Category Archives: Freelance

How to Pass on a Project

Sometimes a project will make its way into your pipeline that you either don’t think you can handle or don’t want to take on. There are a lot of situations where that might be the case:

  • It isn’t the right size for you
  • It requires skills that you don’t currently possess and can’t easily acquire
  • The timeline is too tight given your current schedule
  • You have a weird feeling about the client
  • You don’t think you can work within the process the client requires

The question is, what do you do in these situations? You could tell the client you’re not interested and leave it at that, but I find that being a helpful resource in a situation like this can lead to new opportunities in the future. How do you do that?

Build a Reliable and Trustworthy Network

You should know other freelancer and agencies from industry events, online chats, and other networking opportunities. Ideally, the freelancers you know should have varied skill sets and the ability to take on projects of various sizes. For example, you might know a designer who specializes in large-scale corporate websites (and does a bit of print work, as well) and another who almost exclusively performs logo and identify work.

Do your best to vet your network so you can feel confident referring prospects to them. Ideally you’ll have worked with a contact in the past so you have first-hand knowledge of the quality of their end-product and process. Don’t be afraid to ask people to send you work samples so you can refer them work. Very few people will refuse a proposition like that.

Explain Why You’re Not a Fit

When referring a prospect to another freelancer, explain to them why you don’t think you’re a fit for their project. I’ve found being tactful and direct to be the best route to take. Something like this could work:

Ryan, I’d love to work with you on your project as it is a good fit for my skill set and it seems like it could be a fun one. Unfortunately, I have other projects scheduled for the time leading up to your specified launch date.

By explaining why you can’t work on a project, you leave the window open for the prospect to change the thing that is preventing you from working together. For example, I’ve had people change launch dates to something more amenable to my schedule in order to work with me. If I hadn’t let them know what was standing in the way, they wouldn’t have been able to do that.

Refer with Details

After explaining why you can’t work on a project, choose a couple people from your network who you think might be a good fit for it and send their contact details to the prospect. In addition, provide some information about why you think each person would help make the project successful and (ideally) a little bit of context about them. That context could include past projects, collaborative work experience, or anything else you think would help the prospect make a decision. Remember, you’re trying to be helpful.

Follow Up

I don’t always do this, but on projects that I really wish I could have worked on, I’ll follow up with the prospect down the road to see how things went. Sometimes they’ll be working with one of the people who I referred them to but as often as not they won’t have started yet. That gives me another chance to work with them and take on a project I was excited about.

General Guidelines

The most important thing to remember is that you should be helpful and courteous. Why? Because you’re a good person, that’s why. Also, if you help someone get what they need, they’ll be more likely to help you down the line. This could be a referral to you for a different project, an introduction to someone who could help you with your business, or advice of some sort.

I’m interested to know how other people pass on their projects. How do you go about referring work to other freelancers if you can’t or don’t want to work with the prospect?

Signs You’re Not Actually on Vacation

I scheduled a sorely needed vacation for this week. I needed some down time from work and a little bit of a recharge. My vacation was supposed to start Sunday but I still don’t feel like I’ve really shutdown and am getting the rest and relaxation I need. Here are the things I’ve noticed that mean I haven’t started my vacation yet.

Still Working

Well, I was on Sunday. A project that was supposed to wrap two weeks ago needed some last minute support on Sunday and I was the only one who could provide it. That meant I had to sit down in front of my computer and work on my vacation. Ugh.

Checking Business Email

As a freelancer, email is my main communication channel. I get noticeably upset when I have a large amount of correspondence unread. Because of this, checking my email has become something of a compulsion: I check it first thing in the morning and then every chance I can throughout the day.

Because I’m not actually doing development work, this means I have tons of time to exercise this (admittedly terrible) habit. I haven’t gotten to the point where I’m not checking my email yet, but I’m close.

