Should you concentrate on a particular niche or have a more generalized knowledge base and skill set?
One of the most common questions beginning freelancers ask themselves is, “should I be really good at one thing or pretty good at many things?” The answer is – you guessed it – it depends. There are advantages and disadvantages to both specializing in one area and having more general knowledge in several areas. Here are the main pro/con arguments.
1. Underestimating time & project costs
Skip the frustration by learning from my biggest mistakes as a freelancer
Underestimating time and project costs is easily the biggest mistake I’ve made, and also the biggest mistake freelancers make in general. Why? Because it’s extremely difficult to calculate how long a project will take when you haven’t completed a similar project in the past to use as a reference.
I’ve found that the largest “unknown” factor that consumes much more time than I expected is communication with clients and making countless revisions and minor changes to a project.
I believe the only truly effective way to produce more accurate estimates is to carefully track time on projects now so that in the future, when you have projects similar in scope, you have some real, hard data to use for calculating the estimates.
2. Accepting equity (shares) in startup companies as compensation instead of hourly compensation
Here’s a brief snapshot of my freelance business, SimDex LLC.
- Services offered: IT consulting, training & support and
website design, development & administration
- Founded 2004, established as LLC in 2008
- Client base in Minneapolis-Saint Paul (mostly)
- 120+ clients, 20+ regulars, 15 clients = 75% revenue
- Over 50 websites designed, developed & administered
- 3 Apple Certifications (ACHDS / ACDT / ACPT)
- Partnerships with two companies: Gogiro Minneapolis & The Nerd School – referrals & commissions
- Offered equity in 4 startup companies; declined all
- Send invoices at end of each month
- Payment policy: net 21, $50 late fee + 1.50% monthly interest
Learn More About SimDex
These are some of the most important lessons I have learned as a freelancer:
- Understand the big picture and the little details (they’re both important)
- Take risks, but have well-diversified income to limit risk
- Customer service is key (communication skills = good)
- Don’t be too specialized; have a broad knowledge base (you can always look up little details)
- Be extremely resourceful (if you don’t know, find out)
- Get good at creative problem solving (think outside the box)
- Always overestimate time & costs (build in a buffer)
- Sign a contract and/or require 50% upfront for ongoing projects with new clients
- Get good at bullshitting*
* I will explain what I mean by this in an upcoming post…