I’ve been a freelance designer in San Francisco for five and a half years. That’s meant a lot of things – I’ve gotten to work on great UI and UX projects, have edited hours and hours of video, screamed at render farms, wrote a book and taught classes on 3D animation. I’m far from the foremost expert on anything in my field, but I’ve been doing it for awhile and know the industry in a really strange way that people in stable, salaried jobs might not.
The most frequent question I get from friends and current or former colleagues is “So I just picked up a freelance gig – any advice?” After years of receiving that nearly identical email, it seems like as good of a time as any to assemble everything I know about freelancing in one place.
A couple of quick caveats: I’m a motion design freelancer, which specifically means that most of the people who will hire me are looking for someone who knows After Effects and Cinema 4D, as well as Illustrator, Photoshop, and a working knowledge of a handful of other pieces of software that help me do my job. Save for a couple of months, most of my experience has been in San Francisco, which is a different world from LA, New York, Chicago, or anywhere else. I think there are things about my experience that apply no matter your area of the country or your area of expertise, which is why I’ve put motion design in parentheses in the header.
Oh, and I want to make it clear, too: I’m a designer, not an accountant, lawyer, or agent of the IRS. I hope this gets you started and gives you things to think about, but this is just advice based on my experience.
What does “freelance” mean?
When someone tells you they’re a freelancer, it probably means that they don’t have one single, steady job. Freelancers rarely have one single desk that they report to at one single company every morning. “Contractor” often means something similar, but usually implies that they’re working steadily at one company for some duration of time. But people with regular, salaried jobs are also capable of picking up freelance work on the side. For some of us, it’s all we do. This is all to say that the term means nothing.
You can call yourself whatever you want when someone asks you about your job at happy hour, but when it comes to taxes, those words become a little more important. We’ll get to that soon. For now, keep in mind that “freelancing” likely means one of a couple of things:
- You work for a company, on-site, on their equipment (or in some cases on your own laptop), as a temporary employee, meaning you do everything you’d do if you had a full-time salaried job at the company
- You work with a company, off-site, on your equipment, which likely means the company took on more work than they could handle with their staff and decided to sub-contract a job out to you
- You work with your own clients, one-on-one, on your equipment, with no agency standing between you and the end client.
Sometimes the line is a little blurred between all of those categories, and some people feel very strongly about their roles in all of those different types of relationships. Freelancing isn’t so different from any “real” job – it’s important to know your role in the pipeline to prevent issues down the line. Are you going to be in direct communication with the client, or taking direction from someone at the company? What’s that person’s role? You might not want to think of your superior at the company that’s subcontracting to you as your “boss”, and they might not be, but understanding the hierarchy of how you fit in to a project is important no matter how you get hired or paid.
How do you find gigs?
Patience. Or, these things, listed in somewhat ascending order of preference:
Craigslist – There are a lot of problems with Craigslist. For motion designers like myself, there’s a chance that appropriate gigs will be listed in art/media/design jobs (most likely), tv/film/video/radio jobs (though be warned that’s also where casting calls and whatnot end up), web/html/info design (because in San Francisco there are lots of interactive firms that occasionally need motion designers and posts can end up here) or creative gigs (which is a catch-all section that will include “I need my hair done” as well as “I need a video editor for three weeks”).
The reason I don’t recommend Craigslist, particularly the gigs section, is that my experience has been that posters will highly undervalue your work. This is the worst offender of people suggesting that you should give them thousands of dollars worth of your time for free because it’ll look good in your portfolio. Most recruiters I know use Craigslist as an absolute last-ditch effort, because they know they’re going to get inundated with replies from people lacking the necessary skillset or experience. It’s kind of a crapshoot. But, frankly, gigs are gigs, and you never know where you might find something.
Consider setting up an RSS feed that’s tailored to you – returning anything in art/media/design that mentions your skill or software of choice, for example. And with any of these suggestions, keep in mind that the people who might hire you could be creative directors, fellow motion designers needing help on a project, recruiters or HR folks who don’t have your specific skillset and might use slightly different terms than you do.
Third party recruiters – I could write a completely separate overly-wordy post about the experiences I’ve had working with third party recruiters, but they deserve a mention here, because you will definitely end up interacting with some. There are a number of these companies in San Francisco, and the second you change that LinkedIn headline to mention that you’re looking for work, recruiters will find you and will invite you in to sign up with their agency.