Thinking About the Last Project

I referenced above that I worked on a project while I was supposed to be vacationing. I thought that launching it would be the end of the line for that project, but I still find myself dwelling on things I could have done differently to make the project go smoother, deploy faster, or work better. After working on something for 8 months, I thought I would be able to get it out of my mind once it was live. I haven’t been able to do that yet.

Figuring Out New Projects

I have work lined up for when I come back – the projects are clearly specified and look like they’ll be a lot of fun. I shouldn’t have to think about them while I’m vacationing, but I still am. I’m anticipating how I’m going to make sure the new projects get done on time and on budget.

I really need to take a step back and realize there is time to take care of the new stuff when it arrives (better planning has ensured that) and enjoy my vacation while it is here.

What About You?

I’m sure I’m not alone in my vacation failure. How do you deal with vacationing as a freelancer?

Google AdWords for Freelancers

When I started freelancing I did not have a reliable lead generation channel. My website received almost no search traffic because it was relatively new and light on content. Job boards were a good source of leads, but it was a lot of work to convert those prospects into clients. I didn’t know what to do.

That’s when I decided to give Google AdWords a shot. I’d heard that people who clicked on AdWords ads were more likely to convert because they had intent. They are looking for a specific product or service and are more likely to convert than random web traffic. I was also enamored by the fact that the leads would be inbound, requiring less of my time to acquire. Rather than constantly looking at new jobs posted on job boards, I could spend an afternoon setting up a campaign and drip money into it as necessary.

Building Campaigns

I didn’t really know how to get started and I didn’t want to get stalled by analysis paralysis, so I sat down, thought about what services I offered, and tried to discover how people would search for those things. I also determined that I would just send traffic to my home page because it was already built and prominently featured a “Get In Touch!” form that would allow anyone to contact me easily.


When I started thinking about what keywords I wanted to target, I knew that the keywords needed to be sufficiently narrow that they wouldn’t be ridiculously expensive to bid on. This means I targeted things like WordPress Plugin Developer instead of Developer or even WordPress Developer. Then, I determined that I would build two separate groups of keywords based on the following:

  • what I am (my role)
  • what I provide (delivered product)

Let’s look at some examples of those groups and the keywords I used.

Role Based Keywords

On any freelance project, my role can probably be described generally as Developer. For my AdWords campaigns, I restricted that to WordPress Developer. Since I do both frontend and backend development, I knew I could target both those roles as part of my keywords. Because I was doing narrow matching for my keyword, I knew I wanted to target things as specifically as possible to keep my cost down. Here’s some role-based keywords that I used:

  • Expert WordPress Plugin Developer
  • Best WordPress Plugin Developer
  • Custom WordPress Plugin Developer
  • Custom WordPress Theme Developer
  • Export Theme Developer

By looking at that list, you should get the picture. My list ended up being 60-70 role-based keywords long with variations on the basic concepts seen above.

Product Based Keywords

I didn’t want to generate keywords based on what I call myself, though, so I also built a list based on what I produce. In general, this boiled down to:

  • WordPress Theme
  • WordPress Plugin
  • WordPress Site

I added descriptive adjectives to each of those items and also generated very specific keywords from a list of previous projects I worked on that people might be searching for. If I already did it, people should be able to see.

Synonyms, Misspellings, and Equivalent Terms

Now that I had my main list built, I went through each item and thought of all the other ways that someone might search for that term. For example, someone looking for Custom WordPress Theme Developer might use the following equivalent keywords.

  • Custom WP Theme Developer
  • Custom Word Press Theme Developer
  • Custom WP Themer
  • Custom Word Press Themer

You get the picture. Grab your thesaurus, think of the different ways certain words in your keyphrases can be replaced, and keep expanding your list.

My Ads

The ads I created to show when someone searched for my keywords weren’t anything special. I didn’t do a lot of experimentation or research, I just thought about what someone would want to read and would be likely to click on if they were looking for someone with my skillset. Here’s what one of my ads read:

Amazing WP Developers

Hire the best {keyword:WP Developers} today.
Get a free quote within 24 hours.

