It is, after all, hard to know whether or not you’ll like something that you’ve never done.

If you choose a career path based on the wrong reasons, you might end up unhappy in your job which can negatively affect your quality of life. You also might not be making as much money as you wanted and end up credentialed for a job which you're simply not good at.

Fortunately, there are some methods you can use to help you decide what a good career path is for you. Picking the right path can help you to look like this:

While those who get stuck in the wrong career wind up looking like this:

In this article, I’m going to talk about whether a career path as a developer might be the right one for you. (Hint: if you want to do it, you can. And here I'll share how.)

I’m writing this article with substantial input from Marc Gray, who is the founder of Odyssey College Prep.

Among other things, Marc has extensive experience in administering aptitude tests and assisting young people with choosing career paths. He provided a lot of great insight for this article which goes beyond your typical “pick a career” type writings.

The goal of this article is to give you a framework which can help you decide whether or not they want to become a software developer. My goal is also to help you pick an area of focus if you decide that development is for you.

Finally, I'll provide some general advice on how to avoid some of the big mistakes people tend to make in developer job interviews. If you’re like I am, and prefer written information to video format, then read on. Or, if you prefer watching your tutorials, Marc and I address these topics in this video:

I’m going to be diving into quite a few topics. To jump to a particular section, simply click “jump to section” in the table of contents below. So…shall we?

Table Of Contents

1. Is programming a good fit for you? (jump to section)

   1. Why it is important to enjoy your job. (jump to section)

   2. Will you like being a programmer? (jump to section)

   3. Do you have the ability to become a developer? (jump to section)

2. Current programmer job openings & salaries (jump to section)

3. How to find a job as a software developer. (jump to section)

   1. How to stand out in an interview. (jump to section)

   2. Common interviewing mistakes to avoid (jump to section)

Is programming a good fit for you?

(back to top)

The preliminary question in deciding whether you should become a programmer is whether or not you will be happy doing it.

While this may sound like a “duh” statement, I’ve come to appreciate how many people dive into a career path without ever considering whether it fits them as a human.

Choosing a career that is not a good fit for your personality is a good way to increase the odds that you go on to be miserable.

The following part of this article will address the importance of actually liking your job in general, how to tell if you might enjoy being a developer, and whether or not development is something you can actually be good at.

Let’s look at each of these in turn.

Individuals choosing a career path must understand the importance of liking their job

(back to top)

When deciding whether you want to become a developer, the first step is to determine whether it is a field that you will like and which will interest you.

Being genuinely interested in the field should take precedence over considerations of money or prestige. This is because, while it’s easy to say “of course people should like their job” and it seems obvious, the fact of the matter is that most people work in careers they don’t enjoy.

Hating your job stems from:

• not putting a lot of time or research into making career choices, and

• jumping into a career simply because an opportunity popped up and not due to thinking about whether the new field was actually a good fit.

This results in quite a few problems. These include a lack of success at work, higher levels of unhappiness when you're not at work, personal relationship problems, and more.

Let’s quickly look at why being at least interested in your job does matter and the impact of doing something you don’t enjoy.

Many will say that they “don’t let their job define them” or some similar rhetorical statement in an effort to claim that disliking their job isn't a “big deal.”

Whenever someone tries to tell me that being excited about their career choice isn’t important, I tend not to believe them.

Why do I say this? Well…here are a few reasons, off the top of my head. First, if your work isn’t “important to you” then why do you spend as much, if not more, time at work than you do with your family, sleeping, or engaging with your hobbies?

Given the amount of time you spend at work, it’s clearly a big priority in your life. If you think that what you do for a living doesn’t matter to your personal happiness, then you’re likely not being honest with yourself.

It’s also important to remember that you’re very unlikely to be successful in a career you choose if you’re not happy in the field.

According to Business Insider, people who are happy in their job are absent less often and they tend to earn higher salaries. The reasons behind this aren’t rocket science. If you're happy with what you do, and you're interested in the work, then you are willing to put more effort into it. This increased effort equates to greater success.

By contrast, if you see your daily tasks as drudgery, then you're going to do the bare minimum and do everything you can to get out of doing any extra work. Because of this, being unhappy with your career choice will, therefore, lead to you failing at work.

Liking your field also likely leads to a happier home life. The realistic chances that someone can be miserable in their workplace all day, and come home in a happy mood are essentially zero. This leads to problems with your significant other, children, and so on.

Hating your job can also lead to higher rates of alcoholism, substance abuse, and poor mental health. Add to this the fact that you’ll be more likely to struggle financially, and the importance of liking what you do should become clear.

Fortunately, as Marc stated while assisting with this article, “interests are like fuel.” If you can find a field which you find interesting and engaging, then you flip the whole paradigm. You become more likely to put in the extra effort, to excel, to make more money, and this has a positive spillover effect in your life.

This is not to say that you can pick a career that is nothing but fun with no stress. Such jobs don’t exist. There are plenty of things about my career as a front-end developer which I find annoying. The aspects which interest me and keep me engaged, however, far outweigh the downsides.

When deciding whether you should be a programmer or enter some other field related to software development, it is important to understand that the first step in your decision making is to decide whether you will even like the field.

How to decide if you will enjoy being a programmer or software developer

(back to top)

Are there areas in an industry field that your personality and interests align with? Answering that question is the key to determining whether you will enjoy being a programmer or software developer.

This is an important part of the career choice process which many people miss. Too often people choose a career path because of perceived high salaries, perceived social status, or simply because they think the job “looks cool.” They don’t stop to think about whether the job actually entails activities which they will genuinely enjoy.

Fortunately, there are ways to figure out whether being a developer, in general, is a good fit for you, and to determine which particular niche in the dev world might align with your interests. Let’s dive into this.

The first step in deciding whether development is for you is to take stock of your interests. In other words, list activities you find enjoyable.

By making a list of the activities you enjoy, you develop a starting point for choosing the right career.

You’ll then want to identify the professional equivalents of those interests.

For example, I greatly enjoy analytical problem solving and the process of putting things together. I also enjoy analyzing situations in finance, in which one input may impact a given output. It’s also easy for me to spend hours playing puzzle based games. This is why my niche of providing front-end development services to small businesses is greatly appealing to me.

Whatever it is that you find enjoyable, there is a good chance that it translates into some sort of professional equivalent. So, when picking a career, the first thing to do is to identify the types of activities which you enjoy.

The second step in deciding whether to become a programmer is to determine what these aforementioned “professional equivalents” of activities you enjoy actually are.

This allows you to enter freeCodeCamp, or some other curriculum, with an idea of where you are headed and what type of job you will eventually want to apply for.

When deciding which fields may fit your personality and interests, here are some things to consider:

If you are considering "front end" development:

Think of a “front end developer” as someone who works with the public facing part of a website or an application. They build/maintain the components which individuals interact with.

You may do well in this type of environment if you have a high “visual memory.” This means that you tend to have a strong memory for what things look like. You also tend to care quite a bit about visual appearances.

You might be well-suited for this work if you're able to consider how components interrelate to each other. For example, you would have an ability to consider how the placement of a button on a website impacts the likelihood of the button actually being clicked on by the end user.

While by no means an exhaustive list, these are just a few examples of traits typical in those best suited for front end work.

If you are considering “back end” work:

A “back end developer” is someone who develops the application which runs on the front end. So, for example, if you have built a website which helps someone find homes which are available for rent, the back end developer builds out the necessary databases, search functions, and so on.

You'll likely be best suited for this type of work if you have a desire to deal with concrete facts. To put it another way, if you often like to take inputs and create something useful out of it, back end work might be a great fit.

Another common trait among back end devs is that they tend to be able to remember numerical sequences and aren’t intimidated by large bodies of text.

There are many other tracks in software development other than the first two I just listed. Other options can include:

• Full-stack developer

• Information Systems Management

• Data analyst/data science

• Quality assurance

To get a better understanding of a field which may interest you, I suggest taking a look at the freeCodeCamp curriculum and researching the type of traits typical to someone working in a given field.

The big takeaway from this section of the article should be that you can look at your personal traits and find fields in software development which align with those traits.

Do you have the skills or abilities to become a programmer?

(back to top)

There is one big question which many people may have even after they’ve determined that a) they want a career which they will actually enjoy and b) they’ve decided that being a developer aligns with their personal interests.

Here it is:

Do you have the capacity to become a developer?

Many people don’t take the opportunity to get into development because they believe that they lack the skills or aptitude to be good at it.

The good news is that you can get into development with some hard work. To understand why this is, let’s look at the difference between aptitudes and skills. Once we understand this difference, we’ll find that anyone can do something in the software arena.

Think of “Aptitude” as someone’s “natural ability” to do something. “Skill,” by contrast, is the ability to do something which comes after practice and repetition.

While aptitudes can certainly give someone a head start at something, the person with a high aptitude will likely never be truly great at something if they don’t put in the practice.

What this means, at the end of the day, is that someone with a high aptitude for engineering or solving technical problems can possibly still be a decent developer without working overly hard at it.

But someone who works hard at developing the skill, however, will likely succeed even if they begin with a lower aptitude.

Now if you’re someone who has a high aptitude, and is willing to put in the work and develop the skill, then the sky's the limit.

The truth of the matter is that natural aptitude will get you to a certain point, but that point stalls out real fast. No matter how naturally inclined you are at learning languages, for example, if you've never spoken or heard French then you're not going to understand a word of it.

The ability to expand a learned skill, however, has a much higher ceiling. This means that if you want to become a programmer then you likely have the capacity to do so.

Here are a few tips I would offer if you're hoping to develop your programming skills:

Code every day

When you’re learning to code, then you are also learning to think of things in a different way. Not only are you learning programming languages, you’re learning how frameworks interact with each other and you’re thinking about problems in a way which is probably novel to you.

You might be surprised at how fast you pick things up if you work on it every day and allow your mindset to shift.

You’ll be equally shocked at how much harder things seem if you take an extra day off here and there. For the first several months of your journey in learning to code, try to work on it every day.

Pick a curriculum where you build projects

There are some online code education platforms which do not require you to actually build something or have you build something that is simple in nature.

Such platforms, for example, may show you how to create a hyperlink in HTML or change a font with CSS, but they don’t require you to actually build a website containing the hyperlink or the font.

By choosing a curriculum that requires you to put the skills you're working on to use, before declaring you done with the program, you will greatly improve your ability.

Don’t get stuck in constant tutorials

Many, many, many (many) people feel that they are “not ready” to look for a job and they just keep going through tutorials over and over again.

The cold and hard truth is that constantly completing tutorials is a drop in the bucket compared to the skill you will develop with a real-world employer.

Also, your employer will be well aware that you are a newbie. As soon as you feel you meet the requirements to apply for a job, then you are ready to get out there.

The key takeaway here is that you don’t have to be a “natural engineer” or a math prodigy to become a software developer/programmer. In fact, many who work in the field aren’t.

If you are willing to learn and put in the time then you have a good chance of success.

This, going back to the earlier part of this article, is why it is so important to pick a track that interests you: you are unlikely to want to put in the time for something that doesn’t truly interest you.

So, by picking a field that peaks your interest you put yourself in a position where you will be willing to build the necessary skills, even if you don’t have the most natural ability.

The bottom line is that you can become a programmer with time and hard work.

Career options for software developers

(back to top)

We’ve just discussed a few threshold questions to consider if you're thinking about becoming a programmer. These include the importance of liking your career choice and understanding that no job is worth it unless you'll be interested in the field.

We also talked about how to decide which fields of development you may find interesting and how you can develop the necessary skills to succeed in software development.

In this section of my article, I’m going to dive into the economics of a few possible software development tracks. This is important to the question of “should I become a programmer” for a simple reason – those entering a field need to support themselves.

In preparation for this article, I did some research on Indeed.com as to current openings, salaries, and so on. Here’s what was available in the United States as of April 7th, 2022:

Front End Development

• Total job openings: 41,000+

• Entry level openings: 5,700+

• Starting salaries over $60k: 2,900+

Back End Development

• Total job openings: 20,000+

• Entry level openings: 1,800+

• Starting salaries over $85k: 8,600

Other Possibilities (Average Salaries)

Source: Indeed (as of April 26, 2022)

• Full-stack developer: $109,000

• Information Systems Management: $84,810

• Data analyst/data science: $98,230

• Quality assurance: $88,550

If you feel like you may be interested in front-end development, based on the discussion above, then you should learn HTML, CSS, Javascript. I would also suggest becoming familiar with the various front-end libraries (like React, Angular, and Vue).

For those who are more interested in application/back-end development, then it is important to understand that, in today’s world, you will still be writing a fair amount of code – but you will also be spending an extreme amount of time working with various microservices to build a product out of existing tools.

There are also large numbers of openings for those with skills relating to data visualization, security, as well as the jobs listed under “other possibilities” above.

One key point I would stress here is that such jobs are often willing to hire someone even if they don’t strictly meet the experience requirements. If you put in a résumé, after all, the worst someone can do is say no.

How to find a job as a software developer

(back to top)

An important thing for anyone attempting to get a job as a programmer is to do well on the interview. As someone who has employed people in multiple businesses, I have to say that the mistakes people make on interviews truly baffle me. In this section of the article I’m going to look at how to properly interview for a coding job and mistakes which people should avoid.

How to do well at a coding interview

(back to top)

I understand that in this “how to do well” section, the points I’m going to make may sound like “duh” statements.

The truth of the matter, however, is that probably ninety percent of the percent of the people I’ve interviewed over the years don’t get all of these things down. So, with that said:

Show Up Prepared

Showing up prepared doesn’t just mean appearing for the interview. It’s important to actually do some research on the company as well as the individual who will be interviewing you.

This means that, before your interview, you should spend time doing research on the company. Find out what services they offer, who their target customer is, how long they’ve been in business, and so on.

Looking up the individual who is interviewing you will give you the opportunity to learn more about them. This includes their work history, role at the company, and more.

During interviews I tend to ask questions which let me know whether the interviewee had done their homework. If it shows that they haven’t, then I have to ask myself: “if they can’t even research a company for an interview, then how can I assume that they will be proactive in the researching of potential solutions?” A little preparation goes a long way.

Show how you will add value to the company

Researching the company, as explained above, puts you in a position to show how you will add value to the business. When you are asked questions about yourself then you can relate the answers in a way which shows how you will add such value.

For example, in my company we build websites and automation solutions for owner-run to medium-sized companies. If someone has done their research on our company, and I ask them why they applied, they can respond by explaining how excited they are about the idea of working with small business owners directly. They can also make their answer about how their interests align with the types of automation products we work on. This tells me, as an employer, that they are thinking about how they will add value to the business.

In other words, your answers to questions should relate back about how you will add value when serving the customers of the business.

Don’t be shy about needing to look things up when coding

In any coding interview, you’re going to need to answer some basic coding questions. I usually have an interviewee perform 5-6 simple tasks. I make sure, however, that at least some of them are things which the interviewee is unlikely to know off the top of their head.

What I’m looking for in the interview is for someone to not get frazzled and who will ask for one moment while they look up the solution (I only use questions which I know can be found through a quick Google search). It’s OK in an interview to ask to look things up.

Mistakes to avoid in coding interviews

(back to top)

Now it’s time to look at some common mistakes which people make during job interviews. And, yes, I have had individuals make these mistakes when interviewing with me.

Showing up at the last minute or, worse, late

If you want to send a clear message to the potential employer that a) you don’t care about the job or b) that you have no time management skills, show up at the last minute or even late.

I recently had someone who actually showed up late for a virtual interview (I didn’t think that was possible). If someone is about to start your interview, and it’s clear to them that you weren’t early, then you just decreased your chances significantly.

If you are interviewing in person, then show up early and wait. If you are interviewing virtually, then log on to the chat early and wait for the interviewer to enter.

Making the interview all about you or generic

Don’t make the mistake of assuming the interviewer wants to hear about you generically as a person.

First, when an interviewer asks you to tell them about yourself, then don’t start reciting your résumé (they can read your résumé) and don’t start simply talking about your personal interests. They don’t care.

Instead, you should be talking about how your interests align with those of the company (see above). This shows the interviewer that you are prepared to provide value to the company.

Also, when asked to tell a little bit about yourself, avoid generic answers about what a hard worker you are. Instead, again, answer the question in the context of how you will provide value.

Behave professionally (please!)

This might be the one that is the most annoying to an employer. You need to act like you are taking the opportunity seriously.

Here are two examples of people I’ve interviewed where the problems are obvious. The first individual who managed to immediately disqualify himself strolled in with his sunglasses on the top of his head and a frappuccino from Starbucks in his hand.

The second was a virtual interview. When I started the interview by saying “hi [name of person]”, he responded by saying “Hey brother!” Do I really need to say why neither of these individuals were considered?

Show up for the interview dressed appropriately. This is true whether the interview is in person or virtual. Also, if it is a virtual interview, make sure you’re in a quiet place with an appropriate background. Refer to the interviewee as Mr. [Name], or Mrs. [Name], until they tell you to call them by their first name (note: if you annoy them enough they might not say this).

When you introduce yourself, make sure you thank them for taking the time to interview you and thank them again upon completion.

Don’t make inappropriate jokes or comments during the interview either. While I think these things are “common sense,” I’ve come to the conclusion that such “sense” is not actually “common.”

Conclusion

If you are wondering whether you should become a programmer, then the first step is determining whether it is a profession you would be interested in and would otherwise enjoy.

Next it is important to determine which type of developer you would like to be. Because you must support yourself, it is also important to understand career possibilities within the field.

Finally, handling an interview correctly will put you ahead of more people than you may think.

Hopefully you found this article helpful when you're making your career decision. Happy coding!

About Me

I am a front-end developer and the founder of Modern Website Design. I enjoy writing on business/employment related issues and believe strongly that the world’s problems are solved through entrepreneurship. To keep up with my babbling, follow me on Twitter.

Neither the author of this article, nor freeCodeCamp, are professionals in these areas. The discussion below is a matter of personal opinion only and you should discuss such matters with a licensed professional.

If you’re thinking about starting up your own development business, then you likely have a lot of questions and concerns. You’re most likely worried about where you will get clients, how you will market yourself, how you will get through the downtimes, and so on.

Unfortunately, many who are new to the freelance world (as well as many who just never bother to pay attention to such things) don’t consider the importance of properly managing their taxes.

This is a big, big, big (big) mistake for quite a few reasons. The impact of not considering your taxes is simple - you’ll wind up working far harder than you need to in order to have any money at the end of the day. In other words, you may end up looking like this:

Developers who focus on keeping more of what they make, by contrast, can look like this:

If you’re reading this article then I’m assuming that you’re not opposed to prosperity and that you would rather look like the latter than the former. If you are opposed to prosperity then…...well…..ok.

I’ve previously written for freeCodeCamp on how freelance developers can manage their taxes. That article was more cursory in nature and didn’t dive into some specifics.

Also, there have been changes to the U.S. tax code since I published it. Given this, I felt it was time to take an in-depth and up-to-date dive into the topic.

One important thing to understand is that this article is related to taxes in the United States only. If you prefer to take in information through video, then I’ve prepared this rant discussion:

If you’re like I am, and you prefer to absorb via reading, then read on.

I’m going to dive into several topics in this article. Below is a roadmap of this discussion. To jump to a particular section, simply click its link.

Table of Contents

1. Why one should be mindful of their taxes (jump to section)

   1. One of your biggest expenses, if not the biggest, is your taxes (jump to section)

   2. Today’s “income inequality” discussion misses the point that opportunity is given to freelancers & small business owners (jump to section)

   3. By being mindful of your taxes, you can greatly improve your financial standing (jump to section)

2. Concepts to understand in order to get your taxes under control (jump to section)

   1. Understanding the differences between revenue and income (jump to section)

   2. How employees and business owners are taxed differently (jump to section)

   3. Understanding the different types of taxes one must pay & graduated brackets (jump to section)

   4. Taxes paid v. taxes paid in during the year (jump to section)

3. How your business structure impacts your tax bill (jump to section)

   1. Understanding the Qualified Business Deduction (jump to section)

   2. Working as an independent contractor (jump to section)

   3. Sole proprietorships (jump to section)

   4. LLC taxation (jump to section)

   5. S Corporation taxation (jump to section)

   6. Picking the right entity for your situation (jump to section)

4. The importance of taking, and maximizing, deductions (jump to section)

   1. Missing an expense amounts to donating money to the government (jump to section)

   2. Expenses that can be deducted (jump to section)

   3. Maximizing retirement plans to save on taxes (jump to section)

5. Making payments during the year as a business owner/freelance developer (jump to section)

6. Where you choose to live impacts your tax bill (jump to section)

7. Closing thoughts (jump to section)

So, let’s get to it!

Why freelance developers and other business owners must be mindful of their taxes

Back to top

If you’re thinking of going the freelance route, or have already done so, then I’m assuming that at least part of your motivation was making more money and/or having work flexibility.

Well, if you want either of those things then it is vital that you pay attention to your taxes.

The reasons for this are three-fold. First, as many don’t realize, your taxes are one of your largest expenses and it’s hard to get ahead when your large expenses aren’t under control.

Second, you’re missing a massive financial opportunity that is being presented to you if you ignore this area.

Finally, the numbers don’t lie as to how being mindful of your taxes can improve your financial standing. Let’s look at each of these in turn.

Most people, including business owners, fail to realize that taxes are one of their biggest expenses

Back to top

One of the biggest things that people experience stress over is money. This is especially true for freelance workers and small business owners, as they do not have the consistency of a paycheck from an employer.

It goes without saying that one of the most important aspects of good financial health is keeping your expenses low. The big problem comes when you're looking at expenses you can reduce. Your analysis typically does not involve thinking about taxes.

For virtually everyone out there, trying to get ahead by reducing various expenses without thinking of tax reduction is akin to trying to lose weight by ordering a diet soda along with your triple value meal, with extra chicken nuggets, from McDonald’s. It doesn’t work very well.

Let’s look at what I mean.

Suppose, for example, that you live in San Francisco (you’ll see why I’m using S.F. as an example shortly) and you make $110,000 a year working for yourself. Also, assume that this is your only source of income.

Now assume that you haven’t paid any attention to tax reduction (meaning you’re like the majority of freelancers out there).