The way it works is that you now have a recruiter on your side, so when a company contacts them and says they need a motion designer, they’ll go to their roster and look for an appropriate candidate to recommend for the job. It’s really appealing for companies to use these sorts of firms when they need a freelancer, because recruiting is hard work and it’s not always cost-effective to keep a recruiter in-house or to have other employees take time away from their primary job to find candidates to come on board for a few weeks. Some companies only use third-party recruiters to find candidates. Most of these firms work with companies looking for contract, contract-to-hire (you’ll work with them for a few months, and if it’s a good fit they may extend a salaried offer to you), or salaried positions, so know which one you’re ultimately seeking when you speak to someone.
If a staffing agency finds you a gig, you’ll technically be their employee, which can be great. You’ll likely be W-2 instead of 1099 (we’ll discuss the two later), and you’ll likely be paid weekly and immediately. The work you do Tuesday of this week will be submitted in a timesheet this Friday, and you’ll receive a paycheck next Friday. You get to skip all the potential frustration of invoicing and following up and being NET30 or waiting for their client to pay them before they can pay you – a shiny direct deposit a week after you do the work is pretty great. They’ll contact you when they have a gig that they’d like to submit you to, and while it’s different from company to company, most will have some sort of mailing list or website where you can see additional jobs they have open that might be suitable for you.
The way these companies make their money is by taking it out of the hourly rate for the job. So, for example, a company can afford to spend $90 per hour total, and the agency decides that means they can pay you $50 and keep the remaining $40 for their internal overhead. (Those numbers are completely made up and just for an example; I have very little insight into the algorithm that decides what percentage companies usually take.) Ultimately it’s up to the recruiting agency, not the client, to decide how that shakes out. I’ve had recruiters come to me with jobs that’d be great for me but the hourly rate is too low, and they make the decision to bump my pay up just a little bit because it’s still a good thing overall for their company if they can get me to take the job.
I’m not here to speak ill of recruiters, and I know some third-party recruiters who are very lovely people, but I will caution you to be careful. Especially when you’re first starting out, it’s really compelling to meet with everyone you can and get excited when they tell you that they’ve got all sorts of gigs that you’re great for and that they’ll keep you employed. I’ve had recruiters push the idea that they’re saving me money since I don’t have to take the time to look for gigs myself, which should totally justify making less than half my hourly rate that I make when I take jobs on my own. Their job is a balancing act – they’re working as your agent, but they’re also working as the client’s agent. Don’t be afraid to stand up for the hourly rate you know you need for your financial situation.
Industry-specific job boards – Often connected to popular websites for a specific industry, job boards can be great. Much more tailored and exclusive than Craigslist, and the mere fact that a gig is posted there proves that the company is up on what’s standard in the industry. Everyone’s got their favorites. I like Motionographer and Coroflot; there are many, many more. I keep a couple of alerts set up with Indeed, even though isn’t industry-specific, and have a filter setup in Gmail to redirect them to a folder I can check if I’m ever looking for work. (Incidentally, I also have all of the mailing lists from my various recruiters set up to go to the same folder.)
Word of mouth – This sounds a lot like cheating. I list it here not to say that my actual advice is “Oh, man, just wait for someone to think about you and you’ll totally get hired!”, but to say “keep in touch with people”. The industry isn’t as big as you think it is and there’s always work out there. Show up, be friendly, do good work, and people will remember you. I get emails all the time about gigs that aren’t quite right for me, and I’m always happy to recommend folks I’ve worked with in the past. We’re a chatty bunch, and we’re all better off if we can keep everyone working.
A note on “networking events” – I hate networking events. I’m no good at walking up to strangers and introducing myself and they just make me uncomfortable. I know that when I feel ridiculously uncomfortable, it’s probably evident when I’m talking to people, and that’s just never seemed like the best professional version of myself. My version of networking involves staying in touch with people I’ve worked with in the past, accepting happy hour invitations, and doing my best to always quickly respond to emails. It’s worked for me.
How do I get paid? What’s the difference between 1099 and W-2?
If you’re working with a company that routinely hires freelancers, chances are they have a system in place. Chances are that you’ll be hired as a 1099 contractor, but companies who routinely take freelancers for long-term contracts may want to hire you on a W-2 basis. There are legal reasons for each, and I’m going to wimp out here and point you straight to the IRS website if you want to further research the differences.