As you can see, I’m interpolating the keyword the user searched for into the ad itself. I’m using a generic term for WordPress (WP) in the title because the term WordPress is trademarked and restricted from use. Finally, the last line clearly outlines the benefit of clicking on the ad. The searcher will be able to get a free quote with a short turnaround. Who wouldn’t want that?


I was not disappointed by my foray into AdWords. The campaigns I ran were great for my business – I would turn them on for a few days, gather enough leads to nurture and convert into projects, turn the campaign off, and repeat. With a little bit of forethought and a reasonable converting landing page I was getting inquiries for more work than I could possibly handle. In terms of cost, I made back every dollar I spent on AdWords for a month as long as I landed a project that was at least my minimum project size.

Although the landscape is more competitive today than it was four years ago when I first used this technique, I still think a freelancer can be really successful using Google AdWords. I’m happy to answer any questions in the comments or speak more to my experience if anyone is interested!

The Mystery Bug that Communication Solved

I’ve been working on a project lately that was proceeding smoothly (for the most part) towards launch. I was working as part of a diverse team, some technical, some not, and we tested extensively on our staging environment. Everything was working great so we deployed to production to do our final testing.

We ended up running into a strange bug almost immediately – our payment processor couldn’t pass information it needed to back to our application. There was no way to tell what was happening because our server wasn’t even showing a connection from the payment processor so there was nothing to debug on our end. It was confounding. We redeployed our code to ensure that it was the same on both staging and production and copied all data from production to staging and the problem persisted.

Fortunately, we were working with a host who was committed to helping us solve our problems. We submitted a support ticket and I started searching for a reason and solution on my own.

After a copious amount of searching and iteration over pages and pages of Google search results, I finally found something that looked like it might be helpful. I immediately documented my findings in the support ticket and proposed some possible solutions on our host’s side. Based on my findings, our support tech was able to figure out the actual problem and suggest some solutions, which we pursued.

Over the course of 36 hours, the support tech and I passed probably four dozen messages back and forth. There is no way that I could have solved this without his help and there is no way that he would have gotten down the right path without my ridiculously verbose messages. In the end, this mystery bug wouldn’t have been solved without our ability to communicate and that is something that I’ve found to be true throughout my freelance career.

My Freelance Story

I’ve talked to a lot of entrepreneurs and I’m always fascinated by the varied experiences that lead a person to start a company. In particular, the freelancers I know have taken ridiculously distinct paths to their current positions. Since I find these things so interesting, I thought it would be fun to share my story.

Growing Up

My mother and father did a great job fostering my love of math, science, and other technical topics. They recognized I had an innate understanding of these things and wanted me to take advantage of my talents. I got Erector sets, Lincoln Logs, and K’Nex for every holiday and would spend hours designing and building things. I distinctly remember creating a pseudo-bionic claw out of K’Nex that would fit over my hand and do different things based on how I moved my fingers.

My father worked (and still works) in the automotive industry as an engineer of various sorts. Hearing about the kind of things he got to do, I knew I wanted to be an engineer. At the age of ten, I narrowed it down to to wanting to be an architectural engineer. My mind was set upon this path all through high school and into college.

The Rose-Hulman Institute of Technology

I enrolled at the Rose-Hulman Institute of Technology as a mechanical engineering major because I wanted to learn from the best. I loved it. The coursework was challenging, but I learned all about the way the world moves and works the way that it does. I acquired practical knowledge and got to do lots of fun things, including designing and building a small bridge truss to compete against my classmates’ designs.

The professors were great, everyone was bright, and I got to study things I was genuinely interested in.

