actually putting yourself out there, leaving a steady job, and running your own business. I knew for me I had to start my own business when I wasn’t happy with any of the jobs I had (aside from working my first real job at the deli). My experiences were primarily negative working retail (which is usually the case), but also with jobs in my industry. So I felt if I wanted to be happy I’d have to be my own boss. But that is not the only upside to starting your own business.

The payoff is greater, and not just in terms of money. That might not be the case, especially starting out. However, you will get the opportunity to create work of your own and take the lead on projects. You will also do what you love to do, not just what you are told to do. I for one enjoy programming. At my last couple of jobs however, I was strictly XHTML/CSS. I wanted to do innovative and cool things. Running my own business, I can do that.

It’s your ideas that manifest themselves into real products, not some upper management person or company. It’s also very rewarding to see people use what you create. You won’t get that working for a company.

Have I convinced you yet? Next time I’ll be talking about some tips to running a business.

One of the things I want to do more of in 2007 is blog about my business. How I manage it, problems I encounter, and some tools I use to help me. With the redesign, I will have a page that showcases some articles of mine (much like Alex King), and series will be there. Today, since it is the beginning of the year, I want to talk about some tools that help me manage Finances.

I think I have biggest problem with money. Up until last year, JLC Web Design was a very small operation, getting a client here or there. Since the summer, I have been working on multiple projects pretty steadily. This means I need to keep track of who is paying me, when, what they owe, and what their account consists of. Since I often offer server space and purchasing the domain, I will need to bill my clients annually. To keep track of these things, I use a simple excel document, with a sheet for each year, domains I pay for and servers I pay for. I use the simple adding and subtracting formulas to automatically display how much I have paying and making, and the profit so far. I have also started using Wesabe for my finances. I simply upload an online bank statement, and it shows up on Wesabe for me to tag and edit. This means I can make more meaningful names for “Deposit” and “Domain Rebels #0997.” And I tag all my expenses and revenue as such, as well as JLC Web Design for all transactions. Wesabe automatically calculates spending for the month, total spending, and the money I have made or lost based on the tag. It creates spending and earning reports and allows you to set goals for yourself. I can also upload multiple bank accounts, so my business and personal finances are in the same place. It’s easy, it’s free and it’s web based. For me, it’s everything I need.

In the coming days I would also like to talk about project tracking, deadlines and sending the invoices, and contracts.

To follow up on a mini-series I started here, I guess the first thing I should write about is what to charge. When I was first starting out, as a HS Sophomore with not to much experience past Microsoft Frontpage, I really did not know what to charge. I also had a small problem with asking for money. My first client site I got a cool $200 for which, at the time, I thought was pretty great. I set my prices pretty low though. $10/hr for for a site, and at the time I wasn’t developing anything ground breaking.

So how did I know to charge more? Well, honestly, I owe that to a mentor of mine, someone who knows business. He told me I needed to be confident in my work, and that I needed to charge more. This really, is for a couple of reason. Most people looking for a web site now-a-days want something good. I didn’t understand why people weren’t coming to me even though i was the ‘most affordable’. The cheapest. And that is exactly why. If people are going to pay good money for a site, they want to hire someone who knows they can do a good job. That is reflected in how much you charge. At $10/hr, I lacked confidence, and clients. Two- the time I put into it is usually more than what I charge. In web development, it’s tough to gage just how long you will work on a project, and if you tell a client one price, you better stay close to it. I have been phasing in a new way of charging, where it is more of a flat rate, based on what they want. This price comes from me charging $25-35/hr and estimating how much time it will take. I can estimate now, after doing it for a few years.

I feel at about $30/hr, it is worth my time to develop a nice site. This price will raise steadily over the next year most likely, as I grow closer and closer to graduation. Soon I will need to charge enough to support myself, especially if I want to be a freelancer/business owner. But of-course, I better be able to offer the products people want if I decide im going to charge over $35/hr for a web site. Later.