By the end of the year, you’ll have paid $32,838 in taxes (source: Free Income Tax Calculator), meaning that you only actually kept $77,162 of the money that you worked hard for. The breakdown of this is as follows:

A freelancer in this situation will have paid roughly $2,736 per month in taxes. Now think of how many people you know that get a roommate to save on rent, who look for ways to save a few bucks on things such as their Netflix account or groceries, but make no effort to get their tax bill down. This is why I made the McDonald’s comparison above.

Why did I pick San Francisco and a $110,000 income for my example? Simple...it’s a real-life scenario. A friend came to visit my wife and me a few months ago and she lives in San Francisco. Several comments were made about struggling to “get ahead.”

When I asked her what her two largest expenses were, the first she mentioned was rent. The second was an expense which amounted to $8,000 per year. In other words, she was looking for ways to save money but not even considering one of the biggest, and easiest, savings she could've made.

If you want to truly get ahead, then you need to understand what your largest expenses are. And for most it is their tax bill.

Many who mention “income inequality” miss the point that the tax code provides enormous opportunities for everyday developers or other business owners

Back to top

I’m sure the heading to this section is going to lead to a few negative reactions to this article. Consider a few things, however, before dismissing my statement.

First, it is important to recognize a common complaint that today’s tax code “favors the rich.” This is, in fact, not accurate. The tax code does not favor individuals or those with wealth. What it favors is certain activities.

An average person can engage in these activities in the exact same way that someone who is wealthy does. The specifics which I will be getting into later in this article will show why this is the case.

The big thing to remember right now is that the tax code is set up to favor those who start/run businesses and who invest. This means that if you have not structured your “freelance gig” as a business and are not investing, then you are throwing money away.

Someone making $110,000 per year in San Francisco, like the example person above, will pay $32,838 per year in taxes if they do not take advantage of any of the provisions in the tax code which are readily accessible to them.

If, however, they take advantage of opportunities available in the tax code, they can lower their annual tax bill to a little over $15,000. In other words, running your business and making choices in a way that is mindful of tax reduction, can save you $17,838 per year.

The common belief that being mindful about taxes is something that “rich people do” is not accurate. People do not pay attention to their taxes because they are rich – they are rich, in part, because they pay attention to their taxes.

If you are starting a business as a way of growing your income, then it is crucial that you consider this fact.

Being mindful about taxes can greatly improve a freelance developer’s financial standing

Back to top

The above discussion is meant to drive home one important point – the fact that being mindful about your taxes, as a freelance developer, is one of the fastest ways to improve your financial standing.

Keeping more of what you earn means more money in your pocket without having to increase your overall income. Conversely, not focusing on your taxes means that you are paying extra money, each time you get paid, to government entities.

This means that you don't have as much money as you could, and you often think you need more customers to have more cash. You then get those customers and pay excess taxes out of each of those customer payments as well.

In other words, you’re trying to get ahead by pushing a boulder up a very steep hill, like this guy:

Good luck with that. Now let’s move on to steps you can take to get your taxes under control. The first part of that process is understanding some different concepts under the U.S. tax code.

Concepts which freelance developers must understand in order to properly manage their taxes

Back to top

There are several concepts you need to understand before you can get your tax bill under control. I got into some of these in my previous tax article (linked to in the intro section to this guide).

The things we need to look at are:

• the difference between revenue and income

• how employees and business owners are taxed differently

• the different levels of taxation that exist in the United States

• the concept of graduated tax brackets, and

• the difference between withholding of tax payments and taxes actually paid.

Understanding each of these is important to determining how your choices impact your overall tax bill and help you strategize going forward.

It is important to understand a few core concepts before diving into managing your taxes. I’ll keep it to tax concepts for now, and not get into one of my much, much, much (much) larger rants on the need to learn as much about business as possible.

We’re going over these tax concepts first because, for understandable reasons, most people see their taxes as something that has traditionally been taken out of their paychecks and they’ve never really worried about it. Also, many self-employed people have never taken the time to truly consider their tax structure.

So, let’s look at the differences between revenue and income, how business owners and employees are taxed differently, the different types of taxes you have to pay in the U.S., and the difference between what you pay in each year vs. what you actually pay.

Freelance developers, as well as other business owners, pay taxes on their income, not their revenue

Back to top

Calculating your income is simple when you're working as an employee. You receive a salary or an hourly wage and the total amount of that compensation is reported on your W2 at the end of the year.

This is different when you are self-employed. The amount of money that comes into your business’ account during the year is not what you actually earn. This is because your business has expenses which you had to incur to earn that money. What’s left over after your expenses, which is your profit, is what you will consider your income for tax purposes.

Suppose Jane Developer gets paid $5,000 to build a website or application for a local business. She gets sixty percent ($3,000) up front and the rest ($2,000) thirty days later when she completes the project. Jane’s revenue is $5,000 over this period.

Now suppose that she spent $200 on advertising for her development business, $50 on liability insurance, and $50 on business related software subscriptions. Jane’s _profit_or net income is $4,700, broken down as follows:

I’m taking the time to explain this because I have talked to way, way, way too many self-employed people that answer the question of what they made by reciting their revenue number.

These same people then put that number on their taxes as their income. So under the example above, many would report their income as $5,000 and not $4,700. If they are paying taxes of fifteen percent, then these people would be paying $750 in taxes ($5k x 15%) as opposed to the $705 they should have paid ($4.7k x 15%).

Understanding the difference between revenue and income is crucial to not over-reporting your earnings to the IRS and paying taxes on money you didn’t actually make.

How a developer is taxed will depend on whether they are an employee, a “true” freelancer, or a business owner (you want to be a business owner)

Back to top

The U.S. tax structure is extremely complicated. This is why an entire industry exists in this country just to help people deal with it. It has also been called “the only law which requires people to pay professionals to ensure that they do not break it.”

How this tax structure will apply to you, as a developer, depends on several things. First, is the difference between how employees and “independent contractors'' are taxed and, second, how businesses are taxed. As for how businesses are taxed, that is further divided into understanding how different types of businesses fall under the system.

I’ll get into specifics, with examples, later in this article. For now, here is a quick overview of how you can expect to be taxed based on your status as an employee, a contractor, a business owner, and so on.

On a side note (and this will show you the types of topics I geek out on), if you’re interested in how the U.S. tax system, and the boondoggle* of an industry that supports it, came to be, then I suggested reading chapter 3 of “Business Adventures” by John Brooks (Link goes to Amazon).

\boondoggle - work or activity that is wasteful or pointless but gives the appearance of having value.*

If you are a developer working in a job, then you will receive a salary from your employer. You will pay federal, state, and local taxes on one hundred percent of this salary (a breakdown of each of these tax types is given later in this article).

The federal tax component of your obligation will include your income tax as well as your FICA (Federal Insurance Contribution Act) payments. These FICA payments constitute your contribution to Social Security and Medicare.

Since all of your income is reported on your paycheck, and your employer handles the bookkeeping, reporting your income to the government at the end of the year is straightforward.

Some “freelancers” choose to work as independent contractors. These are people who do not start a formal business and instead receive a 1099 at the end of the year from the people for whom they do work.

These individuals will fill out a “Schedule C” form when completing their taxes. Their income is determined by adding up all money (revenue) received from customers and subtracting out their expenses.

Most independent contractors will pay federal income taxes on the first eighty percent of their profits (more on this below) and they will also pay self-employment taxes (the equivalent of FICA) on their net income. Whether you pay state and local taxes on your profit will depend, in part, where you live.

If you don’t wish to form a formal legal entity to conduct business (more on this in a moment), but you wish to have a legally recognized business name, then you may get a business license and start a sole proprietorship (the licensing/paperwork for this type of structure will vary from locale to locale). This will allow you to operate under a business name, have a business level bank account, and so on.

You will fill out a Schedule C at the end of the year, similar to an independent contractor, and you will have a similar tax structure. From a tax/finance standpoint, being a sole proprietor and an independent contractor are similar.

Another option is to form a formal legal entity through which you will do business. This comes with many benefits (such as liability protection) which are beyond the scope of this article.

Practically speaking, most will form a Limited Liability Company (LLC) and some may choose to elect to have the LLC taxed as an “S Corporation.” This latter option means that you own an LLC but, for tax purposes only, it is considered an S Corporation by the IRS.

If you are operating an LLC, without the S election, then the profits of the business “flow through” to you. In other words, if the business has $100,000 in profits then you will report those profits on your personal tax return as the LLC itself does not pay taxes.

Most developers going this route will pay federal income tax on eighty percent of those profits (again, more on this below) and self-employment tax on all of the profits.

If you are taking the S election, then you must pay yourself a “reasonable salary” as an employee of the company. This salary will be taxed as would the paycheck of any W2 employee. The profits remaining for the S corporation will flow through to your personal tax return.

Most developers would pay federal income tax on eighty percent of these profits and would not be required to pay self-employment tax on them. Whether the owner of an LLC or an S Corp pays state and local taxes will depend on where they live.

If you are working for yourself, then it is important that you speak with tax and/or legal professionals to determine which of these business structures best fits your goals. Each structure comes with its own benefits as well as its own additional expenses and complications.

Developers should understand the different types and brackets of taxes which may apply to them and/or their business

Back to top

We just discussed the different types of business structures you may be using in your freelance gig. The next “core concept” to go over is the different levels of tax structure which exist in the United States.

Once we’ve done this, then, a little later in this article, we’ll put the two together and show how different business structures are impacted by these tax tiers.

There are different levels of taxation of which freelance developers should be aware

If you are operating as a self-employed individual then there are three core levels of taxes which you need to be aware of (there are actually others but they are beyond the scope of this discussion).

These taxes are those paid to the federal government, those paid to the state, and those paid to your locality. Let’s look at each of these in turn.

Taxes paid to the federal government are those which most people think of when they refer to “paying taxes.” These taxes, however, consist of two components.

The first is federal income tax. This is a tax, collected by the government, which is based on your income. The higher your income, then the higher the tax.

The second component of federal taxes consist of FICA and Medicare contributions. As mentioned above, this is your contribution to programs such as Social Security and Medicare.

For the 2021 tax year (these calculations change year to year), FICA and Medicare contributions, after oversimplifying it a bit, consist of 6.2 percent of your first $142,800 of income and 1.45 percent of total income. The 6.2 percent contribution goes towards Social Security and the latter goes towards Medicare.

So, in simple terms, someone making $100,000 per year, without proper planning, will pay $7,650 in FICA and Medicare taxes in addition to their federal income tax.

In addition to federal taxes, you may also have to pay taxes to state and local governments. This will vary by locale.

If you're living in City “X”, in the state of “Y”, may have to file a state tax return with Y through state tax authorities while also filing a city return through X’s tax authorities.

Some states, however, do not have state income tax of any type. Others only apply state income tax to certain business activities while others have a state tax which applies to everyone.

The same is true for localities. If you live in an area with several levels of taxation, then you will need to file tax returns for each level of government.

Self-employed developers should have an understanding of tax brackets

Quite a few people hear about “tax brackets” in the U.S. tax code and don’t have a true understanding of how they work.

For example, if someone is told that they’re “going to be in the 32% bracket for this year” then there’s a good chance they’ll take that to mean that their federal income tax will be equal to 32 percent of their income. This is not the case. This is because federal income tax brackets are “graduated.” Let’s look at what this means.

For the 2021 tax year, there are seven different tax brackets for a single filer in the United States. A tax payer’s income will be subject to taxation in each of these brackets.

For example, the first $9,950 you earn, after deductions (deductions are covered later in this article) is subject to a ten percent federal income tax.

Any income between $9,950 and $40,525 is subject to twelve percent federal income tax. This means someone earning $40,525, after deductions, would be taxed as follows:

As shown in this table, someone earning $40,525 after deductions will pay federal income tax totaling $4,664, or roughly 11.5 percent of their income. Such an individual would be referred to as being “in the 12 percent bracket” because that is the highest bracket under which a portion of their income is taxed.

It does not mean, however, that all of their income was taxed at that rate. So when you hear people like me complaining about extremely high tax brackets, we’re really only complaining about the rate at which an upper tier of income is taxed.

For an FYI, below is a breakdown of the IRS 2021 brackets for a single individual^[3].

Source: 2021 Federal Income Tax Rates, Brackets, & Standard Deduction Amounts | IRS.com

This wraps up the section of this article on the types of taxes (federal, state, and local) that many pay as well as an explanation of graduated tax brackets.

The last quick point to cover, before getting into specifics on minimizing your taxes, is to understand the differences between taxes paid and payments sent to the government during the year.

Freelancers need to be aware of the difference between taxes paid and payments made during the year

Back to top

I have spoken with many people who have not considered the difference between tax payments they make during the year and the taxes they actually pay for the year.

This is crucial for freelance developers, and anyone who is self-employed, as failing to make proper payments during the year can result in penalties from the IRS.

Let’s take a look at the difference between taxes paid in and actual taxes paid and then we’ll look at how you go about paying your taxes as a freelancer.

If you’ve had a job, then you’re familiar with your employer withholding taxes from your paycheck. These taxes are then sent to the federal government. At the end of the year, when you prepare your tax return, you determine the amount of tax to be paid to the government based on your income. The payments made, through your paycheck withholdings, are then applied to this amount.

If your withholdings exceed the tax to be paid then you receive a refund for the difference. If the taxes to be paid exceed the amount of your withholdings, then you owe the IRS the balance.

Before discussing how you pay your taxes during the year, as a freelance developer, it is important to understand one thing about receiving a “tax refund.”

I know many people who get excited at the end of the year because they will be receiving a refund. These individuals often see this refund as some type of windfall being given to them by the government. What they do not understand is that it is their money! It is simply a refund of the overpayment made toward their taxes. In other words, by paying in too much during the year, they were essentially loaning their money to the government interest free and getting the surplus back at the end.

While I do not like to owe money at the end of the year, it certainly is not good financial management to loan money to anyone interest free. This is why I try to structure my affairs in a way where I either have no balance, or a small one that avoids a penalty, at year end. This way I have more money during the year.

If you are a freelance/self-employed developer then you are not having taxes withheld from your pay during the year if you receive a 1099, if you are a sole proprietor, or if you operate an LLC which has not made the S Corporation election. This is because you are being paid directly by your customers.

If you do not make regular payments to the government during the year, and if you underpay your taxes by a sufficient enough amount, you may be assessed a penalty from the IRS in addition to any taxes you owe.

In order to ensure that you are not hit with a penalty, you need to make quarterly payments to the government using form 1040es. While the form provides a calculator of how much your quarterly payments need to be, in order to avoid a penalty, this does not mean you will still not owe the IRS money at the end of the year. It is crucial that you discuss your estimated payments with a tax professional.

How quarterly tax payments are calculated, and the application of penalties, can become quite a lengthy discussion which goes beyond the scope of this article. My strong suggestion is that you be aware of this issue, ensure that your payments are made, and that you discuss your situation with a tax accountant.

The payment of taxes during the year works differently from self-employed developers who have formed an LLC and have opted to have it taxed as an S corporation. This is because, as explained above, the owner of an S corporation must pay themselves a “reasonable salary.” Any profits in excess of that salary are then distributed to the owners.

The payment of the salary, however, means that the owners of the business are receiving a paycheck from which taxes can be withheld.

Remember that the owner of an S corporation must pay federal income tax on both their wages and their profits. So, while the taxes on the wages will be withheld on your check, you still need to make sure you are paying in enough to cover the taxes on your profits.

In our business, we handle this by having additional federal income tax, in addition to what would already be withheld, taken out of our paycheck. Again, discuss your situation with a tax professional to figure out your best course of action.

Now that all of that is out of the way, let’s take a look at the tax consequences associated with the different business structures available to a freelancer.

How a freelance developer’s business structure will impact their tax liability

Back to top

The way in which you structure your business activities is going to impact the extent to which you pay various taxes.

Generally speaking, you will either be working as an independent contractor, who receives a 1099 at the end of the year (typically a bad idea), a “sole proprietor,” as the owner of a Limited Liability Company (known as an “LLC”), or you may choose to be taxed as an S corporation.

There are different levels of complexity that come along with each of these structures, just as there are different benefits with each. To understand how this impacts what you will pay the tax man, let’s dive into how a typical company employee is taxed and then how freelancers can be taxed under each of the business structures I just mentioned.

First, however, we will need to understand the rules surrounding what is known as the “Qualified Business Income” deduction. This is also known as the “QBI” deduction.

The Tax Cut & Jobs Act of 2017 created the Qualified Business Income deduction

Back to top

The Qualified Business Income deduction was created under the 2017 Tax Cuts & Jobs Act. This deduction allows a self-employed individual to avoid federal income tax on the first twenty percent of their business income as long as their total income is below $164,900. Yes…….I know that sounds confusing. Let’s break it down a bit.

If your total income is below $164,900 for 2021, then the first twenty percent of any income which came from “qualified business activities'' will not be subject to federal income tax. To more easily explain how this works, let’s look at how this can apply to two different situations.

Suppose Joe Developer is working as a freelancer and is able to deduct qualified business income. Joe’s entire income is from his freelancing activities and his total profit for 2021 was $150,000. Joe will only pay federal income tax on $120,000 worth of income as he is not taxed on the first twenty percent of his $150k in profits.

Now suppose that Jill Developer has freelancing income of $30,000, a salary of $100,000 from a full-time job, and another $20,000 of profit from rental units she owns. Jill’s total income is also $150,000.

Jill, however, will be taxed on $144,000 of income as only the $30k was related to a “qualified business.” Thus, only the $30,000 is subject to the Qualified Business Income deduction. If Jill’s total income had been over $164,900 then she may not have been able to deduct her QBI at all.

Now let’s look at how the QBI, and other tax related issues, apply to having a job, having a business, and how the form of your business impacts tax obligations.

Developers who work as W2 employees will likely pay a higher amount in taxes than a freelancer

Back to top

When someone takes a job working for a company then they will be considered a “W2 employee.” This means that the employer will issue a W2 at the end of the year, to the employee. The employer will withhold federal income taxes and FICA (explained above) from the employee’s paycheck.

One of the biggest downsides of being a W2 employee is that the income that flows from it is the most taxed income someone can earn. This is because they are responsible for federal income tax on all of their income. They are also responsible for Social Security taxes for all of the first $142,800 which they earned for 2021 (this limit adjusts each year). Finally, they are also responsible for Medicare taxes on all of their income.

It’s pretty hard to get ahead in life when someone is automatically taking a slice of everything you make. This is the situation which W2 employees find themselves in. Fortunately, those who go the freelance route have options. Let’s look at each of these in turn.

Freelance developers, who do not form a business, may be able to reduce their tax obligations.

Back to top

A freelance developer, who does not form a business, will receive a 1099 at the end of the year. Depending on whether their freelancing activities are continuous and ongoing, they may be able to consider themselves a “sole proprietor,” which is explained below. Sole proprietors are eligible for the Qualified Business Income deduction explained above.

The key to whether someone, who has not formally formed a business, can consider themselves a sole proprietor is whether their activity is continuous and ongoing. Let’s explain this with a few examples.

Suppose Joe Developer has a full-time job but takes a single side project which will take six months to complete and he does not form a business. He is paid $100,000 for this side project and receives a 1099 at the end of the year.

During this time, he takes no other projects, does not attempt to gain other projects, and ceases “freelance” work once his one project is completed.

Most likely, Joe’s activities are not “continuous and ongoing” and were, instead, a one-time activity. Likely, Joe would not be able to call himself a sole proprietor and would have to pay federal income on the entire $100,000 as an independent contractor.

Now suppose Jill Developer took small projects throughout the year and earned $30,000 from her side hustle. She was continuously looking for more work and/or performing work for different customers.

Because Jill’s activity is “continuous” she would likely be able to take the QBI deduction. This means she would only pay federal income tax on $24,000 of the money she earned ($30k-20%).

One thing that is important to remember for both Joe and Jill, is that both independent contractors and sole proprietors must pay “self-employment” tax on all of their business income.

Self-employment tax is the equivalent of FICA/Medicare payments. So, in other words, Jill would pay slightly less federal income tax than a W2 employee due to the QBI deduction and would pay the same level of self-employment tax that a W2 employee would pay in FICA/Medicare taxes. Joe would be at the same level of taxation as a W2 employee in all regards.

As these examples show, if you go the freelance route then you can see tax benefits (mainly the QBI deduction) as long as you are not simply completing a “one off” project but are, instead, engaging in continuous activity.

Forming a formal sole proprietorship can yield tax benefits for freelance developers

Back to top

A sole proprietor is someone who is self-employed but does not start a formal business entity, such as an LLC or a corporation. This is an individual who obtains a local business license and registers a trade name (depending on the rules and laws of their particular locale).

Income earned through this business is reported on Schedule “C” of their personal tax return and is eligible for the Qualified Business Deduction. As with an independent contractor, a sole proprietor will pay self-employment tax on all their profit.

One of the benefits for forming a formal business is that it clears up ambiguity regarding whether you can consider yourself a sole proprietor.

In the example above, Joe developer likely could not classify himself as a sole proprietor as he was not engaged in continuous business activity and had not formed a business by obtaining a business license and registering a trade name.

By forming a business, you can more comfortably call yourself a sole proprietor (generally speaking) and ensure that you receive the benefits of the Qualified Business Income deduction.

Acquiring a business license and trade name is often inexpensive in the grand scheme of things. There’s a good chance that it’s worth it to do so.

Freelance programmers have the option of forming an LLC

Back to top

Another option for a freelance programmer is to start a Limited Liability Company. This is a company which is considered to be a separate entity from the owner.

There are many benefits which come with forming an LLC. These benefits include quite a few things which are beyond the scope of this article, such as liability protection, the ability to bring in partners with ease.

When you start an LLC, you will form the entity through your given state’s Secretary of State Office. You will also need to check your state’s requirements regarding business licensing and so on.

The LLC will have its own bank account and customers will be billed through the LLC. The owners of the company can withdraw money from the business in the form of “distributions.”

The LLC will, itself, pay no taxes during the year. It will report its revenue and expenses to the IRS via tax form 1065. At the end of each year, the owners of the business will receive a form known as a K-1. The owner will be responsible for any taxes on their respective share of the LLC’s profits.