General Electric

In the middle of my sophomore year, I applied for and was accepted as a co-op at General Electric’s Appliance Division. I moved to Louisville for six months and worked as part of the refrigeration team. Some of the work was interesting, but I’d say only 3-4 hours of the week were spent on any meaningful discovery or improvement. The rest was spent writing reports that no one read, attending meetings that were irrelevant at best and hostile at worst, and generally sitting around trying to look busy. I continually asked for more work and never received any. I either wasn’t trusted or there just wasn’t that much to do. It drove me crazy.

I spoke to my co-op supervisor about it and he said that’s just how the corporate game works. The manager of the department I worked in was obsessed with “butts in seats,” going so far as to accuse me of not being at work when he couldn’t reach me at my desk phone (which was broken) and I answered on my alternate number. How dysfunctional is that?

I was depressed – I talked to some other engineers and they confirmed that much of corporate engineering is making PowerPoint presentations and listening to others give them. That was not what I envisioned or wanted.

Changing Majors

I sat in my apartment in Louisville trying to figure out what to do. I knew that programming was important and that I could probably be good at it, so I taught myself how to tinker in PHP. After doing that for a couple of months, I decided to switch majors to Computer Science when I got back to Rose-Hulman. The course work was still challenging and I felt like I was crafting something new every single day. I was an artisan solving problems in context rather than a human calculator solving for x forces in y dimensions. I could tell after a couple of weeks that it would be a great fit. I was so excited!

Of course, I didn’t want to get caught in another corporate trap so I started investigating what the programming world was like. Much to my chagrin, I saw that a lot of the stories held the same kind of soul-crushing narrative that my experience at GE had elicited. There were other options, though. I found you could be a programming consultant, work over the internet, and make a great living. I was intrigued and decided to pursue this.

My First Gigs

During my junior year of college, I started investigating what it would take to go down the path that I wanted. It started by trolling job boards (as I outlined in my path to freelance success) and finding someone who would take a chance on me given my current knowledge and desire to learn. I found Mark Hammonds. He was my age and was looking for someone to do Drupal development for him as part of an effort to rebuild a website for a client of his. We both drove to Indianapolis to meet up for dinner and he was happy enough that I scored an hourly contract with him for the summer.

I moved in with Angela at her mom’s place, set up my computer, and got to work. It was my first real experience at providing professional development for money. There were highs and lows, but I wouldn’t trade those experiences for the world. Working from home was amazing – once I experienced it I knew I would never be able to go back to working in an office.

I also worked on small WordPress and Drupal development projects throughout the summer, but the work with Mark was always my main focus.

Senior Year

The summer ended and my contract ended with it. I had my taste, though, and I knew I could never step away from the kind of life that let me work from home on things I enjoyed and earn good money. My senior year at Rose-Hulman was a whirlwind as I balanced coursework, work-study, and figuring out how to start my freelancing business. I slept maybe five hours a night if I was lucky.

My last quarter at Rose-Hulman I decided to stop trying so hard in my classes and work on my business. My grades dropped down to Bs, but that was OK. I was too busy working on my website, gathering leads, wooing prospects, and starting to make real money. It was exhilarating.

One of the best things about Rose-Hulman is that they have a dedicated career center that will help you get a job (and a well-paying one at that) right out of school. They were surprised when I told them I didn’t have a job offer because I wasn’t looking as I was going to start my own business. I’ve always thought that was kind of funny.

College is Over

I did really well in college and graduated with honors, but that meant next to nothing as far as prospects were concerned. They wanted to know I could help their business, not how great my GPA was. I spent the summer learning how to nurture leads, building my technical knowledge, and generally working my butt off. I would get up in the morning and ride my bike to the gym, work out, shower, and then sit at Starbucks for 8-10 hours working. It was fantastic.

I was still perusing job boards throughout the summer and eventually stumbled on a job posting at FreelanceSwitch by a company in California called “Shane & Peter” (who are now Modern Tribe). While I thought it was a weird name, I decided to apply for a contract position. I remember sitting on the bed of the truck I was driving at the time in a Barnes & Noble parking lot and talking to them. That conversation would have a huge impact on my life for the next several years.

