At WordCamps and WordPress meetups, I come prepared to talk code but other developers seem more interested in my thoughts on business. It helps that I went to school as a finance major and have a few startup experiences under my belt.
I’d like to do more blog posts and conference talks on business/freelancing, but not sure exactly what I should talk about.
Do you have any topics or questions you’d like covered?
Chandler says
I’d love to hear how you handle project/scope creep. I read that you tend to quote flat rate projects. Which is ideal since the client is paying for value rather than time. But how do you handle the “can you also do this…” type requests? Even the ones that take 5 minutes can add up, but you don’t want to be the “that’ll be extra” guy either. How do you handle the process?
Bill Erickson says
Great question. The short answer is: keep the projects simple enough where this isn’t an issue. I require finalized designs and a scope document (which I write) that describes all the functionality. If the request isn’t in one of these, it’s outside of scope and extra. I’ll usually throw simple things in, but I try to be as clear as possible so I can reserve the right to draw the line once they go too far.
From the scope document: “Implementation of any complex functionality not already present in WordPress and Genesis, not easily implemented by available plugins, and not described here is outside the scope of this project.”
But at the end of the day, you’ll always end up with clients that are just more difficult than others. Quote high enough so on average it works out.
Jason Resnick says
In relation to the scope creep question, what’s the average time from when someone comes to you and says “I want you to give me a website” until development begins. Seems that if you have to get the design and then create that scope document, that you would spend a ton of time providing quotes
Bill Erickson says
About 50% of people come to me with designs already, so from initial email to development time just depends upon how booked I am (typically 3-5 weeks).
For the others, I provide a sample quote based on what we’ve discussed, and tell them I’ll provide an updated one once the designs are finalized. Hopefully a lot hasn’t changed, but if they have I have a chance to update the quote.
Jason Resnick says
Oh ok, so you pretty much have these “sample quotes” on hand ready to go and can fire them off at will without too much editing, correct?
I know that you said that you have canned responses, terms, contracts, in emails that you’ve built up so that you don’t always have to re-write them. It’d be awesome to see a list of those titles (not saying give up the whole content – unless you want to of course 🙂 ) – but I’ve got a list of canned responses as well, but most are for landing projects, quotes, and being out there in the social network game. But not so much for things inside the workings of a project.
Matt Felten says
In the same vein, how do you handle the timeline of scope creep? If you’re 3-5 weeks booked and the client wants something outside of scope, do you continue working on it even though you have other projects scheduled? Do they go to the end of the line?
Bill Erickson says
If it’s relatively small and I have the time in my schedule, I’ll try to get it done with the project. But typically it will wait until I have availability. I’ll say “my first availability for a project of that size is 3 weeks from now. Should we schedule it?” It’s up to them if they want to launch without that feature and then add it in, or leave it in dev for a while longer while they wait for me to get to it.
One thing that also helps is what I require to “get on the schedule”. I require a 25% payment of the project made before we can schedule a time. Before doing this, I’d have a lot of people who would book and then cancel with me later, leaving holes in my schedule. This way they’re more committed before booking a project and less likely to cancel. It also means I’m not booked up as much as I would have been (that 3 week wait they have now would’ve been 6-8 weeks if I didn’t require payment to book).
Jason Resnick says
Well, you obviously know some of the questions that you’ve answered for me. But I’m sure that others have had similar questions as me. Such as what sort of business structure and why? Maybe how to grow your business while maintaining a heavy workload, personal/business life balancing act, if it’s needed to get a lawyer/accountant/etc to help your business.
Bill Erickson says
More great questions. Difficult to answer the work/life balance part in a comment, but great idea for a blog post.
(Consult a lawyer, accountant, financial advisor, and anyone else you can think of before making business decisions like this. This is what worked for me) I worked for my first 5 years using a DBA, but at the prodding of my father (a lawyer), I moved to an LLC about two years ago. Biggest benefit has been the ability to get a SEP IRA, which lets me put away 20% of my income tax-free. This is only a good one if you don’t have employees because you have to give each employee the same amount for their retirement.