Freelance developers who operate as an LLC will be able to take the Qualified Business Income deduction explained above. They will also be fully responsible for self-employment on their share of the LLC’s profits. Let’s look at how this works in practice by way of example.

Jill Developer and Joe Programmer start an LLC together and start taking customers. Jill owns sixty percent of the business and Joe owns forty percent. The business earned $100,000 in profit for 2021. Jill’s share of the business’ income is $60,000 (sixty percent) and Joe’s is $40,000 (forty percent).

Since the Qualified Business Income deduction applies, $48,000 ($60k-20%) of Jill’s income will be subject to federal income tax. $32,000 ($40k-20%) of Joe’s income will be subject to federal income tax. Each will be responsible for self-employment tax on their entire share of the company’s profits.

A single individual can also start an LLC – it does not have to take the form of a partnership. For tax purposes, however, a single member LLC is referred to as a “disregarded entity” and the single owner will file a Schedule C as if they were a sole proprietor.

For federal tax purposes, this will have little difference as the tax consequences of being a sole proprietor and an LLC are essentially the same. However, there may be differences in terms of state taxation and it is important to remember that there are non-tax benefits, such as liability protection, which can come from forming a single member LLC.

Self-employed developers can save federal income tax and self-employment tax by taking the “S Corp election”

Back to top

Another option for self-employed developers is to form an LLC and opt to be taxed as if it were an “S” Corporation.

Under this scenario, the business is an LLC but, for tax purposes only, is treated by the IRS as if it were an S corporation. This provides the owner with the benefits of owning an LLC but also comes with some additional tax benefits – the main benefit being that the company’s profits are not subject to self-employment taxes.

Let’s look at how an S Corp election achieves this and how you can make the election when you start your business.

When an LLC opts to be taxed as an S Corporation, the owners must pay themselves a “reasonable salary.” This salary comes on a paycheck to the owner and the paycheck is taxed the same as it would be for any other W2 employee.

After that, however, the owner(s) start to receive multiple tax benefits. First, if you're a self-employed developer then the company’s profits would be considered Qualified Business Income, meaning you can take the QBI deduction.

Second, the profits of the company are not subject to self-employment taxes. This means that an S Corporation election can result in multiple benefits.

Suppose Jill Developer wants to go the freelance route. She starts an LLC and opts to be taxed as an S Corporation. Jill determines that a “reasonable salary” for a developer of her skill level is $60,000 per year. The S Corporation pays Jill her $60,000 salary. The Corporation also has profits of $50,000 in excess of the $60,000 salary. This means that Jill has a total income of $110,000 ($60k salary + $50k profit).

However, only $100,000 of this will be subject to federal income tax. The $60k salary is taxable, and because of the twenty percent QBI deduction, only $40k of the profit is subject to federal income tax. Also, the $50k in profit is exempt from self-employment tax.

So, while a sole proprietor or LLC owner would pay self-employment tax on the full $110,000 of income, Jill will only pay self-employment tax on her “reasonable salary.”

Forming an LLC is typically accomplished through the Secretary of State. To be treated as an S Corporation, the LLC will need to complete and send IRS form 2553 to the Internal Revenue Service.

It is important to note that form 2553 can only be sent to the IRS within seventy-five days of the start of your tax year. This means if you just started the LLC, you have seventy-five days from the date of the founding to make the election. Otherwise, you have to wait until the next tax year starts to be treated as an S Corporation.

If you miss this deadline, you will have until seventy-five days after the start of the next tax year to make the election effective for that year.

The benefits of an S Corporation exceed those of a sole proprietorship or LLC. An S Corporation, however, does come with additional burdens and things to consider. It’s important to weigh all the pros and cons when deciding which business entity is right for you.

Developers should pick the business structure which bests fits their situation

Back to top

After going through all the options above, it may seem like forming an LLC with S Corporation status is the obvious choice. That is the structure which offers the most possible tax advantages.

It is important to remember, however, that each level of tax savings is also going to come with additional levels of red tape and expense.

On one end, forming a sole proprietorship is straightforward, as getting a business license and trade name are often inexpensive and low cost. On the other end of the spectrum is S Corporation status – this involves paying yourself a “reasonable salary,” which means managing payroll filings and other regulatory hurdles. It’s important that you pick the structure that best fits your situation.

Again, you should discuss any decision as to how you should structure your enterprise needs with a tax professional (which I am not). My personal, non-professional opinion, is that the more you're intending to grow your business the more it makes sense to take your business structure up a notch.

In our company, the taxes we save justify paying for Quickbooks Payroll Service and the time involved in managing payroll. In other words, the benefits outweigh the costs.

If, however, you are only taking a project here and there, then you will need to weigh potential tax savings against the time and expense of a given structure.

At the end of the day, how to structure your business is a personal choice. Understanding how the choices impact your taxes, however, is important to planning your business and trying to get ahead in this world.

Now that we’ve looked at how the structure of your business will impact your tax obligations, let’s look at the importance of taking, and maximizing, your various deductions.

Freelance & self-employed developers must understand the importance of tax deductions & utilize them

Back to top

A big part of minimizing your tax obligations is to make sure that you're utilizing all possible deductions.

The extent to which I talk with people, on a regular basis, who aren’t maximizing their deductions is astounding to me personally. These people are leaving large amounts of money on the table while simultaneously complaining about not being able to “get ahead.”

This section of this tax guide is going to be dedicated to discussing the importance of deductions.

First, we’ll look at how not utilizing your deductions amounts to donating money to the government.

Second, we’ll look at various expenses which can be deducted from your taxable income at the end of the year.

Finally, we’ll look at how proper retirement planning can impact your tax bill. Before diving into these topics, however, I believe it is important to explain the concept of a “deduction.”

Many people are familiar with the concept of a tax deduction. Most, however, don’t understand that a deduction is not a dollar-for-dollar credit. Instead, deductions reduce income which, in turn, reduces your tax bill.

Earlier in this guide we looked at how the higher your income is, the more you pay in taxes. If, for example, you are in the twenty-four percent tax bracket for 2021, then the last dollar you earn will result in a twenty-four-cent tax obligation.

We also looked at the fact that freelancers pay taxes on their profits and not on their revenue. This means that if you have one hundred dollars of revenue, and ten dollars of business-related expenses, then you only pay taxes on ninety dollars of income ($100 revenue - $10 expenses).

Putting these concepts together, we see that if you are in the twenty-four percent bracket, then your tax obligation would be $21.60 on that last $90 (24% * $90). So, by deducting $10 in business expenses from $100 in revenue, you save $2.40 in taxes ($24 - $21.60).

In other words, anything you deduct as an expense means a reduction in the income that you must pay taxes on. It is, therefore, important that you understand which business expenses are deductible and that you report them to your accountant/on your tax return.

Developers are essentially donating money to the government if they fail to deduct their business expenses

Back to top

I talk to way, way, way, way……way too many small business owners (including developers) who don’t do a good job of making sure they claim all their business expenses as deductions at the end of the year. This amounts to unnecessarily donating money to the federal government.

Think of it like this – if you don’t write off an expense, which was deductible, then you must pay taxes on that money. Let’s look at this by way of example.

Jill Developer brings in $100,000 in revenue in her freelance business. She deducts $20,000 for services which are necessary to her business (AWS, and so on). This brings her taxable income (the amount she will pay taxes on) down to $80,000.

However, as part of her work, she regularly drives to meet with customers. Over the course of the year, she incurs $2,000 worth of work-related mileage on her car. She does not deduct this mileage as an expense (more on this below).

This means that Jill paid $2,000 for her work mileage and paid $440 in unnecessary taxes by not writing it off. This amounts to Jill letting the government keep $440 of her money unnecessarily. Here’s a tip for Jill if she wants to get ahead in life: don’t do that.

It’s common for self-employed individuals to be unsure of what, and what is not, deductible as a business expense. A rule that I live by in our business is to err on the side of assuming that something is deductible and then asking our accountant about it.

If you don’t report an expense to your accountant, then they have no way of knowing the expense even existed. This can result in deductible expenses being missed.

If, instead, you let your accountant know about everything and then let them exclude non-deductible expenses, you ensure that you don’t miss any deductions.

In other words, make sure your accountant knows about all your expenses. This will help to prevent you from donating money to the government.

Common expenses which developers can deduct from their taxes at the end of the year

Back to top

The discussion above, hopefully, drives home the point of making sure that you deduct all your business expenses. Unfortunately, many freelancers don’t deduct any of their expenses.

So, let’s devote a bit of this guide to understanding the more common deductions which you should be claiming as well as some of the less obvious/lesser-known ones.

First, there are things which can clearly be classified as business expenses. If you are paying for a service such as AWS, for example, it can be deducted from your revenue as an expense.

If you are renting an office of any sort, or if you pay for a post office box that is solely dedicated to your business, then these expenses will generally be tax deductible.

Likewise, expenses related to an office, such as utilities, are clearly a business expense.

Unfortunately, many developers miss out on some of the lesser known/considered deductions.

The first commonly missed business expense is work-related mileage. For the 2021 tax year, self-employed individuals can deduct up to fifty-six cents per mile for work-related driving. This is meant to cover the cost of gas, depreciation on your car, insurance, and so on.

Examples of “driving for work,” can include driving to meet with a customer, driving for a dinner meeting with a potential client, driving to Best Buy to purchase work-related equipment, and so on.

Work mileage does not include driving from your house to your office (that is your daily commute) and vice versa.

If you are a sole proprietor, then you will deduct the mileage on your Schedule C. Under the Tax Cut & Jobs Act of 2017, however, mileage on a personal vehicle became non-deductible for an LLC owner. But if you have elected for S Corporation treatment of your LLC, it is still possible to claim the mileage deduction.

This is accomplished by having the S Corporation (the company) reimburse the employee (you) at the rate of fifty-six cents per mile for the use of a personal vehicle. This is not taxable to the individual (you) and is deducted from the S Corporation income which flows through to the individual (you).

So, in a nutshell, if you are a sole proprietor then you can deduct your mileage. If you own an LLC with an S Corporation election, you can deduct your mileage by having the company reimburse you for the mileage expense.

A second commonly missed deduction is the use of a personal cell phone. If you have a separate cell phone, that is in the name of the business only, then the cost of it is clearly deductible.

But what if you use your personal phone for work purposes? The answer is that you can write off the portion of your bill that can be apportioned to work. So, if forty percent of your personal cell phone usage is work related, then you can claim this as an expense on your Schedule C if you are a sole proprietor. If you own an LLC or S Corporation then your business can reimburse you for that forty percent. It would be deductible to the business and non-taxable to the individual.

So, sticking with the forty percent example, if your cell bill is $100 per month then you would reduce your taxable income by $480 [12 months * ($100 - $40)]. This is one of the more commonly missed deductions.

Third, work-related equipment purchases are also deductible. Importantly, so are personal purchases with a work purpose. If you buy a laptop, for example, that is solely for use in your freelance business then you can deduct the entire cost of it (you may be required to depreciate it over time – that’s a question for your accountant).

But what about a laptop that is used for both work and personal purposes? Like with a cell phone, you can deduct the portion of it that is “work related.” So, if you pay $1,000 for a laptop and sixty percent of its use is work related, you can deduct $600 from your taxes.

Another commonly missed expense is the one for non-extravagant work travel. This can include airfare, nights in a hotel, and meals for business related travel.

The key point of this deduction is that the travel must be non-extravagant and primarily for work. In other words, if the trip is a vacation in disguise, then you can’t deduct these expenses. If you can meet the standard of “primarily for work,” however, then these expenses became fully deductible under the Tax Cuts & Jobs Act.

The foregoing are just a few examples of deductions which are often missed. Talk with your accountant to see what other opportunities for deduction you may be missing.

Freelance developers can minimize their tax burden by maximizing retirement plans

Back to top

One of the big things people in the U.S. are missing out on is the ability to partially fund their retirement through tax savings. Whenever I meet someone who isn’t maxing out their 401(k) through their employer, I just shake my head to be honest.

Fortunately, if you are a developer taking the freelance route (which I assume is why you’re reading this guide), then you’re not going to make that mistake.

To see how you can build wealth, and save money at the same time, let’s look at what you can be doing with an IRA or a SIMPLE (short for “Savings Incentive Match Plan for Employees”).

Before looking at an IRA and a SIMPLE, let’s understand how the IRS treats retirement plans in general.

Contributions made to retirement accounts are tax deductible. This means that you will not pay federal income tax on income used to fund these accounts. For 2021, the most an individual could contribute to an IRA was $6,000. The limit on a SIMPLE for that same time was $13,000.

It is important to note that there are low-income limits in terms of being able to take both. If you have a Modified Gross Income of less than $76,000 then you can still contribute to both an IRA and a SIMPLE. You will not be able to reap the full tax benefits, however, if your income is over $66,000. So, let’s take a look at how these work.

An IRA is an “Individual Retirement Account.” As just mentioned, you can contribute up to $6,000 per year for 2021 (this number changes each year).

The amount you contribute to your IRA is deducted from your taxes at the end of the year. You then invest the money in an investment vehicle of your choice. Any gains in that investment, and dividends paid on the investment, are [MBD2] not taxed.

When the person reaches 59 ½ years old, they may then withdraw money from the IRA to live on. Those withdrawals are taxed as “regular income” at the time of withdrawal.

Suggested Reading: Unshakeable by Tony Robbins (Link goes to Amazon)

Let’s look at how an IRA works in practice. Jill Developer has a taxable income of $80,000 in freelance business for 2021, after taking her QBI deduction. Her federal income tax obligation for the year is going to be $13,348 and her top bracket is twenty-two percent. That’s a lot in taxes.

Now suppose Jill had contributed $6,000 to her IRA. This would drop her taxable income to $74,000 and her tax obligation would have been reduced to $12,028 due to her lower taxable income. This means Jill would have saved $1,320 in taxes.

Further, this means that contributing $6,000 to an IRA only cost Jill $4,680 ($6k contributed - $1,320 tax savings). So, at the end of the day, Jill wound up with $6,000 in retirement savings, which will grow tax free, at a cost of only $4,680. What’s even more beautiful is that any individual can contribute to an IRA.

Another option is to create a SIMPLE if you have an LLC that is being taxed as an S Corporation. A SIMPLE is a type of plan which allows employers to contribute to the retirements of their employees. It is like a 401(k) but is for smaller businesses.

As stated above, if you are being taxed as an S Corporation you are both the business owner and an employee of the business. This means that you can create a SIMPLE.

Under this type of plan, the employee (you) could contribute $13,000 to their retirement for the 2021 tax year. The employee can deduct this amount from their taxable income. The company (which you own) can then match contributions of the employee (which is you) for up to three percent of the employee’s salary. This match is deductible from the company’s profits.

Now let’s look at a Simple in action. Remember Jill Developer? Well….she’s back. Jill has started an LLC and has elected to be taxed as an S Corporation. The company pays Jill her “reasonable salary” of $60,000. It also has profits which, after her QBI deduction, give her a total taxable income of $132,000 (salary plus profits). Jill’s federal income tax obligation is $25,701.

Now, let’s suppose that Jill had contributed to a SIMPLE. She could have contributed $13,000 as an individual and the company (which she owns) would contribute $1,800 (three percent of her salary). Once all the numbers are crunched, Jill will have received $14,800 in retirement contributions at a real cost of $11,623, after factoring in tax savings.

The moral of the story for either an IRA or a SIMPLE is that a self-employed developer can partially fund their retirement, and build wealth, through tax savings.

How small business owners and freelance developers can make their tax payments during the year

Back to top

Tax withholding is simple when you are a W2 employee. You go to work, you get a paycheck, and your employer withholds any necessary taxes from that paycheck.

When you are working for yourself, however, making your tax payments during the year becomes your responsibility.

Not paying in enough during the year can result in a large bill when you file your tax return. It can also result in a potential penalty. Conversely, paying in too much can mean that you are loaning your money to the government interest free – not a good idea.

Before we get into how self-employed developers can make their tax payments during the year, let’s look at tax withholding as a general concept, and the consequences of paying in too little, or too much, during the course of such a year.

Federal tax payments made during the year (whether through payments you make or withholding from a paycheck) goes to the IRS, and the US government uses that money to fund its current operations (along with money it borrows to finance the deficit – but that’s a different discussion).

At the end of the year, you file a tax return which calculates how much tax you owe for the year, as explained throughout this guide.

If, during the year, you paid in more than the amount shown as required on your tax return, you will receive a “refund” equal to the amount which you overpaid. Conversely, if you paid in less than the amount shown as required on your tax return, then you must pay the balance to the government.

There are consequences for failing to pay in enough tax during the year. If an individual owes more than $1,000 in tax at the end of the year, then they will face a penalty unless their payments during the year amounted to at least ninety percent of the total year’s tax or if the tax they paid during the year was equal to the total tax paid the prior year.

If a penalty is assessed, then interest will apply to that penalty until it is paid. Yes, this seems convoluted. Let’s look at a few examples to see how this works in practice.

Jill Developer earned “x” as a freelancer in 2021. When she completes her tax return, it shows that her total tax obligation for the year was $10,000. Jill only paid $8,500 in tax payments during the year. This means she has a balance of $1,500.

Because this balance is more than $1,000, Jill may owe a penalty. Now Jill must look at her 2020 tax return. If her total 2020 tax obligation is $8,500 or less, she will not owe a penalty. This is due to the fact that her 2021 payments were equal or greater than her total 2020 tax obligation. If her 2020 return shows a tax obligation of more than $8,500 then she will owe a penalty.

Now suppose Jill’s 2021 tax obligation is $20,000. Further, suppose her 2021 tax payments only equal $18,500. Jill has a balance of $1,500. Again, Jill may owe a penalty due to this $1,500 balance. In 2020, Jill’s tax obligation was $30,000. While Jill owes more than $1,000, and has 2021 payments that were less than her 2020 obligation, she will not owe a penalty for 2021. This is due to the fact that her 2021 payments were more than ninety percent of her total tax obligation for the year.

There are potential consequences that come with paying too much in tax payments during the year as well. These consequences are the fact that doing so amounts to loaning money to the government interest free.

In other words, making excess payments during the year, just so you can get money back without any interest, at the end of the year, isn’t exactly the road to financial success.

As you’ve probably gathered from reading this guide, smart tax management is one of the keys to “getting ahead” financially. Loaning money out for free is not smart. It is also pretty common for people, who get excited about having a refund at the end of the year, to be the ones who didn’t manage their taxes correctly and paid too much as a result.

Consider the following example. Joe Developer had a total tax obligation of $15,000 for 2020. This means that Joe did not need to pay more than $15,000 during 2021 in order to avoid a penalty.

Although Joe’s business wasn’t considerably growing in 2021, he still paid in $20,000. Furthermore, Joe did not structure his business as an S Corporation (see the discussion above). So, this means that for 2021, Joe loaned $5,000 to the government interest free. He also paid unnecessary self-employment tax by not taking the S Corporation election.

Joe just doesn’t understand why he can’t get ahead with his finances, but never stops to think that his tax management may be a culprit. Unfortunately, there are a lot of people like Joe out there.

Now that we’ve discussed the problems with paying too little, and too much, tax during the year, let’s discuss how a freelance developer can make their tax payments during the year.

If you are self-employed, there are multiple ways in which you can make your tax payments during the year.

First, if your business is being treated as an S Corporation, then you will receive a paycheck as you are an employee of the business as well as the owner. Taxes will be withheld from these paychecks, as they are with any other employee’s check.

If you are not being taxed as an employee, then you must make estimated tax payments each quarter. Let’s look at each of these in turn.

If you are receiving a paycheck from your business, then the taxes withheld will only be based on the amount of the paycheck. This can leave you with a large tax obligation, at the end of the year, which stems from the business’ profits.

One option for dealing with this is to have additional money held out of each check, on top of what would be held out normally. These extra withholdings can serve to deal with the taxes due on your profits. If you do not wish to have extra money held out of each paycheck, then you can make quarterly estimated tax payments (more on this below).

If you are not receiving a paycheck, then you must make estimated tax payments to the IRS during the year. These estimated payments can be made by sending a check, along with Form 1040-ES, to the IRS. Payments can also be made directly through the IRS website.

How much you should be paying during the year is an issue which I would suggest discussing with a tax professional. Again, paying too little can result in a penalty while paying too much can result in you loaning money to the government interest free.

How to best manage your payments during the year is going to depend on your specific situation and it is strongly suggested that you make your decisions in consultation with a CPA.

Where you choose to live will impact your overall tax bill

Back to top

As mentioned earlier, there are several layers of taxation in the U.S. These include various federal taxes (which have been the main focus of this article). But these also include state and local taxes. Such state and local taxes can include taxes paid to the state you live/work in as well as the city you live/work in. These state and local taxes can vary wildly.

Since, as I’ve been repeating over and over, consideration of your taxes is important to your financial wellbeing, it is important to understand that where you choose to live will impact your tax burden.

I’ll spare you a long discussion (as this guide is long enough already), about the various tax structures in different states. The biggest thing to consider is this: some states have no state income tax, some states have an income tax where self-employed people are highly favored, and other states have a high state income tax.

Nevada, for example, is a state in which there is no state income tax on individuals. Ohio has a state income tax, but self-employed individuals enjoy several exemptions. Living in California will result in paying a high state income tax.

Life is about choices, and these include the choice of where you live. If you are choosing to live and work in a place with a high cost of living, and a high tax structure, then getting ahead is going to be highly difficult.

Earlier in this guide I mentioned a friend from San Francisco who didn’t realize that her taxes were her second largest expense. Well, she lives in California where housing prices are sky high, and taxes are sky high. I live in Ohio, where housing is cheaper and state income is largely waived for self-employed persons such as myself. Where you live matters.

Closing Thoughts

Back to top

If you’ve been reading this guide, then I’m assuming that you have a desire to save on your tax bill. Being mindful of your taxes is one of the most powerful things you can do when it comes to getting ahead financially.

By starting a business, structuring it appropriately, and being mindful of where you live, you can greatly improve your financial standing.