The Move

After the summer, Angela (my now wife and then fiancee) and I moved to Seattle, WA where Angela would be attending law school. We didn’t know anyone, but that was OK because we had each other. I worked on tons of projects as I tried to figure the whole freelance thing out. How could I make more money and advance my freelance career? How could I learn more about what I do while still serving clients?

Those first six months, I essentially worked non-stop. I’d get up in the morning and see Angela off and sit down in my office and work all day. Angela would come home and we’d go to the gym and have dinner and then I’d work until one in the morning while she fell asleep next to me.

Throughout this time I was working on my own gigs, but a majority of my energy was focused on serving Shane & Peter and, more specifically, their clients’ needs. I got to work on some stuff that wouldn’t have been available to me on my own. I talked to Peter almost every single weekday for almost two years. I got to attend retreats with other freelancers that they worked with. It was a lot of fun and I learned a ton along the way.

I’ll never forget the first big mistake I made as a freelancer when I forgot to add a condition to a WHERE clause in a SQL statement and caused intermittent performance issues on a client’s site. It was baffling because I didn’t have the data set to see it locally and didn’t have the server access required to debug it remotely. We eventually got it figured out, but I learned from that whole ordeal that the best thing to do when you’ve made a mistake is to calm down, communicate as much as possible, and do your damnedest to fix the problem. I think that is the most important lesson I learned from working with Peter.

Onward and Upward

During the time I was working with Shane & Peter, I was also working on expanding my business. I networked like crazy, revamped my website, and took on more and more expensive projects. I eventually wrote a book which I was able to use as a calling card. It became part a standard part of my pitch:

Oh, why should you hire me? Did I mention I wrote a published book on WordPress theme development?

I eventually priced myself out of working with Shane & Peter. I was spending 70% of my time on projects with them but making 70% of my money from projects that were with other clients. It just wasn’t sustainable in the long term. I peg that as one of the hardest things I ever had to do: I had to choose between working with my friend every day or making more money for me and my family. Making money won.

Solo + Agencies = Win

For a while I was on my own, but then something wonderful happened. I ran into an agency that could afford to pay me my normal project rate and would allow me to work on projects with companies that would otherwise be inaccessible. I don’t remember how I met Brian, but I’m so glad I did. We’ve worked on a ton of projects over the years that I’m really proud of and I’m happy to call myself a member of the TrendMedia team.

About six months ago, I stumbled upon another agency with whom I have a similar arrangement. He gets the projects, I serve the client, and everyone is happy.

So that’s where I’m at now – I work on projects with clients that I gather myself and fill the rest of the time with projects through these two agencies. I hardly ever want for more work (oftentimes having way too much to do!) and am making the money I need and want to for my family.

I Love Freelancing

What does all this mean in a broader context? I’m not sure, but writing this post has made me realize two things:

  1. I love what I do
  2. I’ve worked my butt off to get where I am right now

If I’ve worked with you and you’re reading this, thanks for making my lifestyle possible. I appreciate it more than you know. If you’d like to pick my brain about an aspect of my freelance story that I left out, leave your questions in the comments!

Celebrate Your Achievements

Have you done something awesome recently? Maybe you launched a new website, wrote a post on your blog, or solved a difficult business problem. Whatever it was, did you take the time to celebrate what you accomplished?

For me, the answers are often “Yes” and “No”, respectively. I’ve heard the same from many other freelancers. We are all so busy living for the next project that we never sit down and reflect on the successes that we are a part of.

The lack of reflection leads to a big problem. If you don’t stop to recognize your accomplishments, you might as well not have been a part of them. You’ll forget the successes you’ve had as you drive yourself towards the next deadline. For me, this has lead to moderate depression at the thought of “working so hard for nothing.”