Jon Brown says
Self-employed/Freelance business knowledge is by far the most valuable thing I’ve gotten out of the WordPress community and particularly the OCWP meetup group.
Code review/advice are certainly valuable as is help finding a the right plugin. However, having come into this carrer from a much larger corporate entity the transition to self-employment (personally I have a pet peeve against mixing this concept with freelancing) has been a huge challenge eased tremendously by my WordPress peers. In that vien the thing I’m still most vague on is contracts, billing and payement schedules. Accounting advice is always helpful as well, even if it’s just “I gave up doing account and hired someone for $X, it’s saved me a fortune by allowing me to focus on work”.
Scope creep is a perennial issue in every bussiness I’ve operated in, so handling THAT actually hasn’t been too much of a challenge. Write a clear scope, be clear when someone wants something outside it, write a change-order/extra and get back to work. The challenge I find is explaining to clients what that interruption/change will do to the schedule.
Bill Erickson says
If you’re not good with numbers and don’t like keeping track of your personal spending, it might be a good idea to hire an accountant to handle it for you.
As a finance major, all accounting software bugs me and I just do it all manually in a spreadsheet. I have my General Journal where you write the date, account (ex: Revenue, Office Expense), description, document, and amount. I keep a running SUM() on the side so I can see how I’m doing for the month. At the end, I sort by account, then date, sum up each category and put it in an income statement.
That will make a great blog post, and I’ll share a sample spreadsheet with it.
Tim says
Financing the business
Brick and mortar shop versus at home business.
Shared space similar to what you have done (required space and features that would interest people to use the shared space)
There’s plenty m
Bill Erickson says
I didn’t/don’t really need any financing for the business. I work from home on my laptop. Anything I need (ex: got a new computer this month) is financed through revenue. Web design is a low cost / high profit business 🙂
Dorian Speed says
Would love to see more posts from you about how you run a successful freelance business. I know in your presentation to the Houston WordPress Meetup you mentioned that you use canned email responses in Gmail to manage the phases of a project – it would be great to hear more about that.
I also know you don’t do maintenance and I’m wondering how you approach that with clients. I am assuming best practice would be to “future-proof” your code as much as you can so that updates to WordPress, etc., won’t make things go wonky – but if you ever are in that situation, how do you handle it?
Bill Erickson says
Here’s a list of all the headlines in my quote: http://presentations.billerickson.net/managing-a-freelance-business/clear-communication-quote/
Other canned responses I have:
– Re: WordPress Development (description of the services I offer, how much they cost, and when I’m currently available to start)
– Designer and Developer recommendations, for when I want to pass on a project
– Project Start, which tells the client why they’re receiving an invoice (my payments are tied to project start), when they can expect the site to be ready, and some video tutorials to watch while I build it
–
Jason Resnick says
It would be awesome to have the Bill Erickson equivalent of Andy Clarke’s Gists (https://gist.github.com/malarkey) of Contract Killer and other key documents that you use. Of course without the specific $ figures and names, but sort of a template.
Bill Erickson says
I don’t have a project minimum for changes to past projects, so I technically do allow maintenance/small changes, but I try to avoid that work. I build the site so it won’t need much work (put on WPEngine for updates, build custom plugins that have the functionality client needs…).
When I am needed for changes, it gets added to the queue. Short changes can usually be squeezed in within a week or two. Larger changes are booked right along with site development, so it could be a few weeks before I can start on them.
I also have developers I recommend that don’t have project minimums, which might be better fits for small changes.
Dorian Speed says
That makes sense. I have been thinking about recommending WPEngine more strongly to clients, so that if a plugin update, etc., causes their site to go wonky, they can restore it easily and then contact me to say “How soon could you take a look at this?”