If you feel like you are struggling financially, then ask yourself these two questions:

1. Are you actively trying to reduce your tax bill?

2. Are you willing to move to a state with a lower cost of living?

Unless you answer “yes” to each of these questions, and then act on them, the first thing to do when it comes to your finances is to have a harsh discussion with the person in the mirror.

Just food for thought.

About Me

I am a front-end developer and the founder of Modern Website Design. I enjoy writing on business-related issues and am passionate about entrepreneurship. To keep up with more of my ramblings, follow me on Twitter.

If you're thinking about striking out on your own, you'll likely have two questions. First, you may ask “what is freelancing?” This is understandable, given that the phrase can mean different things to different people.

The second question you might have is how you can get clients. This is, of course, important, since working for yourself without having any customers will result in you looking like this:

The good news, if you're thinking of spinning up your own brand, is that if you go about it right then you can wind up looking like this:

So, with all that said, let’s first answer the question “what is freelancing?” And then, let’s talk about how to get clients online as well as locally in your city.

If you're like me and prefer to take in written content, read on. For those who prefer video, I've prepared a video presentation on these topics:

I’ve written for freeCodeCamp on how to make money as a freelance developer. I’ve also written a comprehensive guide to working as a freelancer. This article is going to be different in that it is going to solely focus on two issues.

First, I’ll give my personal opinion as to what it means to be a freelance developer. Second, I’ll give my thoughts on getting the customers once you’ve struck out on your own.

I'll break the latter of these points into three parts. First, I'll discuss the tasks you should complete before you even begin attempting to get customers. Next, I will go over how to get clients through your online presence. The third part will cover ways in which you can get customers locally in your own city.

Here’s a quick roadmap of this article so that you can jump to a particular section:

1. What does it mean to be a freelance developer?

2. What to do before you try to get new customers

3. How to get new customers online

4. How to get new customers in your city or locale

5. So…...let’s get to it.

   What does it mean to be a freelance developer

   back to top

   The term “freelance” has been thrown around a lot in today’s society (including in lots of areas outside of software development). So much so that it has really become a buzzword that can mean different things to different people.

   If you’re thinking of striking out and doing your own thing, then being a “freelancer” can really mean one of two things.

   First, you may be considering creating your own side-hustle. Second, you may be thinking of actually being self-employed. Let’s look at each of these in turn.

   Some people choose to hold a steady job while running a development business on the side

   Going out on your own can be a great way to supplement your current job. Maybe you’re completing freeCodeCamp and are hoping to work a dev job at a company while doing projects on the side.

   You may also have a non-software related job, that you want to keep, but you would like to be a part-time developer on the side.

   In either of these cases, your business is a part-time activity. Since you already have a full-time commitment it’s unlikely that you’ll work with more than a few clients (or maybe even only one) at a time.

   When going this route, getting customers is still important, so the tips below will apply to you even though you’re not necessarily trying to scale up your business.

   One of the downsides of going the side-hustle route is that it means working a full-time job while trying to run your business. While this comes with the benefit of having steady income (from your primary job), it comes with the downside of being really busy.

   Going this route tends to result in Friday only meaning that there are two more working days before Monday. It also comes with the stress of not being able to respond to your customers right away because you have your main job to deal with. These are just some of the ups and downs of going this route.

   Some people may choose to make their development business their sole occupation

   Many individuals either leave their current software job, or start out their development career, by working for themselves primarily and not as a side-hustle.

   This allows you to focus more on development of your own products and working for your own customers. As a result, you have much more flexibility with your schedule, since you’re not juggling against a full-time job.

   Some who go this route are attempting to grow as much as possible while some are just hoping to maintain a steady stream of income and have a flexible lifestyle.

   Focusing solely on your own thing can result in having a much higher income. This is because I, and many others, find it easier to make more when working for yourself than when working for a paycheck from a company.

   The biggest downside of going this route, however, is the fact that you have no other income stream. This means that your income will be unsteady at best.

   You may have noticed that neither of the aforementioned descriptions mentioned employees. That’s because once you get to the point of having employees, you’re no longer a “freelancer” - you’re a business owner.

   In a future article (spoiler alert), I’ll discuss how to scale your freelance dev gig into a full fledged business.

   Which route you decide to take is really up to you. Just remember that it’s important to base your choice on your personal situation, preferences, and what it is you want going forward.

   Now let’s talk about what going forward looks like.

   What to do before you try to get new customers

   back to top

   The best way to grow your business is to do a good job for your existing customers. But before you can worry about that, you have to set up your branding.

   Not setting up branding, which I’ll discuss in a moment, means that you go out and try to get business before potential customers might be willing to take you seriously. Don’t do that.

   So….two tasks to complete before even attempting to get new customers are:

   1. Understand the importance of repeat business & referrals, and

   2. Set up your branding.

Let’s look at each of these in turn.

Freelance developers must focus on existing customers if they want to grow their business

If you ask anyone who has their own business (not just developers) how to grow sales, they’ll almost immediately start talking about marketing of some sort. In other words, they focus entirely on getting inquiries from people who haven’t yet heard of them.

These business owners often devote time and other resources to marketing and, as a result, they take time and resources away from serving their current customers. I refer to this approach, in very technical terms, as:

When you take time and resources away from your current customers, then those individuals/companies are waiting longer to get their product, they're waiting longer to hear back from you if they have questions, and are less likely to be happy with the service they’ve received.

They, in turn, are then less likely to call you for future work and are less likely to refer you to anyone.

The results of this can be disastrous. This disaster comes from the fact that not having repeat business or referrals means that you are one-hundred percent reliant on getting your customers from advertising or some form of networking.

Suppose you’re spending money or time to get new customers (money in the form of advertising and time in the form of networking/reaching out). That time and money means that your profit margins are going to be low.

First, suppose you charged $3,000 for a website, but spent $250 in marketing to get the customer. This means that your profit is only $2,750.

Second, suppose you charge $3,000 and can complete the product in fifteen hours. That’s $200 per hour. But if you spent 2-3 hours networking to get the customer, then you have to consider how that time impacts the amount you are making per hour.

Incurring these financial costs and time losses means that you’re going to struggle to make any money. This is not the case when you build up a referral base and repeat business base.

Let’s look at how things go when you focus on your existing customers first. Yes, you spend some form of resources to get a customer. But then that customer is likely to come back to you in the future when you need something else. This means you pick up additional work without spending any additional resources.

Second, they then refer you new potential customers - meaning that you get new business without expending any time or resources. This drives up your profit margins, leads to exponential growth, and helps you look like this:

I’ll explain with a personal example.

I built a website for a lawyer in 2013. She was extremely happy with the service I provided and roughly six months later had me build a second website for a niche legal area she was going to begin handling. I’ve also provided ongoing maintenance to the lawyer for several years now.

Importantly, this same lawyer has referred two more people. The first of these two people hired me and, in addition to building out their initial product, they have also hired me for ongoing support and maintenance.

So, I put time into going out and getting a customer (the lawyer) and the time I spent meeting with one person has resulted in my building three different websites and providing additional maintenance services.

For obvious reasons, this is more profitable than going out and having to meet three different people to get three separate jobs. Exponential growth can occur in your business when you take one inquiry (the lawyer, in my case) and turn it into several jobs over a period of time.

Building up a referral base means, again, focusing on your existing customers first. This approach is simple. If you have something to do, or something you can do, for a current customer, then do it. If you have time left over at the end of the week, then such time can be devoted to going out and trying to get new customers.

I cannot stress enough how important it is to your growth that you take a “current customer first” focus.

Self-employed developers should establish their branding before trying to get new customers

The next thing you should do as a self-employed developer is establish your branding before attempting to meet new customers.

Understanding why requires you to put yourself in the role of a small business owner.

Suppose you own the local bakery and someone comes in offering their website & app development services to the bakery. If the developer doesn’t even have a website of their own, has no portfolio of work, no online reviews, no business cards, and is using a personal email address for work purposes, then the business owner isn’t going to take them seriously.

Instead, it is much better to get these things knocked out before even attempting to meet a client.

The first order of business is to build out the website for your business and to display your portfolio of work (you can have a portfolio even if you haven’t had any clients yet).

In terms of putting together your own site, you can do it yourself or, to save time, you can use a template from html5up (make sure you follow the creative commons licensing if you use one of these templates).

For your portfolio, I’d suggest including at least five to six projects. If you haven’t completed anything yet, then you can create mock ups and include them.

An example of this would be creating a website for a fictional bakery and including it in your portfolio. Just make sure it is clear that, when someone clicks on that site from your portfolio, they will be viewing a demo and that it is not a real business.

Having a professional looking website, and a portfolio of quality work, makes you appear more legitimate to potential clients.

The second thing to get done right away is to set up online review profiles for your business. Whenever a client is happy with you, it’s important to ask them to leave you good reviews online. The presence of these reviews helps ensure that future customers are more likely to hire you.

The two most important places to have review profiles, in my opinion, are Google and Facebook. This means that you need to start a Google my Business account for your new brand. You also need to create a Facebook page for the brand.

When you’ve completed a project and the customer was clearly happy with your services, you’ll want to send them links to these profiles so they can leave you good reviews.

The final step in being ready to market yourself is to set up a branded email, order business cards, and get a business phone number.

For your cards, I would suggest going the simple route. This means using a service such as Vista Print. Setting up your email is self-explanatory.

As for your phone number, I would use a free service such as Google Voice, which allows you to have a dedicated number which will ring to your cell. Once you have all of these items completed, you’re ready to go and to start hustling up business.

How to get clients online as a freelance developer

back to top

If you have a quality web presence, it can result in an ongoing stream of business for you as a freelance developer. When establishing your online presence, however, it is important that you go about it the right way.

I strongly, strongly, strongly (strongly) suggest that you invest into your web presence as opposed to spending time and resources on it.

Because this point – investment – is so crucial, it’s the first point I’m going to discuss in this section of this article. I’ll then talk about optimizing your website for your local market and will then briefly make a few additional points about getting online reviews.

You should invest in your online presence as opposed to spending on it

One of the things I am most thankful for is that I came to appreciate the difference between investing and spending, in terms of my business, at a very early stage.

The concept is straightforward. When you invest in your web presence, you then own something at the end of the day. These owned items can take the form of blog posts, YouTube videos, and so on. You don’t have to expend any more money or time to keep these assets and no one can take them from you.

Spending money on your web presence, by contrast, involves renting ad space from third parties (which can include pay-per-click advertising, Facebook ads, and so on.).

Investing in your online presence can result in your profits going up like this:

While simply throwing money at it can result in a constant struggle and will make moving your business forward about as easy as actually getting somewhere on a treadmill.

Let’s look at why this is.

Suppose you spend $1,000 on advertising this month. Now suppose it brings you $10,000 in revenue. It’s easy to look at that and go “woo hoo!”

But there’s a problem. The $1,000 you spent on advertising is now gone and will never bring you anything past the initial $10,000. Moreover, if you don’t spend money advertising again next month then your revenue will go to zero.

This means, with a near certainty, that relying on paid ads for your online presence will lock you into recurring advertising costs that you’ll never get out of. This is a far cry from actually owning your marketing assets.

I’m going to use a personal example to demonstrate the value of owning your web presence outright.

My previous brand was acquired in May of 2020. Over the years I had written roughly four hundred blog articles targeting my potential customers. From the time I launched the website through its acquisition, my top performing blog post had received over 10,000 clicks in search.

If I had been using pay-per-click advertising to get customers, then I probably would have spent somewhere in the area of $10 per click. So that one blog article that got 10,000 clicks gave my business the equivalent of $100,000 in advertising ($10 x 10,000).

I probably spent a total of five to six hours researching and writing that one article. Once that time was spent, however, I never put another moment into that article – I owned it.

This is different from paying for an ad where you don’t own anything at the end of the day. If you own your online presence then you can grow your business exponentially and avoid large recurring marketing costs.

Again, the assets you own can take on multiple forms. In addition to blog articles, consider YouTube videos and other media which can be used to target your potential market (more on this below).

One point I want to emphasize is that you can create content which you will own. I’ve spoken with a lot of developers over the years who didn’t write blog articles or create videos because they felt uncomfortable doing so.

While I understand and appreciate this, it’s crucial for you to understand that working for yourself means doing a lot of things you don’t feel comfortable doing.

If you’re unwilling to create web content that you own, and you choose to rely on ads, then you will still be able to make money as a freelance developer. That money, however, will be nowhere near what you can earn if you choose to step out of your comfort zone a little bit and engage in regular content creation.

So, with that said, let’s move on to actually building out your web presence.

You must optimize your web presence for a target market

I’ve seen a lot of independent developers who put together a website for their business without making sure it’s actually targeting a preferred market. Instead, such websites tend to be overly broad or vague.

Such a website may simply say “I’m a developer who builds stuff for the web” or something of the sort. They then link to a portfolio of various projects, list languages and frameworks that they are familiar with, and that’s it.

Instead, it’s best to identify a market you can reach through your website and optimize your site for it.

I’ll be writing more on freeCodeCamp over the next few months about optimizing websites for search (so stay tuned). For right now, prior to building out your website, I’d suggest you familiarize yourself with Google’s SEO starter guide. Then identify a market segment that you think you can capture and optimize your website for it.

To do this, make sure that your website clearly spells out different services and is clear about what you do.

I understand that this may sound a little vague. The content of your website, however, is going to largely depend on the type of work and the geographic areas that you are targeting. To put a little more meat on the bone, I’ll use myself as an example.

I try to focus my business exclusively on building websites and apps for small to medium sized businesses (I’ve written previously on the importance of choosing a niche). My website focuses exclusively on Ohio and its various cities.

I focused my web presence solely on my home state for two reasons. First, if I was trying to compete for Google searches on a national scale, then the competition would be absurd. Going after my home market is a lot more practical.

Second, while I get many calls from out of state clients and build products for people all over the country, there are a large number of people who want to stay local when looking for a developer. Also, my website clearly focuses on website or app development, instead of trying to broadly convey everything I could conceivably build.

So what's been the result of this approach? Well...when I perform an incognito Google search for “Ohio website design” then my site appears first. This means that potential customers call me without my business having to pay for any form of advertising. I also did not pay for advertising for my prior brand, which was acquired earlier in 2020.

Does my approach result in my website reaching all of the potential customers for all of the work I’m willing to perform? No. Does it reach a high percentage of the people I’m targeting for specific work? Yes.

This results in my getting more business through my website than many freelance developers get through theirs. This is why I choose my approach over one which makes it sound like the developer can do nearly anything for anyone regardless of where they are.

You must ask satisfied clients to leave you online reviews

I mentioned above that it is important to set up online review profiles for your business. When you have completed a job for a customer it is important that you ask them to leave you a review.

The reason for this is simple. The more good reviews you have, then the more you will receive contacts through your website. While having a bank of good reviews doesn’t make more people land on your site, it does make a higher percentage of your website visitors pick up the phone and call.

Let’s look at a few quick “do’s and don’ts” when it comes to getting reviews.

The first thing to remember when getting reviews is to not ask a client for a review unless you are certain they will leave you a good one. You may have just read that sentence and are now thinking “duh,” but, trust me, you would be surprised at what some people do.

Second, it’s not enough to ask the customer to leave the review. If you want them to actually do it, you need to call the client and talk to them about leaving you a review. If they are willing to do it, you then want to email them links to your review profiles.

You will find that doing the phone call and email, in conjunction with one another, will result in a much higher percentage of the people you ask actually following through and leaving the review. Otherwise you’ll ask, and ask, and ask, and few customers will ever actually do it.

I can’t stress enough how important a bank of good reviews is to growing your business. Also, just as with web assets which you own (explained above), those good reviews can’t be taken away and don’t require you to pay out money each month.

Now let’s look at ways to get work in your local market which don’t involve your website.

How to get local clients as a freelance developer

back to top

As I just explained above, a web presence (done correctly) will actually bring in quite a few local clients. There are other things you can do, however, to get clients on the local level.

These things include talking to larger development shops about outsource/contract opportunities, going out and talking to potential customers one on one, and attending networking functions.

Let’s take a quick look at each of these methods in more detail.

There are more opportunities than you might realize when it comes to picking up work from other developers. Larger dev shops, which work on large scale projects, often are willing to (or need to) outsource a small component of the project.

There are several reasons for this. First, they may have a one-time project with which they need help. It may not make sense to hire someone for that one particular thing (since there wouldn’t be a need for the employee once the project is completed) so it makes sense to outsource.

Second, a larger shop may be in a “middle area” where they are too busy for the amount of staff they have but not busy enough to hire. Again, someone in this situation may outsource. It is common for freelance developers to get work from larger shops who find themselves in this situation.

The best way to start getting this type of contract work is to reach out to the larger dev shops in your area and introduce yourself. Again (as explained above), you need to have a website, a portfolio, and so on before reaching out. Otherwise they won’t take you seriously.

Many freelancers who reach out in this way make what I think is a mistake in that they simply send an email to the head of the larger dev shops. Instead, you want to make sure you are more personal in your approach.

I would suggest calling the head of operations on the phone, explaining who you are, and asking if you can send over a cover letter and resume stating that you are available for outsource work.

And, importantly, don’t stop there. If the developer doesn’t send you anything right away, I would follow up over the phone once a month or so. Until you’ve been bugging them for a solid year, or until they’ve told you to go away, keep following up in this manner. By showing that you are organized and persistent, you’ll actually manage to get work in this way.

Another great way to get customers in your city is to simply meet them one on one. This means walking into local businesses and discussing web services, and so on.

Again, many developers who do this tend to go about it wrong. Don’t just go door to door. Make a list of the businesses you intend to visit and actually research them. Look to see if they have a website, organize your thoughts as to how their current web presence can be improved, and also take the time to research their competition.

Being informed when you go to meet someone will go a long, long, long,........long way. Also, as with local dev shops, do not be shy about following up until you are specifically told no.

A third option for getting local clients is to attend networking events. This is something that I’ve suggested before in prior freeCodeCamp articles. This is a good option for quite a few freelancers as many don’t feel comfortable with the more direct approach I just described above.

As I said when it comes to creating content, however, stepping out of your comfort zone is important if you want to take your business to the next level. While I believe that the more direct approach is better for getting customers, attending networking groups, such as BNI can yield results as well. It really comes down to how far out of your comfort zone are you willing to go.

Conclusion

By no means is this meant to be an exclusive guide as to how you can get business, both online and in your community. The methods and approaches I've described above, however, have worked for me in my business and have led to my previous brand being acquired.

The last point I’ll make is that your web presence and local reach is the result of the amount of effort you put in it. If you are willing to step out of your comfort zone, and put time into the methods described above, you’ll be ahead of your competition.

About Me

I am the co-founder of Modern Website Design. I enjoy reading about and writing on issues related to running your own business. To keep with my ramblings, follow me on Twitter.

The idea of freelancing is also appealing to those who would like to make extra money even though they’re already working a dev job.

Regardless of the reason you’re striking out on your own, it’s important that you go about it correctly. Going about things “the right way” can help you look like the person pictured above.

While doing things the “wrong” way can leave you counting pennies.

I’m assuming you would rather look like the former and not the latter. If you have decided to go out on your own, and you are not opposed to prosperity, then this guide will help serve as a road map for how to get your new business running. It will also serve as a guide as to how to manage things once you’re off the ground.

If you’re someone who absorbs information more by reading, like me, then read on. For those who prefer a discussion based format, I’ve prepared this video:

This guide is geared towards those who have already decided to go the freelance/self-employed route. If you’re debating whether you wish to work for yourself, then you may wish to read the first section of my article on making money as a freelance developer.

For those who have already decided that it’s time to strike out on their own, let’s get to it.

This guide, for obvious reasons, is quite long. This road map provides a layout of what we’ll be discussing:

1. Three essential rules for making money as a freelancer (jump to section)

2. Planning your new business (jump to section)

   • Funding your new venture

   • Deciding what niche you’re going to serve

   • Determining what services to offer & pricing

   • Structuring your new business

   • A “to do” list for planning your new business

3. Getting started with your new business (jump to section)

   • The importance of “starting out right”

   • Administrative items to complete

   • Marketing items to complete

   • A “to do” list for getting your business started

4. Finding clients for your new business (jump to section)

   • The need to get clients in the short-term, while focusing on the long-term

   • How to sell yourself to clients

   • Getting clients in the short-term

   • Building a brand for the long-term

   • A “to do” list for getting your marketing started

5. Managing your day-to-day business (jump to section)

   • Administrative & financial management

   • Managing your development/substantive work

   • A “to do” list for making sure you properly manage your business day to day

When reading this guide, just hit a “back to top” link and you’ll be brought back to the road map. So, without further delay:

There are three essential rules for making money has a freelance developer (back to top)

The first step in making money as a freelance developer requires an understanding of how to make money in general. Trying to make money without understanding these fundamental things will go about as well as playing monopoly against an expert without having an understanding of the game’s rules.

The three rules for making money are:

• Understanding that the amount of money (or lack thereof) that you earn will be in direct proportion to the level of value which you provide to others.

• Understanding that making money requires putting time into high value activities.

• Understanding that you have a full-time job as soon as you strike out on your own, regardless of whether you actually have any clients.

Let’s look at each of these in turn.

Developers must understand that making money means providing value to others

Most people starting a business for the first time are used to working traditional jobs. Such jobs often mean getting paid for one’s time. When you go into a job that pays “x” per hour, for example, then you get paid “x” regardless of what you actually produced in that hour.

When you’re providing dev services to a client, however, all the client is going to care about is how much value they receive out of it. If, for example, you’re building a website or app for a small business then what the business is willing to pay is going to depend on the value they expect to receive from the website or app in the future.

The price the customer is willing to pay is not based on the time you put in (as is the case in hourly jobs). Instead it’s based on the increase in value that your customer will receive.

So, to put it bluntly, making money means understanding that your services are about providing value to others and not about putting in time.

It’s also important to understand that value will always be based on the customer’s perceptions and not yours. Too often developers see a website built on one type of framework as “better” than something that looks and functions the same, but is built on another framework.

The bottom line, however, is that if each meets the customer’s needs just as well as the other, then the one which provides the most value to the client is that which costs less.

Think of it like this - suppose a customer can get a website built by someone using a CMS for $2,500. You propose building something with Bootstrap for $3,500. You think yours would be better because you’re using “real code” and not a CMS like WordPress or Joomla.