This might seem like a simple mind trick (and it is), but the next time you have a successful outcome, sit down and spend a few minutes thinking about it. Think about how you got where you are and the lessons you learned. You’ll feel better in the present and the future. When you get frustrated on your next project, you’ll have something to look back at and remind yourself of how you’ve experienced success and how you can reach that feeling again.

I’ve started doing this in my business and personal life, and it is already paying dividends. Give it a try!

Quick List: Have a Great Phone Call

I’ve found that phone calls with clients and prospects can either be really great or a total waste of time. In my experience, the great phone calls all have the same things in common:

A strict time limit
The best phone calls have a defined start and end time that aren’t deviated from – everyone on the call knows this, calls in on time, and says goodbye when time is up
An agenda written in advance
Everyone knows what is going to be discussed, what the various options are, and what decisions need to be made
The right people are on the phone
Everyone who needs to be involved in the required decisions is present and ready to make a decision
Someone is responsible for taking notes
If there are no notes, you’ll lose track of what you talked about and the decisions that were made
People aren’t afraid to say goodbye
When it is time to go, say so – you’ve got other things to do and can’t be sitting around forever blabbing

Getting on the phone can be a great way to get to know a prospect, establish a deeper rapport with your clients, or put a human touch to your work. That being said, you’ve got work to do – get on the phone, get what you need done, and get back to work.

I’m Not on the Cutting Edge but I’m Close Enough

A big part of what I like about being a software developer is that I get to learn new things every day. Whether it is a new programming language or simply a different way of thinking about a specific problem, the novelty keeps my working life exciting.

Of course, learning mew things comes with a cost. First, I have to identify what I want or need to learn about. Then, I need to dip my toes in to evaluate if it is worth pursuing. Finally, I have to master the concepts required to be useful with whatever I’m attempting to pick up. Each of these steps takes a non-trivial amount of time.

As a freelancer, time is my most limited resource. In addition to doing the actual work I’ve been contracted to perform, I have to write project updates, pursue new prospects, and negotiate with leads. On top of these things, I have to eat, sleep, and exercise and make sure I don’t neglect my beautiful wife and handsome dog.

What this all means is that I have a small time budget to invest in learning new things. A consequence of this is that I’m seldom on the cutting edge of any new technology. There just isn’t enough time in the day to invest in learning all about the new hotness (even if it seems really interesting).

This used to worry me. I wondered if my skills were going to be obsolete because I wasn’t building new applications in the language or framework of the month with every non-working waking hour. I don’t worry about that anymore. I’ve learned that, with a baseline skill level and a desire for knowledge, I can stay close enough to the cutting edge that I can learn what I need to without too much effort. When the need arises, I can dig in and rectify any knowledge deficiencies on demand. Then, when the project is over, I can decide to either push forward and learn more or discard the use of whatever new technology or technique I trid.

In the end, the most important thing is to learn enough to help my clients achieve a business goal or make more money. That very rarely requires the very newest thing and, by taking this approach, I actually get to spend time with my family instead of wasting it trying to keep up with the cutting edge.

What is your approach to learning new things and how do you find the time?

You’ve Got a Lead – Now What?

As a freelancer, you work hard to drum up new business: you have a great website, you’ve established yourself as an expert in your field, you run advertising campaigns targeting your desired market, and you put the effort in to find people who are interested in your services. Now what?

Filter Your Prospects

You don’t have much time for bad prospects – you’re too busy working on good projects! As such, the first thing you need to do is filter out the good leads from the bad. Basically, you want to eliminate conversations with prospects who want “Pinterest for dogs, but with a budget of $250.”

I’ve found that a good way to do this is to move discussion about budget and timeline to the forefront immediately upon receiving a request. Read through the prospect’s request, think about the project they’re proposing a little bit, and then immediately send over a rough price and schedule. Generally, I say something like this:

Based on your requirements and my experiences with projects like yours, you’re looking at a cost between $3,500 and $5,500 and a total timeline of 4-8 weeks. This is a rough estimate given the details you’ve shared with me at this point and will be revised as we move forward.