Something to be aware of with 1099 contracting versus W-2 is your liability for self-employment tax. Regardless of your filing status, your income is subject to a 15.3% payroll tax, split between social security and medicare. (12.4% and 2.9%, respectively.) Folks who are employed at a company where their taxes are reported W-2 split that 15.3% with their employer – you’re liable for 7.65% and they’re liable for 7.65%. When your income is reported via 1099, the company you’re working with isn’t liable for payroll tax, which puts the additional financial burden on you, referred to as self-employment tax. So you’ll ultimately make more money if you report W-2 (and most people find it easier to pay a little along the way as opposed to a huge sum at the end), but there are also benefits for reporting 1099.
I always advise people to try and get a little bit of both 1099 and W-2 work. Being a 1099 contractor allows you to expense things, which you will greatly appreciate the first time you drop thousands of dollars on a new computer. There’s no reason for you to pay taxes on the $3000 of your “income” you spent for the machine you work on every day. If you’ve got a dedicated room in your home that you intend to use as an office, you can expense part of your rent or mortgage. You can expense internet and phone bills. Taxes for freelancers are painful, so the more you’re capable of writing off, the better. And whatever you do, force yourself to save money along the way. Your first tax bill isn’t going to be pretty.
If you’re 1099, you’ll likely submit an invoice. Ask upfront what their payment terms are – NET30, while frustrating (because it means you’re waiting until 30 days after the job is completed to receive payment), is pretty standard. If you’re working on a longer gig, it’s not out of the question for you to invoice weekly or bi-weekly. Otherwise, imagine a six week gig – the work you do on the first week of January is invoiced mid-February, and you won’t receive payment until mid-March. For most freelancers, that’s a long time to go without getting paid. If you’re W-2, you’ll likely report through whatever their internal payroll system is, often what all the full-time employees at the company use.
How much should I charge?
That’s a personal question, and one that only you can answer. I’d love to give a range of hourly rates here, but the truth of the matter is that I have no idea what everyone in our industry charges. I don’t know what designers at any level actually make on average. I know what I make, and that’s about it. That’s terrible advice, right?
My hourly rate is personal to my expenses and lifestyle, and I have to assume it’s within the standard range for my experience level because I don’t get a lot of pushback about it. There are lots of salary guides out there if you worry too much about the number you come up with. For me, personally, I’ve got rent, internet, phone, utilities, and student loans. I don’t own a home, I don’t have children, I don’t have a credit card. The amount of money you need to stay afloat is probably wildly different from mine.
In addition to your expenses, consider your financial goals. Consider that you’ll want to set aside a liberal percentage of your income in preparation for your taxes. (I try to save 40% because I’m a paranoid monster and do a considerable amount of 1099 work; I’d rather be surprised that I had money leftover than freak out and find that I didn’t save enough. 30% is likely sufficient.) Don’t overlook your business expenses. You need computers and software licenses to do your job. Set a budget and then try to build in a cushion. No one is ever going to hear your hourly rate and tell you it’s too low – be prepared for the idea that people might try to talk you down, and consider what your lowest threshold could be.
Also, consider that you’re probably not going to be working full-time. In my entire career, I have never once had an entire year where I worked 40 hours a week. It’s difficult, as a freelancer, to always have your calendar full. This project or that will get extended, pushed back, cancelled. Booking one project that ends Friday and another that starts Monday is a guarantee that you’re going to run into problems with one of the two of them. You’ll figure out your own schedule and client management over time, but do yourself a favor and don’t base your hourly rate on a 40 hour work week.
I’ve only spoken about hourly rates up to this point, but let’s not neglect day rates. I’ve never once had a design firm ask me for a day rate – they’re much more common in video production houses. It’s a great way to estimate how much you’re going to make off of a job, and it’s easier for the company to estimate their overall costs. It’s also a really easy way to not pay people overtime – and I don’t mean to make that sound sinister, because I’ve been lucky enough to rarely have that become a problem. Most of the designers and editors I know that work on day rates base theirs on a ten hour day, because that will likely balance out over time. You might run into a few fourteen hour days and feel frustrated that you don’t make overtime, but it balances out after a few shorter days. If you get the sense that the job is going to be weeks worth of sixteen hour days and are worried about being adequately compensated, bump your rate up. You’re a freelancer; it’s your right to charge what you feel is appropriate on a project-by-project basis.
What about flat-rate projects?
Estimate high, or write a really, really explicit contract and be explicit about the scope of the project and what will happen if the client exceeds that scope. (Preferably both.) It’s so much more difficult to negotiate terms in the middle of a project; get all of that out of the way as early as possible.