At the end of the day, however, both websites visually look the same and one does just as good a job of bringing in business as the other. This means that your “better” website didn’t provide more value to the customer, it just cost more. Of course, the customer would not be happy with such an arrangement.

Want to make money? Then start thinking in terms of how you can provide what the customer perceives as value.

Developers must understand that making money means putting time into high value activities

The heading for this section may seem like something you would say “duh” to, but you would be surprised. I see many, many, many, many (many) instances in which small businesses or solo operations are putting time into efforts which really don’t matter very much at the end of the day.

Think of it like this. Many small operations make really good money engaging in activity “x.” They then think that they want to grow their business by beginning to offer service “y” in addition to x. When service y doesn’t work out, they then scrap the idea on move on to service “z.”

This strategy, unfortunately, is a bit insane. If activity x is making money then, instead of spreading resources across activities, just do more of x. In other words, pick your highest value activity and do more of it! This is why Mark Cuban has been quoted as saying that “diversification is for idiots.”

Let’s look at two examples of what I mean by this.

Suppose you can build a relatively simple website, with certain functionality, for small businesses and charge $3,000 for this service. Creating such a site takes you twenty hours (meaning you make $150 per hour of input).

Now suppose you can build larger scale ecommerce products for around $7,500 to $10,000 a pop, but only earn $130 per hour of input due to the projects being more complex.

It’s easy to look at these projects and think the latter is worth more money. The former, however, pays more per unit of input. This means you should be focusing on getting more of those $3,000 projects and try to make such projects your primary business.

To put it simply, identify the projects which pay the most per unit of input and to the extent possible, focus solely on getting as many of those projects as possible.

Freelance developers must understand that they now have a full-time job

I’ve talked to a lot of start-ups and entrepreneurs who don’t understand that they got a full-time job as soon as they struck out on their own. This is true even if they don’t have a single customer. I strongly, strongly, strongly (strongly) believe that this is one of the main reasons why many small businesses fail.

Let’s look at why I say you have a full-time job as soon as you start up.

Suppose Joe Developer starts up his new freelance dev operation. He puts up a website advertising his services and maybe pays for a little bit of advertising. He gets the occasional customer here and there. He completes projects for these customers on a timely basis but never really does much else to grow his business. He probably only puts about twenty hours a week into the operation during the course of the year.

At the end of the year he wonders why his business is stuck in first gear. Joe then shuts down his operation thinking that his phone “didn’t ring enough” from customers and that his advertising was ineffective. Joe blames “bad advertising” for why his business failed.

What Joe failed to understand was that he had a full-time job once he started up. His business failed because he only worked part-time (twenty hours a week) at it.

It’s really quite simple. People don’t get paid for not working. This goes for business owners as well. Once you start up, consider yourself as having a full-time, minimum of forty hours per week, commitment.

What this means is that if your coding and admin work only takes up twenty hours a week, then you are now required to put the other twenty hours a week into hustling up new business. So Joe spent twenty hours a week coding, and should have spent the other twenty hours a week going to networking events or some other marketing activity. If he had put in his time, he would have gotten more business.

Once you start up, just remember one simple rule. You now have a full-time job. To the extent that you don’t have coding projects to put in time on, you are now obligated to spend the rest of your working time trying to hustle up more business.

Do you want to be successful? If so then it’s simple. Understand that you have to provide value to your clients and that you should be focusing on the value providing activities which yield the highest amount of money per unit of input. Finally, put the time into your new business. Those three rules are key to making money in any new enterprise.

Planning your new freelance development business (back to top)

Once you’ve decided to start up it’s then important to plan out your business. I can’t stress enough how crucial this is. Too many entrepreneurs just open up shop and start haphazardly engaging in activities out of the hope that such activities will yield a profit.

Well, no disrespect to such fine folk, but starting a business without a plan is a lot like getting in your car, driving around aimlessly, and acting surprised when you don’t wind up in a place you’d like to be.

So let’s look at what you need to for the “planning” phase of your new venture.

There are several steps involved in getting your new endeavor off of the ground. We’ll look at each of them in turn. These steps include:

• Funding your new operation.

• Deciding what niche you’re going to serve.

• Deciding on the services you will offer, as well as pricing.

• Structuring your business.

Let’s dive in.

Freelance developers will need to fund their new business

After reading the heading to this section, you may be saying “what funding?” This is understandable as most think freelancing requires little more than their laptop.

Well…...wrong. There are going to be expenses associated with your new venture. Especially if you want to…you know...make money. Such expenses can include renting server space, buying liability insurance for the business, fees for professionals (such as attorneys and accountants), and more.

The good news is that it takes very little money to start up in today’s world. The amounts necessary will seem especially small once you start generating some revenue. With all of that said, let’s look at a few rules around funding your initial operations.

The number one rule to remember with your finances is that, contrary to what many people in tech-related businesses think, it is not OK to lose money! This point was driven home really well in the book Profit First, which I strongly suggest reading.

While many small companies are willing to lose money for the sake of growing quickly, I cannot stress enough that this is actually a really bad idea.

The reasons that this is a bad idea would be a) lengthy and b) the subject of another article. The biggest point to take away for now is that you should be profitable on Day One and in each month thereafter.

The easiest way to ensure that you start out profitably, and stay that way, is to remember to avoid debt when you’re starting up as a solo.

Unfortunately, way too many people start a business (of any type, not just coding) and start putting initial expenses on credit cards. They may also take out some type of personal loan to get started.

But ensuring that you are profitable from Day One, and that you stay that way, is simple as long as you avoid debt. Why do I say this? Because if you’re avoiding debt then you can’t spend more than you take in. So, by definition the worst you can do is break even.

Growing your operations then comes from reinvesting your profits. As you make money, reinvest in the business for growth. This leads to greater profits. Keep repeating the process and next thing you know the business is doing really well without ever having borrowed any money.

Freelance developers must decide which niche they are going to serve

There are a few things to address in regards to deciding what niche you’re going to serve. The first is an explanation of why you need a “niche” in the first place. The second is how to go about choosing that niche.

As I’ll explain below, focusing on a particular subset of customers, and not saying “I’ll take whatever walks in the door” leads to higher profits and a more scaleable business. Second, picking that niche is a lot easier than many people think. So let’s have a discussion.

When striking out on your own it’s crucial that you focus on a few particular types/classes of customers instead of trying to be a general purpose coder for every type of business.

The reason for this is simple: if you’re always building different types of products then you put yourself in the role of constantly learning new frameworks and familiarizing yourself with whatever third-party applications the customer may want to integrate into the product.

While I understand that it is fun to learn new things (I like to consider myself a constant learner), this is not the way to run a business.

The reason for this is simple - it’s scale. If you build products for a particular type of company then you will certainly have to learn something new for each customer, but this learning curve will be nowhere as extreme. This leads to greater profits on your end. Let’s look at what I mean.

My primary business tends to focus on building and maintaining websites for law firms, as well as individual app development which allows an attorney’s practice to run more smoothly.

Since many law firms have similar needs I can generally re-use the same code base. Since I charge a flat rate for dev services, I’m collecting my full fee without always having to build a product from the ground up.

If, by contrast, I offered these same types of services to every type of business which existed, I would lose the ability to scale up the use of existing code. Do you want to grow your profits? If the answer is “yes” then find a niche and focus on it.

One other point about choosing a niche is that you wind up providing a much, much, much (much) higher level of service to your customers. Because I have extensive experience in serving a narrow class of companies, I’m able to anticipate their needs and offer solutions they may not otherwise have thought of.

Also, since I’m not completely starting a new codebase all the time, the client does not have to be overly worried about bugs. So, in other words, I am able to provide a better product and better service by focusing on a niche.

Unfortunately, many startup developers decide to take whatever work “comes in the door.” This is very bad for their long-term profits. I just spelled out why serving a niche increases profits. Taking “anything you can find” works in the opposite direction.

First, you may put a lot of time into learning something new only to find that you never use it again after you deploy the customer’s product. Second, all that time that you put into having to learn something new or write a brand new code base could have been put into developing marketing towards your niche.

In other words, people who take whatever they can get are foregoing actual business building to make a few quick bucks. This is the equivalent of stepping over a dollar bill so you can pick up a penny. Never a good idea.

When deciding what type of niche you want to serve, you really only need to ask yourself two questions.

First, is there an area where you can bring unique experience or value that some other developers may not be able to provide? If the answer is “yes,” then you have an opportunity to provide value to your customers.

Second, ask yourself if there is a particular type of work which you would enjoy doing.

If you don’t fit into one of these two types of niches then you’re going to have problems. The reason for this is simple.

First, if you’re not providing unique value then you’re going to grind it out and get frustrated with how difficult it is to run your business.

Second, even if you’re not providing truly unique value, if you’re really passionate about what you’re doing then you’ll be able to persevere the grind.

Picking an area that you’re good at/have specialized knowledge in or picking one that you have a passion for will help you to succeed.

Developers must figure out their services and pricing in order to be successful

Once you’ve carved out the niche you’re going to serve it’s then time to decide what services you will offer, within that niche, and what you’ll be charging for your services.

Your services

Deciding what services to offer may seem like something you can do quickly, but it’s actually important to consider a few different factors in regards to your offerings. Also, when determining pricing it’s important that you consider going the flat fee route for services as opposed to charging by the hour. Let’s dive into each of these issues.

There are three things any freelance developer should consider when deciding what services they wish to offer. Once these three areas are analyzed, if your potential service offering seems to make sense, you consider the size of the current addressable market. They are:

• your level of interest in a given area

• the extent to which you can scale up the offering, and

• your ability to outsource some of the work.

You then look at the market to see if there is enough available work to turn the offering into a business.

I can’t stress enough that your service offerings should focus around things which interest you. Again, as stated in the section above, you’re likely to burn out and quit if you start engaging in activities that you find uninteresting.

By selecting an area that you are generally excited to learn about and work in, you will be able to view your work as something other than drudgery. This leads to you putting in more hours which, in turn, leads to more of dat sick cash flow. So, again, when deciding what services to offer, ask yourself what you’re actually interested in.

It’s also crucial to consider scaleability when deciding what services to offer. The concept of scale is simple. You want to focus on something where your profit margins actually increase, or at least stay the same as you grow your revenue.

Areas in which you can write, and then re-use, a codebase allow you to achieve this.

Areas in which you are constantly doing things from scratch, and spending a lot of time learning things that won’t apply to more than one or a few clients, will take you in the opposite direction. Always ask yourself “can I scale this up” before diving into an area.

The final thing to consider is the extent to which you’ll be able to outsource the work which needs to be performed. The greater the ability to outsource, then the more you can grow the company by leveraging the labor of others.

In our main business, for example, we subcontract the writing of legal content to attorneys and law students who wish to write as a side hustle. Given that there is a large population of people who have the skills to do this work, and are looking for the opportunity to do so, outsourcing our content needs does not prove to be a problem.

Another example of products which outsource well are those which don’t have complicated codebases. The simpler it is to build a product then the easier it will be to hire/subcontract another developer to assist you. This is because you will not need to bring on an individual with as high of a skill set.

So when deciding what services to offer your niche, you’re looking for a scalable area which interests you and in which you can outsource as much of the work as possible.

Once you find this area, it’s time to weigh it against the actual size of the market. If you have a great offering, but there just aren’t enough available customers, then you’re not going to get anywhere for obvious reasons. If, however, there is an abundance of available customers, then have at it.

Let’s look at how the concepts discussed above work in practice. As an example, a company we recently started is focusing on building simple (often single page) websites for small businesses for a low introductory rate.

We greatly enjoy working with small businesses, and given the simple nature of the websites we’ll be building, we’ll be re-using large amounts of code. Also, since the websites won’t require extensive JavaScript development, or much other development beyond HTML and CSS, this is work we can outsource. So this area would be considered viable under the three factor test I just laid out.

We then have to weigh the idea against the size of the market. Well, as I mentioned in my article on whether one should become a freelance developer, roughly thirty percent of America’s 24 million small businesses didn’t have or needed a new website in 2017. This means that there are roughly 7.2 million potential customers out there for the new company we started (30% * 24 million).

This is certainly a large and addressable market. Since our business idea passed the three tests and will address a large market, we went ahead and launched the service offering.

Pricing

It’s time to determine your price structure once you’ve decided what services you’re going to offer your niche. It’s important that, as much as possible, you stick with flat fees for a project as opposed to any type of hourly billing. You also want to try to create recurring revenue. Let’s discuss why these things are true.

To the extent possible, you should work for flat rates and avoid “by the hour” work. This leads to greater profits for a few reasons.

First, as your expertise within your niche expands, you’ll be able to complete work in less time.

Suppose you take on a project for $5,000 and get it launched after 50 hours. This equates to $100 an hour. Now suppose that a similar project comes along a few months later. You charge another $5,000.

The second time, however, you don’t have to spend as much time learning about the domain of the business and you can also re-use some of your previous code base. You get the second project done in only thirty hours.

This means that your “per hour rate” just went from $100 to $166. This value of prior experience and code writing is lost when you elect to charge by the hour.

The fact that you are reusing old code, in the example above, in no way means that your second client is receiving less value. In addition to the product you launch for them, they are also receiving the benefit of your gained expertise in their area. They are also gaining the benefit of your experience in building similar applications. This experience means a smoother launch, fewer bugs, etc. So flat fees are a win-win for everyone.

In addition to working for flat fees, you want to develop offerings which can generate recurring revenue. As an example, the company we started which services small businesses also provides ongoing maintenance after we launch a website. We host the customer’s website on our virtual private server and keep everything up to date for the client. We charge $50 per month for this service and it forms a nice piece of recurring revenue.

By offering services with a recurring revenue stream, you help to make your income more consistent.

So, to wrap up, when deciding your pricing it’s important to remember three words: “flat fee” and “recurring.”

Freelance developers need to choose the right business structure when starting up

It’s time to form your business after you’ve selected a niche and narrowed both your service offerings and pricing.

It is generally suggested that you form an LLC through which to run your business. Doing so provides you with liability protection that you won’t receive if you operate as a sole proprietorship. (Disclaimer: this article can’t be construed as legal advice and I am not holding myself out as a legal professional. I suggest that you discuss your individual situation with an attorney).

Generally speaking, this liability protection can help you in the event of a lawsuit and can also help to prevent you from being personally responsible for business debts if your affairs are structured properly. Also, there are tax benefits, which I briefly discuss below, associated with forming an LLC.

Once your LLC is formed then it is important to remember that you and your company are now considered separate legal entities. This means that you must keep separate bank accounts and that you must not run personal expenses through the business.

For a full breakdown of the legal requirements associated with managing an LLC it is, again, a good idea to speak with an attorney.

There are also multiple tax benefits which you can reap by forming an LLC for your business. The specifics of these benefits should be discussed with a tax professional, as I am not licensed to give tax advice.

But to summarize, the benefits of an LLC include, among other things, being exempted from self-employment taxes in regards to the company’s profits. To ensure that you receive this break you need to fill out IRS form 2553 and “elect” to be treated as an S Corp. You will also need to pay yourself a reasonable salary.

To avoid making this part of this guide too long, I break this idea down, in further detail, in this video:

The tax benefits alone are reason enough to go the LLC route. Add in the liability protections and it becomes a no-brainer.

Action items for developers who are preparing to start a freelance business

I can’t stress enough that it is crucial for you to adequately plan your new venture. I’m a very strong believer that the reason for which many small businesses fail is a lack of adequate planning. If you take the time to “do it right” then you can avoid the fate that many small businesses, unfortunately, arrive at.

Your immediate list of needs should include the following:

• Determine how you are going to fund your new venture

  • AVOID debt or credit cards as a form of funding

  • If necessary, work some type of second job until you have the money needed to get off the ground

• Decide on the niche that your new business is going to serve

  • The niche you wish to serve should be in an area you enjoy and/or are interested in

  • DO NOT get in the habit of taking work simply because it is available - stay in your niche

• Determine what services you will offer to your niche and determine your pricing

  • When determining pricing and services, weigh your ability to scale the service and to outsource work against the size of the addressable market

  • Charge flat fees whenever possible and avoid hourly billing

  • Make sure you have a model which can build recurring revenue

• Form an LLC for your new company

  • Discuss the benefits, and specifics, of doing so with an attorney immediately

  • Discuss your tax situation with a professional and consider making the S Corp election (again, after talking to a tax professional)

Getting started with your new freelance development business(back to top)

Once you’ve planned your new business then it’s officially time to hit the ground running. The first step is making sure you have everything you’re going to need in order to start out effectively.

If you don’t have everything you need then it’s going to be like hitting the ground running with no shoes on. That’s why this section of the article will be devoted to things you need to do right away in order to make sure that you’ve got clients coming in and that you’re operating efficiently.

I’m going to look at several points in this part of our discussion. The topics we’re going to dive into include:

• The importance of getting started off on the right foot

• Administrative items which need to be completed

• Marketing items which need to be completed

• The importance of ongoing learning

So…shall we?

Freelance developers must understand the importance of starting their new business off on the right foot

Before I get into how to hit the ground running, it’s important that we discuss the need to start out well-organized and with all of your ducks in a row. It’s crucial for multiple reasons.

First is the fact that there is no easier time than right now to get organized. Think about it - as you get more customers and get busier, it’s only going to get harder to get things done.

Second, if you don’t have the items discussed below taken care of in advance, then they’re only going to get in the way once you’re trying to run full speed ahead.

In other words, starting out in a disorganized fashion will get in the way of trying to get your substantive work done. This, in turn, will interfere with your ability to do a good job for your clients.

A final, and crucial, reason to get organized now is that not doing so will make you work in an inefficient manner. This inefficiency will stem from the fact that you will constantly be interrupting your work to deal with administrative headaches. This leads to massive inefficiencies throughout your workflow. These inefficiencies will compound on one another and you will suffer from decreased profits as a result.

So, choose to get organized now and not later. This organization includes both your administrative needs and your marketing needs.

Developers must get their administrative affairs in order when starting up

One of the biggest challenges to freelancers who are just starting up is dealing with the various administrative tasks involved with running a business. It’s easy to get in the mindset of “I’ll deal with these tasks later.” Such tasks, after all, can seem boring, confusing, and completely irrelevant to the actual work you’re doing.

Neglecting these items now, however, can create massive problems down the road. A little later this article will discuss how to deal with such things on an ongoing basis. For now, let’s look at the items that you need to deal with from the start.

The first item of business is to make sure you properly form a company. As mentioned above, it will often be the best course of action to form an LLC. The specifics of your situation, however, should always be discussed with a lawyer.

In addition to forming the company, it is important that you get any necessary business licenses and that you complete any other documentation required by your Secretary of State as well as your county level or city level governments. Some states will require more of this documentation than others.

Failing to properly obtain your necessary business licenses, or to obtain other necessary records, can result in you not having the legal right to do business. Make sure you’re properly complying with all requirements in this area.

The second item of business is to get your company its own mailing address. It is generally a good idea that your business have an address other than that of your residence.

First, it allows you to list an address on your website that is not your home. Second, doing so can prevent people from looking up the business on a Secretary of State’s website and getting your home address. Third, having a separate business address helps your company to appear more legitimate.

If you’re just starting out, and have few to no customers, then a post-office box may be your best bet. You can also look into shared working spaces (such as WeWork). Such spaces not only give you a place to work, but you will be provided with a mailing address as well.

The third item on the agenda is to open a bank account for the company. It is crucial that you do not intermingle your personal finances with the business finances. This company account is what you will use to pay for business-related expenses, to reimburse yourself for business expenses which you paid out personally, and to accept payments from customers.

Personally, I would suggest using a large national bank (such as Chase, Wells Fargo, and so on). The reason I suggest this is that the largest banks will be the most likely to integrate with various payment options, to have branches in every state, and so on.

Next up is to sign up for different software services as well as other services that you will need to run your business on a day to day basis.

First on this list is a business suite with which you can set up a branded email address, receive cloud storage for the company, and so on. We use G Suite in our company but here are plenty of other options, such as Office 365.

Next is to sign up for a service offering accounting software (I cannot stress enough the importance of keeping good books). There’s more below about how to keep the books in your business, but for now just know that you need to have accounting software set up from the get go.

For most freelancers I’d suggest trying Wave’s accounting software. I suggest Wave because, while not as robust as Quickbooks Online (which many consider to be the gold standard for accounting software), it is much easier for non-accountants (a.k.a. “you”) to use.

Three other reasons to use Wave are,

• it’s free,

• it’s free, and

• it’s free.

After you’ve signed up for your accounting software you’ll also need to sign up a payment processor so you can accept credit cards and e-checks. Most accounting software options also have an add-on component for payment processing. Personally, I find the option Wave offers to be acceptable and we use it in our company.

While not an exhaustive list, these are some of the services and software offerings which you should sign up for immediately.

It is also critical to have the contracts which you will use with your customers ready from the start. Not having a properly written contract can result in you not getting paid, in you getting paid less than what you thought you had bargained for, or even in you getting sued.

To explain the importance of contracts in some detail, and your options for preparing properly drafted agreements, we are fortunate enough to have this contribution from Cari Ross, an Ohio attorney with Ross Legal Services (the video embedded below is a larger course, but will open directly to the section containing Cari's lecture).

Personally, I would suggest erring on the side of caution and retaining legal representation to review your agreements. Often, you can find an attorney who will review your documents for a one-time fee.

Another thing that I would strongly suggest is that you sign up for professional liability insurance on behalf of your business.

We maintain insurance in our company and it costs us less than $70 per month. If a client were to sue us, claiming that we bungled a product that we built, we would be able to turn the lawsuit over to our insurance company and they would deal with it. Having an insurance policy such as this makes it easier to sleep at night.

The foregoing list shouldn’t be considered as everything you will need to have starting out. These are, however, things which I don’t believe you should consider optional.

Freelance developers should get their marketing infrastructure in place before starting up

Striking out as a freelancer means the opportunity to make money. You are going to need clients to make that money. You need to get your marketing infrastructure set up as soon as possible in order to get those clients.

Let’s go over a list of things which you should get set up from the get go. While some of the items on this list may make you say “duh – I know to set that up,” you’d be surprised at what some people don’t do before getting started.