If you’re interested at this price point and that timeline works for your needs, I’d love to talk more with you about your project and possibly working together!

These three sentences are enough to weed out non-serious people while still endearing yourself to good prospects.

Ask a Ton of Questions

After you determine a project seems like it has a defined budget and schedule, its time to dig a little bit deeper. First, you want to determine the overall project goals. What would make the project a success and how can you help your prospect hit that milestone?

Next, ask if the prospect has thought about how he or she would like the system to work. Do they have a process they’re attempting to replace and they want to increase the usability? Is this something new for them and they want input on how to best accomplish their goals? Use your experience and expertise to make suggestions that you believe would make the system better and try to learn as much about your prospect’s business interests as you can.

Finally, try to capture the edge cases. This can be challenging, but time spent here will be totally worth it down the line. You want to catch the unknowns before committing to any work. Basically, try to document and ask every single “What If?” question that you can think of. Sometimes this helps the client understand that what they need is different then what they’re asking for. It will always help you understand what you’re getting yourself into.

I’ve talked before about fixed price contracts and how great they are if you can narrow down a specification to a known quantity. This phase of client communication is the crux of doing that.

Narrow the Quote and Make the Sale

Now that you have way more information than you had before, you can either give a firm quote on price and timeline or narrow the range considerably so you can start making the sale. If there are still lingering questions about the specification, use a range. If not, make a firm offer based on the value you think you’ll add to the prospects business and when you (realistically) think you can get it done.

If the response you get is positive, move on to a formal specification and get your deposit! If the prospect has some concerns about your quote, you should work to address them. Some possible problems and responses are:

Your price is too high (or we can get this done cheaper)
I believe that I’ve provided a fair price based on my experience and knowledge of your project at this point. If you’d like, we can work together to remove non-essential features from your project’s specification to decrease the price.
We need to get this done sooner.
Is there a specific launch date you’re trying to hit that I’m not aware of – perhaps an event that you’re participating in? If so, we can find some way to narrow the feature set and do a smaller iteration so you have a product to showcase. Alternatively, if you need to have the full product done by a certain date, I do offer rush pricing at 1.75 (adjust this based on current workload) the amount of my original quote.
How can we be sure you can deliver?
I’ve worked on previous projects of this size before and had great results. I can provide references and would be happy to direct you to my testimonials (which you are getting, right?)

Basically, apply the knowledge you’ve gained while working as a freelancer, know the value you provide to someone’s business, and try to work from a position of strength or as an equal to your client. When you’re a true partner, you’ll have a better project.

Sometimes, of course, there will just be too many obstacles and you won’t be able to work on a project or with a prospect you want to. Just remember there will always be new things to work on and let it go.

What’s Next?

After you make the sale, you still have work to do. You’ve got to get a formal proposal and Statement of Work to the prospect, get a deposit, and then work your process to reach the project’s goals. Those are all pretty easy once you’ve got the client on board, though.

So how do you handle incoming prospects and what do you do differently? I’d love to hear from other freelancers out there about how you filter the good from the bad and go on to make the sale, so leave your feedback in the comments!

Easy Freelance Financials

Disclaimer: I am not an accountant. This post describes my approach to finances as a freelancer and nothing more. It has worked well for me and I hope it works for you! For the difficult stuff, I recommend consulting a CPA for the hard stuff.

If you’re used to getting a paycheck, juggling your finances as a freelancer can be a little intimidating at first. Income is inconsistent, taxes aren’t taken care of for you, and you need to track your expenses to make sure you save every dollar you can when tax time rolls around. It took a little over a year for me to figure out a system where the mental overhead was low enough that I could follow it without difficulty.

In this post, I’ll outline some of the steps you should take when you first get started and then go through the approach I use to ensure that I don’t have any money worries.

