Need advice on freelancing as a developer

Hello guys,

I'm considering to take up freelance software/web development. I could use some opinions from people who are already doing this so I can find out whether this is a viable and realistic option for me.

The biggest questions/topics for me are:

1) Who am I going to sell my services to (and how do I find my clients)? Is it possible to start out with freelance sites like elance, guru and so on and then start getting references from there? Are there other ways to find clients online? Should I use forums (like this one) to offer my services? Is the market for software development big enough so that there's a reasonable chance of getting in or is the competition so fierce that you have to be either exceptionally good at what you do or be exceptionally cheap?

2) Looking at those freelance sites, there is only a small number of buyers who pay a decent price. I think I'd need to charge at least 30-40$ (and about 80 billable hours/month) in the medium term to be able to live off it (i.e. I would need to reach that rate within a year or so from now on; in the long term I would probably need 50$ or more), so those sites are only an option to get started and to build a portfolio. What would be the best way to go about get clients who aren't only looking for cheap work? I have no problem to work for low or no pay for a while in order to get there. I don't know though how I would discern people who just want a one-time job done for free from those who have more promising projects coming up and who are just interested in testing out developers without too much of an investment to start with. I'm a bit concerned whether I might end up doing a lot of volunteer work but getting no references from those efforts.

3) What should I specialize on (or should I specialize at all)? Up to now I've looked at quite a few things and then decided to focus on doing web applications with Python and Django. I'm also fairly confident in my abilities to use HTML/CSS, JavaScript and I have been looking into Photoshop too. I only have limited experience with e-commerce and the big CMS so far.
Any recommendations what I should focus on next? (I already have a formal education in CS and experience with a number of programming languages)

4) Concerning a portfolio: should I try to build applications that actually go live on a domain for a general public (even if I have no uniquely useful ideas)? Or is it enough to build example applications which demonstrate a number of features (also: what kind of features should I include in a portfolio?)? The former would require a lot more effort, however it would probably look more convincing too. And there is at least a small chance that people would actually start using my applications.

5) Should I set a deadline until I try to establish myself as a freelancer and how much time should I give myself?

I really need to get clear on whether I should pursue this path any further or whether I should cut my losses and find another solution. Up to now my plan was to build a portfolio with sample applications/sites that I build on my own or that I do for free/low rates so that I can later get referrals and clients who pay better. Plan B is to do the same and impress potential employers enough so they might consider hiring me. I also have no idea whether this might work out, whether this would then count as relevant work experience. But I guess that would be another topic.

Is there anyone out there who is a web developer/IT freelancer who would be willing to mentor me a bit? I don't know what I could offer in return, but I'm kind of stuck, so I'll just ask. I think I could really use someone experienced looking at where I'm at and helping me evaluate my expectations and maybe plan my next steps.
I could also use some feedback on an application I built for demonstration purposes. Please contact me via PM if you would be willing to help me.

Thanks very much for reading and any answers!

plentyofz

For a freelancer there are several absolute musts:

1) Portfolio - You need pieces of work that are eye catching, easy to understand, and work very well. Without these, selling will be difficult, and the rate you can reasonably charge will be significantly lower.

2) Project Plans - You absolutely must understand how to manage a project. Starting with your initial contact with your clients, you need to establish procedures for various aspects of the project (how you'll get image assets, when they can test it, when they pay you, etc). You need to set expectations early and frequently, and you need to make everyone involved understand the plan and the schedule. Without this, you will be jerked around by clients forever at your loss. As a freelancer your time is incredibly valuable, make sure people understand this by structuring your engagements.

3) Discipline - Stick to your plans. Not just your project plans, all of your plans. Your marketing plan, your plan for updating your portfolio, your plan for reading and learning more, your plan for food shopping so you have a stocked fridge. Schedule your time, plan your short-, mid-, and long-term goals and focus on getting real tasks on a list and start crossing them off

4) The 7 Habits - Go and get The 7 Habits of Highly Effective People and start reading it and rereading it, starting with the first 3 habits. This is not a feel good self-help book. This is a thesis on developing the necessary character traits to be a successful person at whatever you do, whether that's selling software, hiking every mountain in the world, or growing dreads and playing in drum circles in Asheville. It happens that the book is written from the perspective of business, but the information is universally applicable. Focus particularly on the section about the balance between Production and Production Capacity (production being getting the work done to get paid, production capacity being the search for more clients and projects to ensure you have work to do). This balance is incredibly difficult for freelancers to manage. Figure it out.

5) Save - Save absolutely as much money as possible. You want to be able to get to a point where it's possible to lose money for 3 months and still be able to pay rent. You won't see why right now, but you will as your freelance life takes off. Get that safety net and keep it growing. Big checks seem like great times to celebrate with a steak dinner. Don't do that until you've got 3 - 6 months of living expenses saved in the bank. Never touch that money for purchases. Keep it in a separate account and feed it regularly.

Now, onto your questions:

1) You will sell services to anyone that will buy. Anyone. Find local businesses in your area. See if you have a freelancers union. Contact your local chamber of commerce. Find websites for local businesses that suck and offer to update them. Create business cards. Find networking events in your area and go to them. Pass out cards. Talk to friends and family and have them keep an ear out for opportunities.

2) Set a rate for your services. Stick with it. Don't be flimsy with your rate, don't offer to do things for free if they don't want to pay you. If you want to do something for free, go in saying that. Don't start with a rate and drop it to $0. You demonstrate value by stating your value. Of course negotiations happen, but stick to a reasonable rate. You will get feedback about why they won't pay you, or they'll pay you. If you want to build your portfolio, volunteer to do some work for a non-profit you care about, and make sure you limit the scope of that project or you will get abused and waste a ton of time. If you can, try to define the project before approaching them with it.

3) Specialize on what people say they need. Get a feel for the market. Offer services people want. If you find your potential clients all need CMS or e-commerce or flash, go learn those things and offer it to them. Also, refer to my above point about planning. Figure out what you want to learn in the long-term, put learning it on your to-do list. Otherwise, you will only ever learn what other people need you to learn and not what you want to learn.

4) Build your portfolio any way you can. If you have the time, build simple things that others can use. If you don't get some clients, do the work, and link to the finished result and say you did it. Anyone who wants to verify will easily verify it by calling your client and asking for verification. Pull the reference if they update it without you to avoid looking like a moocher. Focus on pieces that are portfolio worthy. Don't put everything you do up there, only the ones that you can impress people with. Go ahead and include a client list as well.

5) If you have the nerve, do it. If you want a comfortable easy life, get a job. Freelancing is not for everyone. It requires you to do sales, project management, technical writing, presentations, billing, office administration, and programming all at once. You can do it, but don't imagine that just being a good programmer is all you need to be. You're starting a business, not getting a job without a boss.

Good luck!