The first order of business is to build your company website and to include a portfolio of your various projects. A great thing about freeCodeCamp is that you will have built some projects for your coursework even if you don’t have any customers yet.

It’s important to remember that your website is the equivalent of a store front. The level and quality of the work you put into it will go a long way in deciding how seriously your potential customers take you. Your site should highlight work you’ve done, make clear to the layperson what type of work you’re available to do, stress customer service, and make it easy for clients to contact you.

When you're building your website, it's important to consider your audience. All of us (including me) can be guilty of forgetting that most of our customers really don’t care about code or technology. They just want a solution to their problems.

A customer likely doesn’t know what HTML is and they don’t care if you're using Bootstrap, Flexbox, or some other framework to build a responsive page.

If you want people to become your customer then don’t alienate them by talking like a tech head on your website. Instead, present yourself as a problem solver that is ready to assist them.

The next crucial point is to have a branded email. You can take care of this by signing up for a business software suite, which I suggested above. Having a company email is important because you want your customers to take you seriously. And trust me that they won’t take you seriously if your email address is “name@gmail.com”. You might as well be using “brand_new_coder@gmail.com” if that’s the case. Get a branded email.

Another important item to get is a dedicated phone number for your business. There are a variety of reasons why you don’t want business calls going to your personal cell phone. These include the fact that clients will then have your personal number, you’ll be putting your personal number on your website, and you’ll have to answer personal calls with a professional sounding greeting (since you won’t know if it’s a potential customer calling).

The best way to deal with the separate number issue is to sign up for Google Voice - which is included with any free Google account. This allows you to add a second VOIP number to your cell phone. You’ll be able to receive calls, make calls, and text from this number. And again, the beautiful part is that it’s free.

If, for some reason, you don’t want to use Google Voice or some other VOIP, you can always get a second cell phone. If you go the second cell phone route, make sure it is signed up under your LLC so that the monthly bill is deductible on your taxes.

A key, key, key, key (key) part to your marketing is going to be to sign up profiles on which clients can leave you positive online reviews. These include your profile on Google My Business, a business page on Facebook, and a Yelp profile for the business.

Many people, even those referred to you, will want to look at your online reviews prior to deciding to hire you. Failing to have a bank of reviews is going to cost you money, and a lot of it. I’ll be speaking more below about how you can actually go about getting those reviews. For this part of this guide, just be aware that you need to sign up and fully fill out these various online profiles.

Another important step is to make sure that your LinkedIn profile is as complete as possible. Make sure your profile makes clear that you are available for freelance work. You’ll want to include your various projects in your profile and make sure you list your various skills.

Also, I’d strongly suggest taking the various LinkedIn tests to gain their coding certifications. These tests only take a few minutes and, for example, your profile can indicate that you are actually certified by LinkedIn in HTML, CSS, Javascript, and so on. These certifications will go a long way towards prompting others to contact you for work.

These are simply some initial “must haves” that you need to get taken care of immediately. I’ll be discussing, in depth, how to actually get clients as you move further through this guide. For now, just be aware that you should have the above items before you dive into the world of trying to hustle up your next project.

Freelance developers must decide to be continuous learners in order to succeed

Yep, perhaps you’ve just learned to code. But before you even get that first customer you should've already decided that you’re going to continue learning about a variety of topics.

In truth, coding only makes up a part of your business. And unless you decide to continuously improve your skills in a variety of other areas, you’re going to have problems. The areas about which you should be learning on an ongoing basis include:

• communication/soft skills

• personal and business finance

• business history (in order to learn from the successes and mistakes of past entrepreneurs)

• and more.

It’s important to remember that completing freeCodeCamp, and learning to code, is the beginning of a new chapter and not the end of an old one. If you want to succeed, get in the habit of lifelong learning before you even get your first customer. If you don’t want to succeed then, don’t worry, you never have to pick up another book again.

My suggestion would be to set aside some time every morning during which yo improve yourself through learning.

Personally (and this is just what I do), I read for forty-five minutes each morning. My daily routine consists of “wake up,” “eat a quick breakfast,” and then “open a book” for forty-five minutes. Again, this is what works for me.

Some initial readings I suggest include:

• Profit First

• How to win friends and influence people

• The Millionaire Next Door

• Small Time Operator: How to Start Your Own Business, Keep Your Books, Pay Your Taxes, and Stay Out of Trouble

• The Innovators

• The Everything Store

These are just my suggestions. I will say though, that each of these books went a long way in changing my outlook and making me better at business. One of the most common habits among super-successful people is continuous learning - so get to it.

Action items for freelance developers who have just started their own business

Again, it’s important that you have all your ducks in a row before you start taking clients. That’s why I’ve put together this list of “to do” items that should be completed after you’ve formed your business and are preparing to start taking customers.

Your “to do” list for this section includes the following:

• Administrative

  • Research the local business and licensing requirements for your new company and make sure you follow these requirements

  • Establish a separate address (such as a PO box) for your business

  • Open a separate bank account for your business

  • Sign up for “administrative software” that you will need

    • A business suite

    • Accounting software

    • Credit card processing

    • A payroll service

  • Develop/obtain the contracts you will have potential customers sign

  • Sign up for professional liability insurance

• Marketing

  • Build out your website and online portfolio

  • Establish a branded email

  • Establish a dedicated phone number for your business

  • Sign up the profiles necessary for your business to receive online reviews (Google My Business, Yelp, etc.)

  • Build out your LinkedIn profile

• Continuing Education

  • Make a plan to become a lifelong learner

  • Execute on the plan to become a lifelong learner

Freelance developers need to start finding clients after their business is organized, up, and running (back to top)

Once your business is planned, formed, and your initial “to do” list is taken care of, there’s something you will need: customers*.* Hustling up business is going to be crucial for anyone just starting out.

Like anything else there’s a right way and a wrong way to go about getting business. I fully recognize that you will need clients now, in the short term, while you are building your new empire.

It is vital, however, that you don’t make the mistake of focusing only on getting clients in the short term and, as a result, don’t do the things needed to build a venture that is sustainable for the long-term.

In this section of our guide we’ll be discussing the following:

• The importance of building your long term business while still getting clients in the short term

• How to sell yourself to your clients

• Sources of business for the short term

• How to build your company over the long term

• A list of action items to get rolling with immediately

With that said - on to the next section!

Freelance developers must get business in the short term while focusing on their long-term business

Before we get into how to get clients for your new business, it’s important to discuss your strategies over both the short and long term.

In the short term you will be working to hustle up work, to make a few bucks today, while over the long term you’re going to build a brand. The value of having a brand is that you will be able to get more work, with less effort, and will often be able to charge higher prices.

Unfortunately, too many developers get caught in a trap. This trap involves developers putting all of their time and resources into getting clients today in the short term. These developers can never rest easy and know that they’ll have a steady flow of business and, quite often, spend many years working at reduced rates.

By building your brand over the long term you’ll be able to avoid this trap while still making money in the meantime.

The difference between a short term hustle and a durable brand is simple. Short term hustles involve you spending quite a bit of time and money convincing others to let you do work for them. Again, this work will often be at a reduced or mediocre rate.

Having a brand means that people will seek you out, as opposed to the other way around, and you can then charge higher rates. The latter is a path to success while the former will make you feel like you’re stuck on a hamster wheel.

Now let’s figure out how you can avoid getting stuck like this. We’ll start by looking at how you’ll get clients today and then move on to building your brand.

The first part of getting clients today is learning how to sell yourself to potential customers.

Developers can sell themselves to clients by playing the role of a problem solver

It’s impossible to succeed as a freelance developer unless you’re able to effectively sell your services to clients. A big problem for most freelancers, however, is that they don’t go about selling their services in the right way.

This is often because, as developers, we tend to think that we are selling code and products to clients. The fact of the matter, however, is that we are selling solutions to clients' problems. When we see ourselves as “developers,” instead of “problem solvers,” we tend to fail to effectively communicate our value to a client.

The truth, at the end of the day, is that a client won’t hire someone if they don’t see value in the services being provided. By presenting ourselves as solving our clients' problems, we can show how much value we are providing and, in turn, the client will want to hire us.

Consider the following example. Suppose your are called by a local pizza shop that wants to develop a new website. They want to implement online ordering, and they also want to develop a mobile app so that people can order food while on the go.

You go to the pizza shop and explain which language you will build the app in and start speaking technical mumbo jumbo which the shop owner probably doesn’t understand.

After your presentation, the shop owner won’t understand the difference between what you’re going to build and what someone else can build, for less money, in a CMS such as WordPress. They are simply left with your word that your product is “better” without any understanding as to why.

This shop owner is not likely to hire you because all they want, at the end of the day, is something that meets their needs.

Now suppose that you go to the pizza shop and have a conversation with the owner in which you take the time to understand their needs and goals. You then show them how the website and app you are going to build can meet those goals. You’re doing this while using little to no technical jargon.

You then explain, in layman’s terms, why the person using a CMS won’t meet those goals (for example - you may specifically explain how limited the CMS’ functionality will be when translated into an app).

Now you’ve spoken to the owner in their language and they see value in the service you’re providing. They are now more likely to hire you because you spoke to their needs, through the lens of a problem solver, without using “tech head” speak.

Do you want to close more sales with clients? If so, then it’s simple. Present yourself as a “problem solver” and don’t speak code. Once you start freelancing, you need to stop seeing yourself as a developer and, instead, recognize that your purpose is to solve a client’s problem in the most efficient way possible.

Now that you know how to sell your services to clients, let’s look at how to go about getting business over the short term.

There are several ways for freelance developers to get immediate business

There are several ways to get clients in the short-term. As you will see in the following discussion, these methods do not involve spending large sums of money (or any money for that matter). Let’s take a look at how you can immediately get clients through the following types of resources:

• Leveraging of your existing contacts

• Services such as Upwork and Thumbtack

• Services such as Fiverr

• Free advertising through Craigslist

• Networking groups, such as BNI

Let’s dive into the pros and cons of each of these.

A good place to start getting clients is by simply leveraging your friends and contacts. What I AM NOT saying is for you to simply start telling everyone you know that you are now a freelance coder and you want to build them a project.

Instead you take the approach of telling various individuals that you are embarking on this venture and that you just wanted to let them know of your availability in case they come across anyone who needs your services. Also, make sure that you give them some of your business cards. I wouldn’t suggest bringing it up again after these initial mentions - then you’re just annoying your friends and acquaintances.

I’ll give a personal example of how powerful it can be to simply reach out to your circles.

I recently spun up a separate business which will assist small to medium sized businesses/entities with basic web design. First, I mentioned to one friend that I was starting this service, in the “fyi” fashion I described above. The friend became excited and quickly told me that her mom had founded a church (something I didn’t know) and the church needed a new site designed.

Second, I mentioned that I would be starting the new business to my next door neighbor (who is self employed) and that I would drop him off some business cards just in case he came across any entrepreneurs who needed help. His wife quickly mentioned to me that the parent-teacher organization at the school their child attends wanted to build a new website.

So, two conversations wound up yielding $6,000 worth of work for what are actually very simple projects. And these were just the first two conversations I had. You get the point. So, making your availability known to your immediate circles can be a great way to get started.

The next step is to sign up for services such as Upwork and Thumbtack. These are platforms on which consumers can state what services they need and ask for proposals. You will typically pay for the ability to submit a proposal and these jobs will often be for lower amounts than what you would normally charge.

Is this perfect? Nope. Is it good for someone just getting started? Yep, and especially so when the alternative is to sit around and twiddle your thumbs.

There are a few things to make sure of when signing up for these types of services. First, you need to make sure that you fill out your profile as robustly as possible. Include introductory videos for yourself and your services if the platform allows them.

Also, as you complete projects it is important to ask clients for reviews if you are sure that they will leave you good feedback. As you build up a bank of reviews, you’ll be able to bid on higher priced jobs available through these services.

While these types of services aren’t a good way to get rich, they are a good way to start building up a portfolio of work while getting paid for doing so.

The next option is to set yourself up as a service provider through a company such as Fiverr. If you are unfamiliar with Fiverr, it is a website that essentially allows you to set up a store front and provide services in different categories. The available categories include web and software development.

As with Upwork and Thumbtack, you’ll typically be providing services for a good amount less than your normal “going rate.” With that said, Fiverr simply brings the customers to you and you pay a portion of your fee to the service. You are not paying up front for the leads.

Personally, I prefer this approach over services like Upwork. This is because you are not paying for leads and, perhaps more importantly, you are not putting time into submitting proposals for work that you may or may not get.

As with the other services discussed above, it's important to do a good job for your customers, to provide quality service, and to get good reviews. This will allow you to charge more over time. Again, while not a long term solution, this is a good option for getting started.

Another option that you’ll want to take advantage of is advertising on Craigslist. For reasons which go beyond my understanding, this remains a highly under-utilized option. You can advertise your services on Craigslist at the cost of $5 per post and a post will last up to 30 days.

Depending on how many people are using Craigslist in your area, one post may still be visible, without being pushed to the bottom, for the entire month. In other areas, it may be necessary to post once a day or so.

When creating a Craigslist ad, I’d strongly suggest that you do a few things. First, create a graphic to insert into the post. This should include your name, the services you provide, contact information, and so on. The standard size for a Craigslist graphic is 600 x 450 pixels. Also, you can use a limited amount of HTML when writing the text of your advertisement. So make it look nice.

Right now you may be thinking “Craigslist?” My answer to this is “yep!” People always look at me oddly when I tell them that this is an under-utilized option. Over the years I’ve suggested to various businesses (including attorneys, realtors, and others) that they advertise on the service. The same naysayers are then surprised at the fact that they actually make money doing so. These won’t be high end clients (you’ll typically only be doing very basic web design). But, again, it’s revenue to help you get started.

A final option for those starting out (and an important one at that) is to join a networking group through your local BNI chapter. BNI (short for “Business Networking International”) is a worldwide networking group which focuses on helping entrepreneurs grow their businesses through effective networking (I stress the effective part). I’ll be writing an article in the future on how to network the “right way” (spoiler alert).

In short, BNI is a way to have other business owners refer you business whenever the opportunity arises in exchange for you doing the same. It also allows you to meet entrepreneurs with whom you can form a business synergy.

If, for example, you want to build websites and apps for small businesses then you will likely need a photographer to help companies produce proper photographs of their products. Your local BNI chapter may include a photographer to whom you can refer business. That photographer, in turn, may refer you business whenever they do work for a company which mentions wanting to improve their web presence.

Don’t underestimate the power of networking, when it’s done correctly. BNI really does give you the opportunity to “level up” your networking efforts.

One of the downsides of the networking route is that it can be quite time-consuming. Also, if a referral source ever decides to get out of the game, then you lose your flow of business.

These are just some of the reasons why you can make a few bucks in the beginning through networking, as well as the other methods discussed above, but it remains important to build your brand and long-term business. Let’s talk about how to do so.

Freelance developers must build their brand and company over the long-term

It’s one thing to put time and effort into your business and to get a few bucks back in return. The real power of working for yourself, however, comes from building a brand and an actual company. You will then be able to charge higher rates and customers will seek you out, as opposed to you having to find them.

I’m assuming that you find this type of look acceptable. In order to get there, you need to build something enduring. There are several aspects to and options for doing so. Let’s take a look at the following:

• Why repeat customers, and referrals from former customers, will always be your most important source of business

• The importance of online reviews

• Leveraging a blog

• Leveraging YouTube

Let’s dive into each of these, shall we?

The first point, which I cannot stress enough, is that you have to provide your customers with both high quality service and a high quality product. This makes them want to use you again in the future and, importantly, turns them into a referral source.

Why is this so important? Simple - you can’t succeed otherwise. Think of it like this: Your marketing efforts lead to a phone call from Joe the baker. Joe has you build a basic $2,500 website for his bakery. You do a good job for Joe.

Six months later he refers you his friend, Bob the restaurant owner, who pays another $2,500 for a restaurant website. Then you do a great job for Bob and he later refers you someone.

Do you see what just happened? Your marketing only led to one phone call from Joe, yet that one phone call indirectly turned into two additional phone calls.

The above example relates to a crucial point. You’re not going to make it if you have to generate a marketing related phone call for every eventual customer. Doing so is resource intensive and kills your profit margins (if you’re able to stay in business at all).

If Freelancer “A” earns 10x the revenue of Freelancer “B”, it’s not because A’s marketing yields 10x as many calls. It’s because, while they do get more calls, they make sure that one phone call yields more than one customer.

This is how you grow your business exponentially. Conversely, if growing your revenue by 10x requires you upping your marketing by 10x then…….good luck with that.

So how do you make sure that you’re earning repeat business and referrals?

First, deliver a quality product in the time frame that you promise and DO NOT make excuses.

Second, be timely in responding to phone calls, emails, and other customer communications. Be courteous and simply treat your customer the way you would want to be treated.

In short - provide good service. While this may sound like something that makes you go “duh,” you’d be surprised at how many developers fail in this area.

Another important part of building a brand/enduring business is to consistently get good online reviews from your customers. Even if you're dealing with customers from a wide range of geographical areas, it’s vital that you have a bank of reviews with which potential customers can evaluate whether they want to hire you.

You can also refer potential customers to these reviews for their consideration. The reason I’m stressing this is that good reviews mean that your marketing won’t need to generate as many phone calls for your to make money. Let’s use a hypothetical to explain why this is.

Suppose that every $1,000 devoted to marketing, by Joe Developer, generates two paying customers. Now suppose that each of these customers pays Joe an average of $3,000. This means Joe nets $5,000 for the first $1,000 in marketing [($3k * 2 customers) - $1k of marketing expenses].

Now suppose Joe wants to double his business. He spends $2,000 on marketing this month and nets a total of $10,000 after expenses. This sounds fine and good until you consider the epic story of Jill Developer.

Jill Developer regularly gets good online reviews from customers while Joe doesn’t think that such reviews are important. As a result, people who find Jill online, or via referral, are more likely to hire her. As a result, Jill gets three clients for every $1,000 in marketing as opposed to Joe’s two clients.

So, Jill’s first three clients yield a net profit of $8,000 [($3k * 3 customers) - $1k of marketing expenses). This is sixty percent higher than what Joe gets for his first $1,000 in marketing spend. When Jill doubles her marketing budget, her $8,000 in profit jumps to $16,000.

Do you see how the gap in income is going to continue to grow between her and Joe, even though they are increasing their marketing budgets by the same amount? Getting good online reviews turns more of your marketing dollars into actual revenue. Neglecting the accumulation of reviews will leave you spinning your wheels.

There are a few tips to follow when it comes to reaching out to your customers for good reviews. First, while it may sound obvious, don’t ask for a review unless you’re sure the customer will actually leave a good one (you’d be surprised what some people do).

Second, it’s important to get the reviews on websites which people actually visit (Yelp, Google, Facebook, and so on).

Third, don’t just ask customers to leave you reviews. Simply asking will result in a very low percentage of your clients actually doing so.

Instead, once you’ve completed the project, call your client and thank them for their business. Then make sure they know that if they ever need anything they can give you a call. Ask if there was anything you could have done to improve your services and, if they are happy, ask if they will leave you an online review. Once they say “yes,” thank them and let them know that you will send them an email with review links. That email should look something like this:

Dear [name of customer],

Thank you for allowing us to assist you. As I mentioned, I’m including a few links for online reviews. We greatly appreciate you taking the time to say a few kind words. The links below will take you directly to our review profiles:

• Google

• Yelp

• Facebook

If we can ever be of assistance, please don’t hesitate to contact us.

Thanks again,
[Your name]

The links to your review profiles should go straight to the review section and not the general page. You’ll find that this approach will lead to many more customers who say they are going to leave you a review, actually doing it.

Another tool for building a lasting brand is to develop a blog which speaks to the needs of your customers. This has been a key to our primary business which deals with providing solutions for law firms.

The key to developing a successful blog is to provide information that is, again, useful to your customers and not simply that which you want to write about.

Why do I stress this? Simple: one of the most common blogging mistakes I see is people taking the approach of “I’m going to write on the things I want to write about” as opposed to writing on the topics about which their potential customers are seeking information. Let me give you two examples of what I mean.

I wrote an article on how law firms can use Evernote as a tool for reducing clutter in their office. Over time, my analytics showed that article consistently receiving traffic. Since the article was popular, I wrote a comprehensive series of articles on how law firms can leverage Evernote to make their offices more efficient. Each of the articles in that series went on to generate significant traffic for our website.

Conversely, I also wrote a series of articles on how law firms could improve their cyber security (you would think this would be a big deal to those who handle sensitive information). The thing was, however, that our analytics showed those articles were receiving little to no traffic. In other words, our potential customers simply weren’t looking for the information (maybe that’s why law firm cybersecurity is so bad - but that’s a rant for a later time).

The moral of the story is this - monitor your analytics and write more on the topics that are proving to be popular and stop writing on the topics that are not popular. You’ll be surprised how many potential customers pick up the phone and call you as a result of you providing useful information.

As with a blog, it is also a good step to start a YouTube channel. The steps for integrating YouTube into your brand building are very similar to those involved in building a blog. This means that you should leverage your analytics and do videos on the topics your customers show interest in. Do not devote energy to topics which your customers are clearly not interested in.

Also, it’s important to actually put some effort into your YouTube videos. Do a few takes so you are putting out a quality product. Make sure you have adequate lighting, use a microphone, and do some basic video editing at a minimum (there are a ton of free/low cost and easy to use editors out there).

The one thing I’ll add on YouTube is that it’s natural to be nervous and apprehensive about doing video. Just remember this: the biggest YouTubers didn’t start out big. If you look at their early videos you’ll see a big difference in quality from where they started and where they are today. Everyone has to start somewhere, after all.

The big thing to remember, as we close out this section, is that you can make a few bucks with short-term strategies. Building a brand, however, will give you something which no one can take away and will lead to a far more lucrative business.

Action items for freelance developers who are ready to start bringing in business

The foregoing discussion provided information about how you can bring in business in both the short and long-term. It also discussed the importance of brand building so that you can increase your profits.