Annie says
What methods of free advetising have you found to be most useful in getting your business name out there when you first started? And cheap ones?
Bill Erickson says
The best free advertising is client referrals, but if you’re just starting out you won’t have that 🙂
What’s worked best for me is finding a niche where I can be one of the few experts. About 5 years ago I started building sites using Thesis, and I got a ton of traffic from their site. Later I switched to Genesis, and I still get most of my leads from them. It’s a great cycle: I build a site using Genesis => they put it on their site to show “what Genesis can do” => this sends me lots of prospects looking for the same thing => … the cycle repeats.
Find a company or type of company that would benefit from sending work towards a trusted developer. You might focus on a theme (Genesis, Sandbox, Thesis), a plugin (bbPress, BuddyPress, Gravity Forms), or a hosting company (WPEngine, Pagely, ZippyKid).
Annie says
That’s very helpful. I just started using Genesis and love what it can do. Incidentally, the first one was a lawyer’s site and it looks beautiful. He’s happy with it and a peach of a client. Hopefully that will generate some referrals. My first clients were all non-profit which I did pro-bono and the referrals were all, pro-bono. 🙁 Craigslist has generated some, but not enough. And although I’m working with Genesis now there are a lot of Genesis developers out there. I love the niche idea. Genesis + something… Any more advice?
Bill Erickson says
Take a look at Tweaky.com. I send people who have changes too small for me to take on over there. Not sure how many Genesis developers they have, but it’s definitely less than StudioPress.com. You might be the only one experienced with the theme so you get all the ones I send 🙂
Annie says
Thank you, that’s very kind. 🙂 Someone recommended Guru to me; I went there and found a lot of middlemen taking jobs dirt cheap who were not developers at all who then farmed the jobs out to people in India. It was a rude awakening. I’m sure the clients had no idea who actually did their sites, or why they were constantly breaking. Hopefully Tweaky will be different.
Amber @ Au Coeur says
Bill, for the ones that don’t have a design already, are you requiring a deposit based upon the sample quote or are you creating the design without taking a deposit? I do most of my designing as the website takes shape and find the design and development process to be very interwoven. Do you do your designs offline in photoshop or online in the dev site?
Bill Erickson says
If a design isn’t ready, I’ll provide a preliminary quote based on what I know (typically this is for my project minimum). They will then pay 25% of that amount to get booked. Once the design is finalized, I’ll update the scope and price to cover all the functionality in it.
I don’t do design at all. I request that the designs for the site be provided to me as Photoshop files.
Jean Galea says
This is one useful post! You should do more of these business posts.
Adam W. Warner says
Hi Bill,
Great topic for a post, and judging by the number of comments so far, something people need to know. I just took up blogging about our business development and it’s been a good way to both get advice and help people, and also to flesh out the thinking of how we’re approaching things.
I especially like your comment above about setting up an LLC and associated IRA, I’ll have to ask my lawyer about that. Our LLC is going to comprise of two managing partners, so the IRA may be out of our scope for the moment, but definitely food for thought, thanks!
Philip Downer says
Hi Bill,
Thanks for taking the time to manage and curate this discussion! I’d love to learn more about any general business “ah-ha” moments you’ve had during your career as a freelancer. You mentioned converting to an LLC and the IRA, which I’ll certainly be looking into. Any other thoughts from a methodology, finance or strategy perspective that, looking back, were game changers?
Bill Erickson says
I go into detail on how I manage my business here: http://wordpress.tv/2012/10/28/bill-erickson-managing-a-freelance-wordpress-development-business/
I can’t really think of any “ah-ha” moments. It’s a constantly evolving process. Every time you complete a project, look back at what you’ve done well and figure out how you can incorporate that into more projects.
Also look at what went wrong and how to prevent it (ex: calling it out in your contract). For instance, after a project where I spent 6 hours on the phone, I added a 1 hour limit to phone calls to my contract.