[Sigia-l] Freelance IA consulting: Discovering the cost of doing business

[Eric Scheid]

From: David R. Austen <dausten at hoosier.net> (8/6/02 6:11 AM)
>Do the IAs on this list have any interest in a thread on the cost of
>doing business -- what it is an IA needs to bill out each week (for 50
>weeks) just to keep ones head above water? 

Firstly, don't go freelancing with the expectation that you'll be billing 
50 weeks of the year. You won't be that lucky. Remember, as a freelance 
you only get paid when you issue billings, you don't get paid just 
because you show up at the office.

* Take a close look at an calendar and add up all the public holidays ... 
sure you could work those but it's better to keep them in reserve. In 
Australia, we have about 15 days of public holidays (christmas, new 
years, easter, queens birthday, anzac, picnic, etc etc). Fifteen days = 
three weeks of billings you don't get.

* Decide on how many weeks of vacation you want. In the US you might be 
happy with 2 weeks, elsewhere saner heads rule and we prefer 4 weeks.

* Realise that the time you spend attending seminars and summits is time 
you won't be billing anyone. Set aside a number of days for training.

* Allow for some economic down cycle time. Clients aren't always lining 
up to spend money. When other businesses close down because it's quiet so 
do you.

.... and so on. The short answer, taken from other freelance consulting 
industries, is to figure out how much you want to take home, assume 
you'll only be billing 20 hours a week for 40 weeks of the year. You 
might stretch that to 25 hours. If in fact you do better than that then 
you're in the gravy, which is where you should be if "things are going 
well", as distinct from going gangbusters but still only breaking even.

Only 25 hours per week? Remember that you're the one doing the 
secretarial work, you won't be billing for basic local travel time, you 
won't be billing for pre-sales time, you won't be billing for 
sales-negotiation time, you won't be billing for bookkeeping time. It all 
adds up, and even when it doesn't you'll still find days where you've got 
spare time on your hands (maybe a client cancelled, or a project finished 
early) and you don't have any work lined up.

Adjust those hours up or down depending on whether you want to take it 
easy or be a maniac.

e.

______________________________________________________________________
eric at ironclad.net.au                 i r o n c l a d   n e t w o r k s
information architect                      http://www.ironclad.net.au/