The following is a “to do” list which will help you get a stream of customers a flowin’:

• Start to think of yourself as a “problem solver” and not a developer

  • Remember that your customers don’t care about code or technology. They only care about getting their needs met.

  • Begin brainstorming the potential issues that your customers face, and how you can discuss a solution to those issues in ways that your customers will understand.

  • Work on your “active listening” skills so that you can “hear” the needs and concerns which your potential customers are conveying.

• Begin the process of “short-term” business building so you have immediate revenue

  • Make everyone you know aware that you are starting up. The goal of these conversations is not to sell your services to your current circles. Instead, it is to turn your current circles into referral sources.

  • Complete a robust LinkedIn profile. Your profile should make clear that you are a freelance developer accepting work.

  • Create robust profiles for yourself on services such as Upwork and Thumbtack. Consider bidding for jobs through these services.

  • Make your services available through Fiverr and begin advertising on Craigslist as well.

  • Join BNI or other similar networking groups.

• Begin the process of long-term brand building

  • Create profiles for your business on Google My Business, Yelp, and Facebook. Begin getting client reviews on these websites and make the acquisition of reviews an ongoing process.

  • Develop a blog which speaks to the needs of your customers. Leverage your analytics over time to ensure that you are writing on topics which interest your customers.

  • Develop a YouTube channel which also speaks to the needs of your customers. As with a blog, leverage your analytics to ensure that you’re doing videos on the correct topics. Make sure you put some effort into your video production. This includes considering your scripting, lighting, sound quality, etc.

Freelance developers must develop systems to manage their business on a day-to-day basis (back to top)

Once you have customers coming in the door then it is vital to ensure that you properly manage your business on a day-to-day basis. Failing to do so will lead to inefficiencies and wasted time. This leads to two horrible things - decreased profits and unhappy customers.

Assuming you want to avoid these things, it’s important that you embrace your new role of business manager in addition to that of being a developer. When managing your business, you should focus on the administrative side of things as well as on the substantive work to be done. Failing to do so will lead to administrative problems which will pop up at bad times. These problems will then get in the way of your substantive work.

So, while administrative tasks may seem boring, it is vital that you give them the attention they deserve.

Too many freelance developers get into the mindset of thinking “I’m a developer, not a businessperson.” Well, if you take this mindset once you start freelancing then you won't have to worry about being a businessperson. Because you’ll go out of business so fast that the problem will simply take care of itself.

If you want to avoid this fate then focus on running all aspects of your business correctly.

This section is going to focus on the following areas when it comes to running your operation:

• Managing your business’s administrative and financial affairs.

• Managing your substantive development work in an efficient and profitable manner.

• An action list meant to help you develop procedures for keeping your business running.

Again, I can’t stress enough the importance of seeing yourself as a “businessperson” and understanding that your business is now development. Think of it this way - if a chef starts a restaurant and makes themselves head cook, they are now a restaurateur and not a “chef.” The same is true for your new business. Now let’s get to it.

Freelance developers must focus on their business’ administrative and financial management

The reason why I’m discussing the management of your administrative affairs before the management of substantive work is simple - this is the area where most freelancers get themselves into trouble.

Neglecting your administrative affairs leads to problems which have to be dealt with immediately. This means having to drop whatever current development task you're working on, telling a customer that there is going to be a delay, and putting out an unnecessary fire.

A simple example, which I’ve seen more than once, is the small business owner who never does their bookkeeping. At the end of the year, those books must be done so that the business can file its tax return. The business’ return must be filed so that the developer can file their individual returns.

Once tax filing deadlines are getting close, the small business owner has to drop everything, run around like crazy, and blow off their substantive work in order to get twelve months worth of bookkeeping figured out.

All of this could have been avoided by spending a small amount of time each week simply doing the books. Such weekly bookkeeping could have been handled in an orderly fashion, planned as part of a workflow, and handled in a way which did not disrupt the business.

The first step in managing your freelance business’ administrative affairs is to develop a monthly budget for the company as well as financial restraints.

Far, far, far, far (far) too many small business owners utilize “bank balance budgeting.” By this I mean that they simply look at their bank balance and they assume that having “X” in the bank means that they have “X” at their disposal. Gee, with an approach like that I can’t imagine why so many people have financial problems.

The crucial first step for your new venture is to set up a financial system. How to do so would be a very lengthy guide in and of itself. So, for the purposes of this guide, I strongly suggest that you read the book Profit First and implement its suggested systems. While there are certainly other possible approaches, I think this book gives a solid framework which will help those who struggle with financial management.

A key thing to remember when running a business is that your company’s bank accounts are not your personal account. You do not get to simply raid the business funds anytime you like.

An issue which I see far too often is when a business owner takes excessive withdrawals from their business account for personal purposes. The business then finds itself short on cash when bills are due and, to make up for this shortfall, the business owner then takes work at a reduced price to generate immediate cash. This reduced price work means there is still not much money in the business account and the owner has a hard time getting their personal bills paid.

This begins a difficult cycle which can be hard to break. By practicing financial restraint, you can avoid this trap.

The next critical point is that you regularly perform your accounting and understand your business’ books. I never understand the small business owners who don’t do their books regularly. Such business owners, as a result of not doing their bookkeeping, never actually know how much money they’re making. This can lead to a belief that you’re doing better or worse than you actually are.

To put it simply, if you’re not going to be regular about doing your books then don’t go into business for yourself.

How to do your books could easily be a course in and of itself. Fortunately, Erin Lehr of KPI Bookkeeping was willing to put together a group of instructional videos meant to get you started when it comes to keeping your books. She also put the slides from her presentation together into two separate documents. You may download her slides on money management here and her sample chart of accounts here.

Again, the following videos are introductory only (Erin's videos are embedded into a larger course, this link will open directly to her section of the video):

Again, and not to beat a dead horse, but it’s crucial that you handle your books regularly. If you need assistance then contact a bookkeeper such as Erin. Don’t neglect this chore.

One last point I’ll make, regarding managing your finances, is that you need to understand the difference between not having any business and not having any money.

I’ve consulted for way too many small businesses who call me freaking out because they have no money in the bank. The freaking out entrepreneur, however, starts these conversations by saying that business is dead. In other words, they assume that the fact that they’re broke is due to business being slow.

Upon talking to such people, however, it turns out that they actually have quite a bit of business. It’s just that they spent the money as fast as it came in, usually on indulgences (including large indulgences such as high end cars).

“Not having any business” would mean that you’re twiddling your thumbs and that you have nothing to be working on. If you’ve got a mountain of work to do, and no money, then it’s probably a sign that you need to practice better financial restraint.

It is vital that you manage your administrative tasks as well as affairs involving your finances. Administrative tasks include timely filing of any necessary documents with the Secretary of State, keeping your business licenses up to date, and so on.

Not keeping these affairs in order could be devastating. You don’t want to be sitting there, in the middle of a coding project, only to find out that you’ve lost your legal right to do business for the time being, all because you didn’t file a piece of paper with a regulatory entity. Know your licensing and regulatory requirements and, if necessary, hire an attorney to help you with these matters.

Freelancers must manage their development in an efficient manner

A freelance developer’s “substantive” work consists of the tasks which they are actually paid to perform. In other words - development work.

If you’ve come this far into this guide then I think it’s fair to assume you’re interested in making money. Assuming that you are on a quest for prosperity, and that you haven’t read this article because there was nothing interesting at the public library, we’ll devote this section to making your substantive work as profitable as possible.

As mentioned above, the key is to identify your high value activities and to ensure that such activities receive a serious and efficient time commitment on your end.

To help you get there, this section will discuss the need to focus on the right tasks, how to make sure you’re putting in the right amount of time, and tips for making sure that you’re using that time efficiently. If you focus on these things, then you’re likely to make more money. If you don’t…then you’re not.

The most important part of getting rich is making sure that you’re focusing your time into higher value activities. This concept is pretty simple: identify the tasks which yield the best results and do more of those tasks!

While that sentence may leave you going “duh,” you’d be surprised at how many entrepreneurs fail to recognize this concept. Let’s look at some specific examples, both in terms of your substantive work and your marketing activities.

Suppose you develop what you consider to be a typical small business website for $3,000. The site includes multiple pages, lots of media, and extra functionality (such as online ordering for a restaurant).

Now say that such a project typically takes you about twenty hours to complete. This means that this type of work yields you $150 per hour ($3k/20 hours).

Now suppose that you can drum up work building one-page “starter websites” for small businesses for $500 a pop. You can typically handle such projects in two hours (given that you’ll likely develop a number of templates to work from). This means these “starter” sites can be completed at a rate of $250 per hour ($500/2 hours).

While the latter may pay less in total than the former, it actually pays more per unit of input. A developer who actually wants to make money would focus on doing more “starter” sites and less on the larger projects I mentioned.

While the math I just laid out may seem obvious, you would be shocked at how many developers (and small business owners for that matter) fail to focus on the work which yields the most per unit of input. This can be due to not keeping track of the inputs (i.e. not tracking how much time you’re putting into something) or simply focusing on the price tag as opposed to the hourly profit.

Whatever the reason, those who fail to identify their most profitable activities, and focus on them, are making a big mistake.

Mark Cuban is on record as saying that diversification is “for idiots” and Warren Buffett is on record as referring to diversification as “madness.”

This is also true when it comes to the activities you are engaging in as a freelancer. If you identify an activity as being more profitable than any others then it makes NO sense to engage in other activities. Instead, you should be trying to drum up as much of that profitable activity as possible.

This is true in terms of your substantive work, your marketing activities, and pretty much anything else. In short - focus on high value activities.

Once you identify your high value activities then it is vital that you put a lot of time into them. Think about how much you need to work should as a function of efficiency and time (a few speeches from Elon Musk really opened my eyes to this).

Consider it in these terms: Jill and Joe perform similar tasks as freelance developers. Jill, however, works twenty-five percent more efficiently than Joe, meaning that Jill can get twenty-five percent more done in an hour.

You might think that Jill is going to make more money than Joe, right? The problem, however, is that Jill only works thirty hours a week and thinks her increased efficiency makes up for any lost time. Joe, by contrast, works forty hours every week. At the end of the week, Jill’s thirty hours of work will produce the same amount that Joe would produce in 37.5 hours (30 hours worked by Jill * 1.25 of Joe’s efficiency).

Since Joe works forty hours each week, he’s going to get more done than Jill. Since Joe produces more than Jill, due to his better work ethic, he will make more as a freelance developer. If Jill had just worked forty hours, like Joe, then one week would yield an amount of production that would have taken Joe fifty hours (40 hours * 1.25 Joe’s production = 50).

What you can take from the epic story of Jill and Joe is that you have to put in the hours while working as efficiently as possible.

The foregoing concept is why I put a minimum of 43.3 hours into my business each week. My hourly requirement of 43.3 hours is based on a simple formula: if I’m working at the same level of efficiency as some hypothetical person, and that individual only works forty hours a week, then by putting in 3.3 extra hours per week I add one working month to my year.

In other words, someone working at the same level of efficiency as myself, who is only putting in forty hours a week, will take thirteen months to equal the level of production I reach in twelve months.

It’s important to stress that the average of 43.3 hours a week is a minimum that I put in. If there is additional work which must get done due to some type of deadline, then I put in extra time. Any extra time that I put in can then be taken off from a later week.

When working efficiently, however, it isn’t too often that I have to go over my 43.3 hours. By adding an extra working month to my year, using this method, I feel my production greatly increases.

The point of putting in your hours is so important that I’m going to rant about it for just another moment. An overhyped belief is that it is important to work “smarter not harder.” To this idea I say WRONG.

It is, instead, important to work smart and hard. I deal with plenty of self-employed individuals who put in many of hours and manage to get nothing done. This is because they work in an extremely inefficient manner. You can put in sixty hours a week, but if you’re only working at fifty percent efficiency, then the average Joe will equal your production in just thirty hours a week.

At the same time, the math shown above in the hypothetical about Jill and Joe shows that you do need to put in the time. This is why the amount you produce, which largely dictates how much you make, is a function of both working efficiently and putting in the time. There can be no compromise on either.

Here’s an important tip, which I cannot stress enough, for working as efficiently as possible: always assume that you’re operating inefficiently.

I work with way, way, way (way) too many people that are convinced that they are operating in an efficient manner. After going through how they do things, however, it quickly becomes obvious that improvements can be made.

My approach to my business is to assume that I am inefficient and to be in a constant state of trying to do things better. Remember that no matter how well you think you are doing, there is always room to do better.

Now that we’ve gone over the importance of identifying high value activities and putting time into them, let’s give some specifics on how you can run your business more efficiently.

Again, it’s vital that you streamline your operations. It’s too easy, after all, to work all day, not get anything done, and then go home feeling like you’ve actually accomplished something simply because you put in time.

The tips below (which by no means should be considered an exhaustive list) will help you eliminate “noise” which causes unnecessary distractions, eliminate unnecessary work, and avoid self-inflicted extra tasks. Let’s get to it.

How to work more efficiently:

The first step for working efficiently is to develop the Only Handle It Once (O.H.I.O.) method. This is a straightforward time-saving idea which too many entrepreneurs fail at.

The idea is simple. Do not deal with an item unless you are prepared to take action on it at the time you deal with it. Consider how often the following occurs. Joe receives an email from a customer. He skims it and says to himself “I’ll deal with this later.” When “later” comes, Joe then has to read the email a second time before dealing with it. In other words, Joe to take the time to read the email twice instead of just reading it once and dealing with it.

Now multiply the wasted time of one extra reading by every email received in the course of a year. The time lost quickly becomes mind-boggling. Instead of making this mistake, Joe should not even open the email until he is prepared to deal with it. This will save him the time of a second reading.

The O.H.I.O. method can be applied to a number of different contexts. Imagine every piece of administrative paperwork you receive (notices from the Secretary of State, forms you have to fill out, and so on). As with the email example above, it’s easy to look at such a document and put it off to the side for later handling. Again, when the task is completed this means you will have reviewed the document twice.

The idea of Only Handle It Once means just what it says - do not open an email, pick up a piece of paper, or start a task unless you are prepared to actually deal with it. The time savings that come out of this method can be extreme.

The next step for working more efficiently is to adopt the mindset that you’re not going to start on something until you finish it. In other words, don’t spend a little time each day working on numerous projects. Finish one project and move on to the next one. Failing to do this means that you never get into a groove with your work.

Let me explain this by way of personal example. A big part of our primary business is adding blog posts to our client’s websites. Also, we recently switched our virtual private server from the company we were using to Siteground. As a result of this switch, we had to migrate all of the websites we manage from one server to another (this was a lengthy process).

In regards to adding client content, and migrating websites, we could have taken the approach of adding content to a few sites each day and migrating a few sites each day. This would mean constantly switching tasks, however. So, instead, we set aside time where we weren’t going to add content and were going to devote ourselves to site migration until it was finished.

Once that was done, we devoted ourselves to adding content to the websites until that project was completed. In other words, we finished one thing before we moved on to the next.

The benefit of this is extreme: when you switch tasks it takes time to get into a groove with the task you just switched to. This “lost groove time” greatly reduces your efficiency. It is, therefore, important to finish one task before moving on to another. Don’t keep jumping back and forth between partially completed projects.

When taking on new freelance projects, I take a “one at a time approach.” If I’m building something out for customer One, and I know it’s going to take me a week, then I let potential customer Two know that I won’t be starting their project for a week. I also adjust my proposed delivery date accordingly.

Manage your workflow so that you’re working on one thing at a time, but so that you have a stream of work lined up.

It is common for us to have multiple projects lined up and under contract. We, however, always finish one before moving on to the next. We do not jump back and forth between projects. This allows us to get more done, in less time, and we make more money as a result.

The third step to increasing your efficiency is to deal with problems as soon as they arise. And when I say “as soon as they arise,” I mean immediately. Not doing so will simply allow the problem to swell and become larger.

Here’s a simple example - my business partner pointed out to me the other day that the app we use for syncing contacts between everyone’s email accounts wasn’t working. I immediately stopped what I was doing to fix it.

It would have been easy to say “I’ll deal with this later.” In between that moment and later, however, people in our organization would have needed to make notes about customers, to pull up contact info, and so on. The app not syncing would have created problems in others’ workflow. This would result in a small problem (the app not working) compounding into larger issues.

Not dealing with inefficiencies immediately can compound in other ways. Consider this real world example: I was once talking to a customer on the phone while they were heading to their office. Once they got to their office, it took them extra time to get in the door. This was due to the fact that the customer had an excessive number of keys on their keychain and she said “I don’t even know what most of these keys are for” while we were talking. When I talked to the customer again, about a year later, they made the same comment.

Now consider this - the customer probably loses thirty seconds a day fumbling through keys that didn’t even need to be on her key ring. That’s 2.5 minutes lost per week. Over the course of the year that works out to roughly two full hours that are lost. 2.5 hours of substantive work likely works out to several hundred dollars. If this customer had taken a time out to take unnecessary keys off of their key chain immediately after realizing it was a problem, they would be making several hundred dollars more a year.

The foregoing story of the key ring may seem silly to some. It proves the point, however, of dealing with issues as soon as they arise. Failing to do so results in ongoing lost production. Taking the approach of “I’ll deal with this minor annoyance later” will result in you losing many hours over time in order to save a minute today. Don’t sacrifice hours to save a minute.

The fourth, and one of the biggest steps towards increased efficiency, is to improve your management of communications. Communications are one of the biggest ways you can lose time, for completely unproductive purposes, while feeling like you’re getting work done. Let’s look at the need to completely avoid real time communications and to better manage email.

One of the biggest problems in many tech companies (and businesses in general for that matter) is the use of real time messaging platforms such as Slack, Microsoft Teams, Google Hangouts, and others.

The problem with these platforms is twofold. First, they result in people sending a large number of small messages as opposed to requiring that they put all of their thoughts into one message. This means that the reader of these short messages has work in a constant state of distraction. The individual gets far less done as a result.

Second, and perhaps worse, is the fact that these platforms lead to co-workers/employees/partners sharing random thoughts that don’t really have anything to do with the project at hand as well as the sharing of messages essentially saying how much one liked the last message.

These types of interruptions contain no actionable information and, instead, just lead to the reader being bombarded by extra noise. It is far more efficient to read one comprehensive message, which is why we avoid these types of platforms.

Many developers could also improve how they manage email. It is a mistake to read emails as soon as they come in. Instead, you should completely deal with your email inbox during one to two set times per day, and avoid it for the rest of the time.

There are several reasons for this. First, as stated above, you shouldn’t read an email unless you are prepared to act on it. Second, it is important to consider how people tend to use email. Way too many people fire off a message as soon as a thought enters their head.

It’s not uncommon for me to open my inbox in the afternoon and have multiple emails from the same customer. By waiting to deal with emails until a set time, I can then read all of their emails and write one consolidated response. This is opposed to writing separate responses, which would take more time.

Also, you actually create more email for yourself to read if you respond to messages immediately. Suppose Joe Client sends you a random thought and you respond. Now suppose that Joe does this several more times, and you respond, during the day. Joe is likely to respond back to each of your responses (creating a large number of emails to read). By writing Joe a consolidated response, at a set time of the day, Joe will only have one email from you to respond to. The net result is far fewer messages hitting your inbox. This saves a great deal of time.

After reading the prior paragraph on email management, you may be saying to yourself “but my clients want to hear from me right away.” If you go through your inbox at least once a day, then they’re never going more than about 24 hours without a response.

If something is so important that someone can’t wait 24 hours for a response then they should be calling you on the phone as opposed to shooting you an email.

I never go through my email more than twice a day and our customers feel that we give good service. Save yourself time and only respond to emails during set time blocks each day.

When you put all of the above-mentioned concepts together you will greatly improve your efficiency.

By using the O.H.I.O method you will reduce the amount of time you spend reading email, reviewing documents, and so on.

Only starting projects when you are prepared to finish them, and working on one thing at a time, reduces distractions and allows you to stay in a groove.

Dealing with problems as soon as they arise will result in you losing minutes today, but saving hours over time.

Finally by improving/reducing your communications, you will avoid distractions and actually have fewer messages to respond to. Put these things together with actually putting in the hours and you have a recipe for success.

Suppose the foregoing efficiency tips make you twenty percent more efficient than the average developer. Also, suppose you average a minimum of 43.3 hours worked per week (the reason why I use this number was explained above). Finally, suppose your competitors average forty hours a week at average efficiency.

You will achieve in one year what it takes your competitors roughly 15.5 months to achieve. If you focus all of this production on high value activities, then your bank account will grow quickly.

Action items for freelance developers who wish to better manage their business on a day to day basis

Freelance developers can greatly increase their net income by better managing all aspects of their day-to-day operations. The following is a list of “action items” which can help you to immediately increase profits:

• Properly manage your financial and administrative affairs.

  • Read Profit First and adopt its suggested financial plan for your business. Alternatively, develop your own financial plan and stick to it. Sign up for accounting/bookkeeping software and get in the habit of doing your books regularly.

  • Research and learn about administrative requirements you must meet (i.e. filing for a business license). This will vary by state and locale. Your local Secretary of State’s Office may be able to assist with this information.

• Manage your development work in an efficient manner and identify your “high value” work opportunities.

  • This is the work that pays the most per hour of labor, not necessarily the most in total.

  • Make a plan to focus your business on these high value activities and maintain a narrow focus in regards to the type of work you take.

• Decide on a minimum number of hours that you will commit to the business each week. Make sure you hit this hour requirement on a weekly basis.

• Adopt the Only Handle It Once (O.H.I.O.) method.

• Adopt the habit of not starting on something until you are prepared to finish it.

• Adopt the habit of dealing with problems as soon as they arise.

• Improve your management of communications.

  • Avoid “real-time” communication platforms such as Slack or Microsoft Teams.

  • Set aside time each day in which you will deal with email. Do not deal with email outside of these designated time periods.

Conclusion

In no way is this guide meant to tell you every last thing you need to know about running your own business. Sticking with these tips, however, will help you to get out ahead of your competition.

Keep in mind that being successful in business requires effort in all of the areas described above. You’re never going to be better than the area you are weakest in. Because of this, I can't stress enough that you need need to be striving for constant improvement in all aspects of your business.