My strategy has always been honesty and transparency, and I’m always happier with how projects work out if I’ve been upfront from moment one. When I’m asked to bid a flat-rate project, I always return a number with a detailed explanation of how I came to that number based off of my day rate and the number of days I think it’ll take to complete a project. For example, if I’m creating a motion graphics piece for a client who already has a script and a general idea of the desired look and feel, I might suggest 2-3 days for style board development, 3-5 days for storyboards, 10 days for animation and a few more days for anticipated revisions. That means we’re looking at around 18 days from start to finish, multiplied by my day rate to give a number that I’m comfortable with.
Giving all of that information does two things: One, it gives a clear overview of the project timeline, which is helpful for the client to understand the process and what they should expect. If you run into problems down the line, you’ll always have that timeline (and later, a contract) to point to. Two, it gives you a starting point for discussion if that budget isn’t in line with what they were thinking. If someone replies to your email proposing a budget that’s 10% of the figure you quoted, you’ve already laid the groundwork to politely decline the project.
That’s not to say that you should necessarily set a hard line when you propose a dollar amount and be unwilling to budge. I like to provide a range when I can, and if someone needs me to lower the bid, I reply by letting them know exactly where we’re going to shave those days. I can turn a project around for less money, but it’s going to be less animation, less time for storyboarding, etc. The creative process is a tricky one to understand sometimes, and I’ve always found that additional communication makes everyone feel more comfortable and makes for an easier client relationship.
But you don’t have to report all your income, right?
Don’t get paid under the table. Just don’t. I mean, if your cousin needs a logo design and you really like her and she gives you a six-pack because she’s broke but really grateful, okay. (Don’t tell the IRS I said that was okay. Re-read that part above about how I’m not a lawyer.) I’m not saying that your mother should fill out a 1099 when you design the family holiday newsletter. I am saying that if you quote a client a $2000 job and they offer you $1500 in cash instead, maybe don’t do that. I haven’t been audited and I have no plans to, but I assume it’s not fun. If you want to be serious about freelancing, just get used to the paperwork, and it’ll get a little easier every time. Insist on accountability.
Find an accountant. Someone with experience with freelancers, who doesn’t mind answering your panicky questions, who can handle your taxes and make sure everything’s okay. I have an accountant that I pay a few hundred dollars every April who answers my emails within the hour and has been absolutely integral to my career. I’m convinced that his knowledge of deductions and what I can and can’t claim has saved me money over the years. Just find an accountant and let yourself outsource something.
Lots of freelancers choose to file an LLC. I haven’t discussed it here because most of what I’ve focused on is working with companies, not taking on individual clients. If you’re always finding yourself working for others, you may not find it to be all that advantageous. If you’ve got assets to protect and are taking on clients of your own (rather than working through an agency), or routinely hiring other designers, it’s likely a good idea.
Some people have a huge preference for on- or off-site work. I like both. There’s something to be said for working cross-legged without real pants, but there’s also beauty in setting an alarm and leaving the house in the morning. Figure out a system that works for you. If you’re working off-site, realize it’s okay to walk away from the computer for an hour and get yourself a real meal and see the outside world. Email will wait.
Cut a demo reel you care about. Don’t make it too long. Create a portfolio that’s easy to update. There is no excuse in 2014 to have an unattractive portfolio. If you’re not a strong coder or web designer, use a service like Squarespace or Cargo. Keep your projects on Vimeo, too. You don’t have to spam every social media channel, but there’s no harm in letting folks know you’ve finished a new project.
And finally: I know I mentioned it before, but keep in touch with people. I sat in an office a few months ago with people I hadn’t worked with before, at a company that needed to hire a video editor for a project on a quick turnaround. Their regular go-to freelancers were all booked, so we started rattling off names of good editors we had worked with in the past. We were all surprised at both how many colleagues we had in common as well as how many names we didn’t recognize.
The way you can be that person someone else thinks of when they need an extra set of hands is to show up and do good work. Have just enough of an ego to know how to defend your work and not much more. Fight the battles that matter and let yourself compromise on the battles that matter less. Call colleagues you haven’t seen in a few months and ask them where they’re working and see if you can take them out for a drink after work. If you finish a job and someone asks you to keep in touch with them about your availability, they probably mean that and you should do it. If a gig comes up that isn’t for you, think of who you know that might be a good fit and recommend them. Be awesome and people will remember it.
Side note: Fellow freelancers, I would love to hear your stories and input on any of the above. One person’s experience is far from gospel. Agree, disagree? Let me know in the comments, shoot me an email (rizzo . jen @gmail.com), or give me a shout on Twitter @jrizzo.