Setting Up Your Accounts

Before you accept your first payment as a freelancer, you should set up separate business banking and credit card accounts. This makes it easy to keep your personal and business finances separate. This becomes very important when it comes time to pay taxes on your business income.

Getting business bank accounts set up is pretty easy. You need to register your business with the proper authorities in your jurisdiction (usually the Secretary of State’s office) and then bring your business registration certificate to the bank of your choice. You’ll want both a checking and savings account for your business (for reasons that will be explained in a moment).

Getting a business credit card is optional, but having one can be handy when you need to make a larger investment in your business then you can afford to do with your cash on hand. For example, you may need a new computer or need to license some software to perform work for a client.

I’ve found that credit card companies will send you unsolicited business account applications as soon as you register your business. My advice is to compare the terms of your available options and pick one. If you’re looking for a recommendation, I’ve had consistently great experiences with Capital One (now Spark Business).

Processing Business Income

If you’re doing business online, you’re probably going to be receiving payments in multiple forms. Some clients will pay via PayPal, others via credit card through a payment processor like Stripe, and some will insist on paying via paper check.

No matter how you receive your income, it should be moved immediately to your business checking account. Do not deposit business income into your personal accounts directly. If you do, you’ll lose the authoritative view of business income and expenses that your business accounts provide you.

Save 1/3 of Every Payment

Once your income is in your business checking account, my advice is to immediately move 1/3 of every payment you’ve received to your business savings account. Once you move that money to your savings account, consider it gone until the end of the year. In your mind, it might as well not exist.

This is a really, really conservative strategy, but it has consistently given me good results. Why are you saving this money?

First, a conservative saving strategy is good for your mental well being. While moving a full 1/3 of your income into savings may seem extreme, having this hard rule means you’ll spend less time thinking about money and more time working on and in your business. That should lead to more productive work in the long run (and in turn, more income).

Also, saving a full third of your income means, in general, you’ll never have to worry about having enough money to pay your taxes, whether estimated or actual. I’m not advocating paying a third of your income in estimated taxes, of course, but if you have a more successful year than you expect, you’ll be able to cover any amount due when you file at the end of the year.

Finally, by saving this much you’re bound to have a huge chunk of change left over after you pay any tax liability after filing. I like to think of this as my yearly bonus. Over the past few years, my wife and I have done different things with this bonus including going to Hawaii for a week long luxury vacation and bolstering our house savings as we prepare for home ownership.

Record Every Business Expense

If you’re freelancing, you are going to have business expenses. You need to host your website somewhere, buy software, buy hardware for testing, take clients out for coffee, and more. Every one of these things can be deducted on your tax return as long as you have appropriate documentation for them.

As such, you should record every business expense and pertinent details about it. Here’s the information I record:

  • Date
  • Amount
  • Category (rough, like “Dining” or “Advertising”)
  • Description of how it applies to your business

Not everything is deductible, but recording everything and filtering out the chaff later is a pretty good approach, in my opinion.

Use My Spreadsheet!

There’s lots of ways to track your financials, including some awesome online services. I prefer to keep everything offline so I track all my data in an Excel sheet I’ve developed that gives me a good view of my income and expenses throughout the year. You can download my income and expenses worksheet if you’re interested in how I do things. A fair warning, there are a lot of calculations in the spreadsheet so it may take a minute or two to open.

The spreadsheet is easy to use. Enter your income on the “Income” worksheet, including date, amount of payment, and an optional description. The amount you should save will be calculated for you. Use the “Expenses” worksheet similarly. Enter every expense, its amount, and an optional category and description. The “Totals” will show you your income, savings, and expenses for each month and for the year to date. I added a “Per Day” calculation so you can compare your income directly to your previous years based on the elapsed days in the year so far.

If you want to change the amount you save from 1/3 to some other amount, feel free to edit the appropriate cell on the “Helpers” worksheet.

If you’ve got any questions about the spreadsheet or anything else, or if you have some ideas about how to manage a freelancer’s finances, let me know in the comments!