About Me

I am a web developer who maintains websites and other software on behalf of law firms through SEO For Lawyers. I am also a co-founder of Modern Website Design. I enjoy writing on issues related to small business and entrepreneurship.

There’s an important thing to remember though, especially if your customer is some type of small business which deals with the public (such as a restaurant, a bakery, and so on). That thing to remember is that the customer probably doesn’t care about HTML, CSS, or JavaScript. They care about whether the website performs well in search and whether customers come into their business as a result.

This means that you need to build the website with search engine optimization (SEO) in mind. One of the bigger developments recently in the area of SEO is Google’s increasing use of “structured data” in its analysis of websites. This trend made me decide to write this article on the use of structured data in your various web projects.

I’m going to divide this discussion up into four sections. The areas I’m going to delve into include:

1. What is structured data and why does Google care about it?

2. How to use structured data in a website.

3. How to test your structured data and monitor for errors after the site launches.

4. The need to keep your structured data up to date after the website launches.

This is an important discussion to have. I find that many, many, many, many……(many) people who hold themselves out as web developers don’t actually know much (if anything) about SEO.

I also find that many people who hold themselves out as assisting with SEO don’t actually know anything about web development (and often can barely code at all).

Someone who can actually code, and who understands what the search engines are looking for, can provide a great deal of value to their customers. This value, in turn, helps you to make more money as a developer. In other words, pairing an understanding of SEO with your newly learned web development skills can help you go from looking like this:

To looking like this:

So let’s get to it and discuss why structured data is important to a website’s SEO.

What is structured data and why does Google care about it?

Structured data is form of markup you can apply to your website’s content. This markup allows you to provide information to search engines about your web pages and the information they contain.

This markup is important because search engines, while getting better at understanding natural language, can struggle with understanding the wording or other content contained within a web page.

For example, if someone is searching for “professional to help with investing,” search engines may struggle to distinguish between sites which belong to investment managers and sites which discuss how to pick an investment manager in general (this is a very generalized example).

By using structured data, you can help Google know that your website actually belongs to an investment manager.

Another purpose of structured data is that it helps search engines identify who is who on the web. Suppose, for example, you're doing a website for a political candidate. The candidate, in addition to an official campaign website, has an official Facebook page for the campaign.

For obvious reasons, there may be people who start false Facebook pages about the candidate. By including certain structured data in the website, you can create a relational link between the official Facebook page and the campaign’s website. This helps the search engines to know which Facebook page is legit and which one is bogus.

Google has been working to identify who is who on the web for roughly a decade. This started with their now defunct social network, Google+ (you know…..that social network that you may have tried but none of your friends were on).

Back in the early part of this decade, if a website included a link to a Google+ profile, and the link included the “rel=author” attribute, the link informed Google that the website belonged to the holder of the Google+ profile. This was something Google intended to ratchet up in search, as one of their executives explained in this 2013 video:

Google abandoned this approach, mainly due to the struggles of Google+, in August of 2014. Since that time, Google has been increasing its emphasis on structured data as a way of annotating information in search results and identifying who is who on the web.

So, in short, structured data is something you should be including to add value to any website you build for your clients.

How to use structured data in a website

Structured data can be used in a number of ways. In addition to using it to help identify the individual or entity operating the site, you can use it to help Google better understand a page’s content.

If, for example, you’ve built a website for a bakery, then there are types of markup you can use to highlight the business’ good reviews, to highlight upcoming events, and so on. This markup can lead to highlights in search results which, in turn, will make your customer (the bakery owner) happy.

Let’s look at a few examples of what this looks like in real life, using a real estate agent website which I recently built (I'm including the link in case you want to take a look at the code).

The realtor I built the website for focuses her business on dealing with investors. The website includes structured data which informs Google that the site belongs to an actual real estate agent. When I perform a Google search for “Dayton realtor for investors,” the top three organic results I receive are as shown in this photo:

The first result is the website I built. The latter two are websites which do not belong to actual real estate agents, even though that is what I was clearly looking for with my search term. In fact, only one other realtor website even appears on the first page of the search results. Now, I’m not saying that this is entirely due to the structured data, but it certainly helps.

The markup used for structured data is generated/governed by Schema.org. When you’re marking up a site, an individual page, an event, or a product, it’s important to use as much markup as is reasonably possible in order to provide the search engines with relevant information.

Schema.org's website often provides examples of what your markup should look like. The start of the markup that I used for the realtor site involved informing Google that the site belonged to a real estate agent by placing the following inside of a

:

<itemscope itemtype=http://schema.org/RealEstateAgent>

This tells the search engines that I am relying on schema’s markup to identify and describe the site and that the site belongs to a real estate agent, as defined by schema here.

I was also able to use structured data to tell Google that this realtor has good online reviews and that they work on commission. This, in turn, is now showing up in search results.

For example, the page at the following link is on the first page of search when I look for Dayton apartments for sale. (Again, I'm including this link in case you want to look at the site's source code).

Notice that the search results include the fact that this is a five-star rated realtor and that the professional works on commission? In other words, the use of structured data helps the site to stand out more in the search results. This information was added to the site with the following markup:

<div itemprop="aggregateRating" itemscope itemtype="http://schema.org/AggregateRating">
Rated <span itemprop="ratingValue">Actual Rating of Realtor</span> out of <span itemprop="bestRating">Highest Possible Rating of Realtor</span> by <span itemprop="ratingCount">Number of Total Reviews</span> clients at <a href="URL of Website Where Reviews Are Located" target="_blank" rel="noopener">Name of Website Where Reviews Are Located</a>
Fee Structure: <span itemprop="priceRange">Commission</span>
</div>

Figuring out what structured data to use in a site, or on a particular page, can be difficult. Fortunately, Google gives a few tools that help with this. Let’s look at those tools in the following section of this article.

Testing your structured data and monitoring it after your site launches

The first step in adding structured data to your content is to figure out the category it falls into. You can do this by researching the Schema.org website, looking at the data from other websites, or a combination of both. Once you find the category you fall into, the rest is pretty easy. Let’s stick with the real estate agent example from above.

The first step is to add the realtor markup, from Schema, the site. Then enter your url into Google’s structured data testing tool. The tool will tell you what structured data has been found on your site, what errors you may have, and what structured data is “suggested” for the category you’ve selected. Once you start using this tool, you’ll find that making sure you have the right information in the website becomes fairly simple and straightforward.

Also, I heavily rely on the examples which Schema provides for various categories and data types. Using Google’s testing tool can help you to make sure that you have the correct data in your site from the get go.

Another important tool, in monitoring for errors, is Google Search Console. This is another developer tool, from Google, that will let you know when structured data errors appear on your website after launch. This is an incredibly useful tool and if you’re supporting your client’s website on an ongoing basis, after launch, then you need to be using it to monitor things.

The need to keep your structured data up to date after a website launches

It is important to understand that you may need to go back and edit a site’s older structured data after a site launches. This is because, like many other things, the standards for structured data change over time. As an example, I build and maintain websites for law firms as part of my primary business. Under the prior structured data standards, these websites were marked up with the following:

In later revisions to the structured data standards, however, the “Attorney” classification was deprecated and changed to “LegalService” – as such, I had to change the markup on each website I manage. I tell you this because it’s important to realize that these standards change somewhat often. It’s important that you keep up with the changes.

Conclusion

Web results are becoming increasingly rich in that they provide more information than just a link to a website. It’s important for your clients that you markup your pages accordingly. Doing so is important to your SEO efforts and to providing value to your customers. This is why it’s important to include structured data in your projects.

About Me

I am a web developer who primarily provides various types of services to law firms. I am also a co-founder of Modern Website Design. I enjoy writing on issues which help freelance developers and small businesses to grow their revenue.

I’m writing this post to let you know that you don’t need to let that fear of the tax man prevent you from striking out on your own as a freelancer. Like anything else, you can learn what you need to know in order to deal with such issues. I’m going to talk about how we manage our taxes in our business so you can see that there are actually quite a few benefits to being a freelancer.

I’ve also recorded a video lecture on this that goes into even more detail here:

One BIG thing I want to make clear is that I’m not a licensed tax professional, nor am I holding myself out as one. I’m simply sharing what we do, upon the advice of our tax accountant, in our business. I’ll also break down what we do and why we do it. Let’s look at the following:

1. Why there are tax advantages in being a freelancer

2. How to utilize a “flow-through” entity

3. How to handle reimbursement of mileage and other expenses

4. What to do about reimbursement for equipment and other services

One thing you should understand is that an important goal of being in business is keeping as much of your revenue as possible_._ There’s no point in working if you’re not actually keeping any of the money you earn. One of the best ways to keep more of what you earn is through tax management. This is why going about things the right way can help you look like this:

While freelance developers who don’t pay attention to tax management can wind up having to ask for handouts just like this poor guy:

You should know that this article was written after speaking with our company’s tax accountant in regards to the legislation which was passed for the 2018 tax year. Upon the advice of our accountant, we are continuing to operate our business as an S Corporation for the reasons explained in this article.

Now let’s get to it.

Freelance developers can save on employment taxes by utilizing a “pass through” entity

There are several ways you can structure your freelance business. You can be a sole proprietor and file a “Schedule C.” This will have you breaking down your business revenue and expenses on your personal tax return.

You can also start a separate business entity, such as an LLC. An LLC will file its own tax return on which it will report revenue, expenses, and net income. The LLC, however, will not pay taxes itself even though it is a separate entity. The LLC’s net income will be reported on your personal tax return.

In our business, we formed an LLC and filed an “S Corp election” with the IRS by filing IRS Form 2553. This means that our LLC, for tax purposes only, is considered an “S Corp” by the IRS. The reason we did this is that it allows us to save on self-employment taxes.

Let’s look at what self-employment taxes are and how we save money using a flow through S Corp. This is going to sound complicated — but read through it and I’ll provide some tips to help simplify everything.

If you’ve gotten a paycheck from a job, then you’re used to paying 6.2% of your salary to the government for Social Security and Medicare. These are your employment taxes. Self-employed individuals still pay these taxes in the form of “self-employment tax.”

Say, for example, that you freelance as a sole proprietor and after expenses, you clear $100,000. When you file your taxes with the government, you’ll owe roughly $6,200 ($100k x 6.2%) in self-employment tax on top of your normal federal income taxes. You’ll pay this self-employment tax if you’re a sole proprietor, an independent contractor, or if you are an LLC with no S Corp election.

If you start an LLC and do the S Corp election as we did, then you will need to classify yourself as an employee of the business. You will run regular payroll and you must pay yourself a reasonable salary. You will have Social Security and Medicare taxes (6.2 percent) held out of your paychecks.

Any profit, on top of your salary, however, will be exempt from self-employment tax. This means that you will be saving an extra 6.2% of your profit. That profit will still be subject to regular income tax. Let’s put down some numbers to show how this works.

• Say you’re an independent contractor or sole proprietor with $100,000 in profit (you get no salary because you’re not an employee). You will pay federal taxes on $100,000 plus $6,200 in self-employment taxes.

• Say you own an LLC that did not make the S Corp election. You clear a profit of $100,000. Again, you would have no salary. Your tax obligations are the exact same as the independent contractor or sole proprietor.

• Say you own an LLC with the S Corp election. You pay yourself a $60,000 salary and have $40,000 in additional profits. This is the same $100,000 as the individuals above. You would pay federal income tax on the entire $100,000. You would have 6.2 percent withheld from your salary for Social Security and Medicare. The $40,000 profit, however, is exempt from self-employment tax. This means you save $2,480 (6.2% x $40,000) over the other examples discussed above.

This S Corp election is one of the ways in which being a freelancer allows you to keep more of your money than if you simply got a job somewhere. If you get a developer job and take a salary, then you’ll pay the 6.2 percent tax on all of your earnings.

It’s very, very important to note that the recently passed tax legislation changed some of the ways in which “flow through entities” are taxed. After talking to our accountant, however, we are still taking the “S election” route in our businesses (as I stated in the note above). Again, I am not a tax professional or financial advisor of any type. It’s best to discuss your situation with a CPA.

I know the above process sounds complicated — starting an LLC, making the S Corp election, and managing payroll. But it’s not overly hard. Most states allow you to easily form an LLC online as we did. The S Corp election is a simple matter filling out IRS form 2553 and following its instructions. We manage our payroll through Intuit’s Payroll Service. We use their “full service” option which means that they file all the necessary paperwork, stemming from payroll regulations, for us.

As complicated as the process above sounds, it was actually pretty seamless for us. We have Intuit hold out some extra cash from our paychecks to cover the federal income tax which will be applied to our business profits. We then pay our accountant to handle everything for us at the end of the year. At the end of the day, we come out ahead by doing things this way — and it’s not much hassle at all.

Freelance developers should track all mileage and expenses related to their business

Mileage driven for your business is tax deductible. For 2018, the IRS allows you to deduct this mileage at a rate of 54.5 cents per mile. To keep things simple, we track all of our work mileage and our LLC writes a reimbursement check each month.

If we drive 100 miles in a month for work then the LLC will write a check at the end of the month for $54.50. We don’t have to pay taxes on this money when it goes into our personal account, and the LLC takes it as an expense (which means that our flow-through income is lower).

It’s important to remember what constitutes “business mileage.” Every time you drive to and from a customer’s location, that’s for work. Driving to a networking function? That’s likely a work expense. Having lunch or dinner with other developers? That may well be a work-related networking event. These are just a few examples of how your mileage can add up.

And, by the way, money you spend at those networking functions may also be tax deductible. Make sure you track those expenses as well.

Freelance developers can often write off computers and other necessary equipment

Buying a new computer for work? Sounds like a work expense. Need to buy a scanner, some toner, or other similar equipment? That may be a work expense as well. The laptop I’m using to type this was purchased through our LLC/S Corp.

When you’re working for yourself as a freelancer, and have properly set up your business, you start to realize that there are a number of tax advantages in doing so. If the primary reason you’re buying something is for work, then there’s a good chance that it will be a write-off.

Conclusion

This was just a quick overview of some of the tax issues we deal with as a small business. Once you start running your business, you really will see that these things aren’t complicated. Don’t let apprehension over these types of issues prevent you from striking out on your own. Are you currently freelancing? What do you do to deal with tax issues? Let me know in the comments.

I owe thanks to James R. Cloyes, CPA for taking the time to speak with me regarding this article.

You may follow me through our businesses at SEO For Lawyers and Cincinnati Website Builders or on Twitter.

Whether you should become a freelancer will depend on your particular situation. With that said, you can make a very comfortable living if you choose to freelance. So, let’s have a discussion about whether you should go the freelance route and, assuming it is for you, how you can make money doing so.

In this article I’m going answer the following questions:

1. Should become a freelance developer?

2. How to stand out from other freelancers.

3. How to sell your services

4. Where to sell your services

Those who choose to go full speed ahead, and go about it the right way, have a chance to be in a situation which looks like this:

Those who freelance, without trying to take their business to the next level, may wind up being failure. Like thirty percent of small businesses that fail within their first year. (See this article)

I’m assuming you want to be in the seventy percent of people that succeed. Assuming you’re not opposed to prosperity, let’s get to it.

Should you become a freelance developer?

The first question in deciding your career path is to determine whether freelancing is even a good fit for you. That boils down to two questions.

• Do you have the personality type to freelance?

• Can you make money doing so?

Let’s look at each of those in turn.

Whether or not you have the personality to be a freelancer depends on whether your have a strong sense of discipline. Do you need structure provided for you?

When you’re working for yourself there is no one to tell you that,

• you have to be at your desk by a certain time

• you need to start working on a project on the first of the month to get it done by the end of the month

• you have to return phone calls to your customers, etc.

This means that you need to be able to force yourself to do these things and to avoid the many distractions which exist in today’s world. This includes the ability to binge watch Star Trek on Netflix (which is the best way to spend one’s time IMHO).

If you have the ability to “self regulate” then you have the personality type to freelance. If you lack this ability then you’re better suited to be working in an environment where your employer provides that structure for you.

If you’re someone who needs structure provided for you then, I can’t stress enough, that it is nothing to worry about. Many people who thrive in a freelance environment wouldn’t do well in a workplace and vice versa. It’s just a matter of personality types.

When answering whether you can make money as a freelancer, the answer is “YES!”. Here’s why. Roughly thirty percent of small U.S. businesses don’t currently have a website (see this article from smallbusiness.com). Other studies have put the number even higher, but to be conservative let’s stick with thirty percent. The country has roughly 24 million small businesses. This means that 7.2 million small businesses (30 percent of 24 million) need web work. If you charge the average company $3,000 for a website then that means there is $21,600,000,000 worth of work to be done (7.2 m x $3,000). Last time I checked that’s a really frickin’ big market. So, yes, you can make money as a freelancer.

How to stand out from other freelance software developers

If you decide to freelance it’s important that you stand out from your competition. Otherwise you might as well have a plaque on your desk which says:

I don’t know about you — but I think being average is no fun. Fortunately, standing out from the crowd is not difficult. This is because most developers fail to truly connect with their customers. If you choose to connect with your customers the right way then you’ll have work lined up for many moons to come.

I strongly believe there’s a disconnect between the development community and businesses who would hire a developer. Do a Google search in your city for local web designers. There is no shortage of people willing to build websites for small businesses. In spite of this labor surplus, roughly thirty percent of small businesses don’t have a website. Whenever you have a surplus of providers, whose services aren’t be utilized, you have a situation where those providers are failing to connect with their customers.

The reason why developers don’t connect with customers is obvious. When you carry out the search I mentioned above, to find developers, you’ll notice a common pattern. Developers fill their websites with techno babble about coding languages, etc.

Here’s a news flash.

If a small business owner doesn’t have a website in 2017 then chances are that they don’t have a clue of what any of that coding jargon means.

Also, if a small business owner is thinking “I need a website to help get more customers”. How would they know whether that technical jargon will actually help them get more customers. In other words, most developers aren’t speaking to the questions which their clients are asking. This is reason for the disconnect between the development community and small businesses.

Bridging the “developer disconnect” isn’t hard. You just need to speak to what your potential clients are looking for and discuss how you are going to solve their problems. First, your own website should explain how you help businesses solve the problems they are facing. Do not use your first impression (your website) to talk about things which people don’t understand and don’t care about. You have to present yourself as a problem solver and tell potential clients how you are going to solve their problems. You will then be able to bridge the disconnect between developers and small businesses. That, in turn, will make your freelance gig grow by leaps and bounds. Let’s have a discussion on how to sell your services so you can see methods for presenting yourself as a problem solver.

How to sell your services as a freelance developer

Selling is something that a lot of people aren’t comfortable with. But, one of the biggest parts of being successful is being willing to learn about and do things which make you uncomfortable. I’m sure you were nervous about learning how to code, and now you’re doing it through freeCodeCamp. You can learn how to sell your services also. Don’t worry that it makes you uncomfortable. Just remember that one’s comfort zone is where their dreams go to die. I know this is easy for me to say, since selling comes naturally to me, but you can learn to do this and after a while it will seem as easy as pushing a button.

Selling your services can be broken down into three parts

• your initial contact with a potential client

• putting together a proposal

• closing the deal

Let’s look at each of these.

The initial meeting (usually over the phone) is the most important contact you’ll have with a potential customer. This is your first impression. Most developers swing and miss by using this meeting to talk about their skills, coding, etc.

As I just ranted about in the discussion above, it’s a mistake to take such an approach. You should use this meeting to ask questions about your potential client’s business and to determine the problems that they want to solve.

If you’re speaking to a pizza shop owner, who needs a website, then you need to be asking questions about his business. For example,

• Is it take out only or do they have a dining room?

• Do they have a bar?

• How many locations do they have?

• What are the demographics of their customers?

There are plenty of questions to ask on top of these. Once you have an understanding of the business then you can identify their problems.

Once you’ve identified your client’s problems then you can tell him how you can fix them. This is the proposal stage. Sticking to the same example , if the pizza shop has a dining room, you can propose including plenty of photos which show how much fun it can be to dine there. If they have a bar then that’s something the website should feature as well. Are they near a college? If so, then there should be a section featuring “college specials” and they may also want a mobile app so that students can order online. These are just a few examples of proposing solutions to potential problems.

When you try to close the sale, it’s important that you explain how your proposed solutions will meet the need of the client. While having this discussion, it’s important to speak from the perspective of a “problem solver” and not from that of a “developer.” The more you speak the language of your client then the more likely they are to hire you.

Most developers try to “sell” but tout their technical expertise and talk about software. If you want to sell yourself effectively then you need to think about solving the problems of your customers instead.

Where freelance developers can sell their services

Freelancers can be just as frustrated over figuring out where to sell their services, as they can be about the topic of how to sell. Let’s look at three places where you can start getting some clients.

A good way to connect with potential customers is through networking events. One of the biggest mistakes I see developers making, is that they go to networking events where most of the attendees are other developers. Don’t do this. Instead, you want to go to events with lots of small business owners and where you are the only developer. A great way to do this is to join BNI. This is a group where you’ll meet many different types of small business owners and you’ll all open your address books up to each other. For example, if an auto mechanic in the group comes across someone who needs a developer then you will get the referral. You, in turn, will refer people other members of the BNI chapter. You’ll find this far more effective than talking to other developers.

Another way to get business is to sell your services through third-party services such as Fiverr or Thumbtack.

The upside of using these services is that they have a lot of people looking for the same services you are willing to provide.

The two downsides are that,

1. You have to pay a fee for each client you get through these services and

2. You’ll tend to do work for customers at a rate much lower than what you would normally charge. That website you would normally build for $3,000 may only go for $1,200 on one of these services. These types of platforms can get you a good number of clients but you’ll be working with really small profit margins.

A third option for getting business is to do so through your own website. The upside here is that you’ll be charging customers your full rate. The one thing to think about is paying for the promotion of your site. The easiest way to promote your web presence, in a manner which will actually bring you business, is to use Google’s Adwords platform. These are the ads which you see on top of search results. Paying for the ads can be expensive but you should certainly see a return on investment.

This discussion was a quick overview of “basics” for starting a freelance business. Do these things and you’ll get ahead of your competition. Are you currently freelancing? What has your experience been so far? Let me know in the comments.

You may follow me through our website at SEO For Lawyers or on Twitter.