I run a web design & development company so I have my $0.02 to throw in:
As for tools:
1. Without a doubt Adobe Creative Suite 3 Premium…it’s got all the tools you need (Dreamweaver, Illustrator, Photoshop, etc) right out the box. When you get a little more advanced you can check out Coda ( http://www.panic.com/coda/ ) for some advanced CSS editing & layout.
2. A good time keeping program (we use Harvest). Use it religiously. The biggest mistake any freelancer does is not track their own time. Your time is extremely valuable, more-so than at an established company as work at first comes in fits and starts and you need to spend a lot of time seeking out work, the more time you are out selling the less empty your bank account will be. I always found it helpful to visualize this like your time for a day as a stack of 3000 one dollar bills (if you bill $125 an hour x 24 hours for a day = $3000). Now if I came in and added up the little crap that comes in during the course of a day, random chain emails, pointless phone calls, and other distractions, it’d probably add up to an hour at least. Now if I were to go up and take $125 out of that stack for that time wasted, most likely you’d get pretty upset and for good reason. Take the time/dollars out for lunch + sleeping, you’ll realize that stack of $3000 is down to $1000 (assuming a 8 hour workday) and every non-billable task like sales calls, running errands, etc is cutting it down even further. Every second of a workday is precious and wasted time is a thief. Once you start tracking your own time in high detail it’s amazing how much your efficiency will increase. The main things you’ll learn are:
a) Emails can wait an hour or two (unless they’re time sensitive of course), your clients understand you run a business and have other folks to deal with. Stay focused on what you’re doing and setup periodic “check your email” times throughout the day and put it on your schedule
b) Same thing with voicemail, if you have someone else in your office, the best way to keep your sanity is have either someone screen your calls and take messages or have it go to voicemail while you’re working. One of the greatest things I ever read was in some business book where the CEO for a Fortune 500 company said what was his biggest way he increased his efficiency, he said “I only check my messages every 1.5 hours. Only 2 people have my direct office number that bypasses my secretary. One if my wife and the other is the President. The president only calls occasionally and my wife knows better than to call me at work. Nothing in my 30 years of business has ever not been able to wait 1.5 hours for me to call back.” Words to remember.
c) Don’t hand out your cell phone number to everyone, get a dedicated VOIP business line (its ~$19–20 a month) and list that on your business cards instead. This also cuts down on distractions on the road and your phone buzzing like a bumblebee during meetings as it vibrates in your pocket/bag as your clients call with just day-to-day stuff. You hate it, your clients hate it, its just easier to have everything centralized on your business phone at the office. And don’t worry about missing a call, check your messages on the road every hour or so. If anything I’ve learned is that if either it’s really important or really bad news, it will find you, not the other way around. You could be in the middle of the Arctic ocean and someone will charter a jet to find you and give you the message.
3. A copy of Quickbooks 2008 Pro. Just as important as tracking your time is tracking your money. I can’t stand it, I hate accounting with every inch of my being, but I cannot deny that once you start tracking your time (see Point #2) and input that along with how much money you’re making off a job, you’ll learn right off the bat if working with a client is “worth it” or if it’s putting you underwater. Looking at your P&L weekly (profit and loss) along with your balance sheet should be a weekly habit. As unpleasant as it is when you first start out to look at how broke (or how in debt you are), it beats seat-of-your-pants money management. You’ll also discover that about 30% of your clients make you 80% of your profit. Focus on that 30% and find more clients like them. Without time tracking and proper accounting you’d never know who those client were (if all comes together!)
As for procedure
paulc is right on the money with getting a good contract based on the guidelines he listed above, let me just add this point to it:
a) A good breakdown for payment is in fourths here is the payment schedule we use for all payments:
1. Phase I – Contract Initiation – 25% due = $x
2. Phase 2 – Sitemap & Wireframe – next 25% due = $x
3. Phase 3 – Site Interface Design – next 25% due = $x
4. Phase 4 – Final HTML design launch – final 25% due = $x
This is the only way we work and what makes me sleep happily at night now. Don’t lift a finger till you get a check. 25% due right off the bat either via check or credit card. Make sure you develop the site somewhere NOT on their site (we do ours in clients.ourdesigncompanynamehere.com/yourclient/). This prevents you from getting screwed and gives you leverage later on. After Phase 2, you get a signed approval form stipulating that any changes to any of that material from that point on will incur additional charges. They fax/email that back and send you the next check. You don’t do anything until payment clears. Same thing for Phase 3. For Phase 4, finish the site and get the final approval form signed saying it’s perfect. Payment is received and when it clears you flip the site on to the final live domain and you’re a happy camper and so if your client. You got 100% of your money and the client has 100% of their completed site. Sounds kinda harsh, but actually it makes your life a lot easier. If you do a lot of “net 30” billing, a good chunk of your time is spent chasing down outstanding invoices. Don’t start a bad habit, just avoid it all together by doing this. It also cuts down on the BS potential customers. You can’t pay, you don’t play. Saves everyone the aggravation.
b) When you first start doing this you’d think clients would bitch and moan, but thankfully they respect you more cause they know they can’t push your around and that you’re on top of your game. When you’re mercurial in your payment policies and think “the check is in the mail” is as good as it being in the bank you’re gonna be screwed when that slow month comes around and all you have to deposit at your bank is a stack of outstanding invoices.
c) Speaking of which, don’t do work for people who promise payment “soon” or “I’ll sign the document and stuff, just start working on the next phase, we’re good for the payment”. Either you get paid or you walk, no compromise. Ever. Friend of mines company worked on a $800 million real estate development that just blew up and almost got screwed out of $45,000 for work he did cause he accepted “net 30”, which turned into “net 90” and then turned into “we can’t pay you”. He took their promises at face value (“Hey, they’ve got a multi-billion dollar company behind them, they’re made of money!”) , only way he got his money was by getting his lawyer involved. The lesson to remember is that not paying vendors is most companies second line of credit which carries a 0% interest rate. Even when it’s a big company 99% of the time, the one you’re working for is a subsidiary of it so if it goes down the main company will allow the subsidiary to die and the vendors with outstanding invoices get screwed. Freelancers are the first to get screwed because 99% can’t afford a lawyer or the aggravation. You can avoid the problem all together with simply having cash a in/work out policy. Trust me, if they want the work done, they will cut you a check on the spot or give you a CC number. Every company can and does pay for stuff with both on location on the same date, don’t fall for the “but we only do net 30 payments and don’t have a company CC”....yeah, right…so how does the president of your company pay when he goes out and entertains clients? He’s paying either with company cash, CC, or a check, so that means he has no problem paying on the spot for service. If he think a $30 steak is worth paying for with the company CC, cash, or check, that means your company is willing to pay $X for your web site payments that way too.
d) Resell web hosting. The biggest challenge as a freelancer is getting a steady dependable steam of income that you can bank on, month in, month out. If you charge industry standard rates under your own banner you can make some great cash with only a few customers and doesn’t cost you anything until you get customers (and even then, you get guaranteed profit with only one customer). We provide this service, message me on my Fluther profile with your email/phone number (set it to private) if you want more info on it/how it works/have any other questions.
Sorry for the rambling response, just wanted to impart the knowledge that I learned the hard way over the last 5 years running my company. Follow these steps and you’ll spend the least amount time living the Ramen Noodle lifestyle and will be upgrading to steaks and champagne in short order.
Hope this helps.