If you were really a "freelancer" or "consultant" instead of a contract developer, you would have these relationships yourself. You would be able to convince your clients to cut out the middleman and pay you $100/hr instead of paying me $120/hr. But first, you have to build that trust with the people ultimately paying for your services. This generally means upping your game with respect to salesmanship, which isn't something you can "hack". It also means turning down opportunities that may pay well, but don't offer any opportunity for building relationships.

> clients don't pick up the phone and call you because you do good work, they pick up the phone and call you because they remember who you are and like you

People want to work with people they like (and to like them they first need to meet them).

They'd rather work with people they like, that do good work, than people they like that do bad work, but given the choice, they will pick people they know and like, that are mediocre, over "superstars" that they don't know and/or don't like.

Which means

- if you don't have direct access to the final ("real") customer, you're mostly wasting your time

- extra hours spent turning out stellar work would be a 1000 times more productive/useful getting to know your clients on a personal basis

- relationships with "customers" will only last as long as the people you're interacting with stay at the company; when people change companies, it's sometimes more effective to follow them to their new home than try to build a new relationship with the new team at the old company

- intermediaries are vampires; do not go near them. They fear light: expose them and they will flee.

I'd recommend reading The Trusted Advisor [1]. It was originally written with management consultants in mind, but it is a good guideline in general for how to walk the line between personal and work relationships. Basically, you should look at your clients as you would a friend: be their friend, know their problems, and help them with those problems. Become invested in them and their success, and they will invest in you. Business is ultimately about people, but I feel many technical workers focus on the technology and get screwed over as a result.

My aunt knows a sh*tload of people but doesn't get any jobs.

Spot on. This is the hard truth.

My experience has been similar this week. I was in a situation to decide between Opportunity (with Higher rate) vs Opportunity (Building relationship). Glad I chose the second option.

There is truth in this, in that knowing people is a prerequisite for getting to the higher tiers of income. If you don't know people to get good gigs, you will inevitably have to go via one or more intermediaries who do, and they will all take a cut. How much of a cut depends on your business skills, not your technical skills.

A related but distinct issue is that clients who hire via agency-style intermediaries tend to have a ceiling on how much they are willing to pay, much as employers do. Even if the quality of your work would fit above that ceiling, it will be almost impossible to break through as someone else's hired help or as one freelancer among many on an agency's books.

1. Jim Camp's negotiation book, "Start with No": http://www.amazon.com/Start-No-Negotiating-Tools-that-ebook/... One key takeaway: You can refuse to compromise on your rates, provided that you can afford to walk away if necessary.

2. Patrick McKenzie's (patio11's) advice for moving beyond the "freelancer" title, in particular http://www.kalzumeus.com/2011/10/28/dont-call-yourself-a-pro... and http://www.kalzumeus.com/2012/09/17/ramit-sethi-and-patrick-...

This is very important advice, and I've applied it to car purchases, condo lease agreements, cable and phone contracts, you name it.

It's about leverage. If you have alternatives, and what the person on the other side of the table offers doesn't fit your needs, take your business elsewhere. You have to be prepared to leave or say no.

The key is the perception of the other party, not the actual reality of whether you can say no or not.

Robert Ringer's amazing (and must read) book, "Winning Through Intimidation." Talks about how he manufactured the perception of being able to walk away, and why image and perception are more important than actual circumstances.

It's of course much simpler to play the part of being able to say no, when you can actually walk away...but you can hack your own perception to believe you can walk away even if you can't, and pull it off... or you can be a good actor and take some risks...

My favorite quote from the book is...

"I didn't mean to cut off your hands, but I had no choice when you reached for my chips." This is his argument for DEMANDING a contract for every business deal, especially with friends or people you trust. (I admit I am not great at this...)

He opens with a theory that most successful people who claim "hard work and a positive attitude" drive success are lying. They are either too embarrassed to admit how easy it was for them...or they can't see the forest from the trees and really have no idea why they are successful.

He has a few key points that really stand out for me...

"The results you get from a negotiation are inversely proportionate to how intimidated you are."

"With every deal...The key is to hope for a good result, but expect a negative one. (otherwise you will get discouraged way too quickly and give up.)

Image is everything... "It’s Not What You Say Or Do That Counts, But What Your Posture Is When You Say Or Do it."

I wrote a few blog posts over the years about his book... http://www.davidmelamed.com/2012/11/19/robert-ringers-theory...

http://www.davidmelamed.com/2012/11/20/i-really-didnt-mean-t...

http://www.amazon.com/Winning-Through-Intimidation-Robert-Ri... (Non affiliate link)

UPDATE:

I actually have a Prime account and Kindle so I was able to read the book for free using the Kindle Owners Lending Library.

http://www.amazon.com/Winning-Through-Intimidation-Robert-Ri... (kindle edition link affiliate free)

I highly recommend Winning Through Intimidation. It's not about what you think. I read it after someone else recommended it in another discussion on HN.

http://www.amazon.com/Winning-Through-Intimidation-Robert-Ri...

Some random things I learnt from the transition :

- The most interesting projects rarely (mostly never) relies on a one person "team". Big projects are important for the customer and they need to know they will have someone to contact even if it's holiday time. You want the true customer to buy from you interesting projects : don't be alone.

- Once you have a team, you will look for interesting projects. They are more complicated to get. They often come from medium / large organization. Those orgs. have important inertia. Projects can take weeks of month to start. Chase multiple projects at the same time.

- Once you have bigger project you must learn to make precise time evaluation. It is really complicated. It must be done before the project is sold but you must not spend too much time on it. It is key since you want to earn money (no brainer) but mostly to have a smooth production calendar.

In my case, we are just a team of two. I spend half time in sales activities and the other developing websites. My coworker is full time dev.

If you want to discuss in details, reply here or email me : paul@agence-donatello.fr

   * join a team (as a contractor or as an employee, and take the rate cut)
   * build a team (and move from development to project management, at least part of the time)
   * become a 'name' in an area and become a true consultant--specialize, but don't pick the wrong area, or if you do, be prepared to switch gears.  (You didn't have this, but I've seen this work as well.)

A few of the most successful freelancers I know have formed 2-3 person partnerships. All of the partners were individual freelancers before, but teaming up allows them to tackle bigger projects, and reassure clients that a holiday or sick time won't stop their project.

Otherwise you will hire the cheapest labor -which is yourself...and you'll never break free of being a freelancer.

My personal advice...the reason raising your rates isn't working for you is because "you don't get the work." This is key...if you need the work, you will never successfully raise your rates.

I have fetched $350/hr for SEM consulting...when you can easily hire an experienced pro for $50 and someone more experienced than me for $175. How do I charge that much? It's simple. My opportunity cost let's me turn down lower paying gigs.

"The power to destroy a thing is the absolute control over it."

   - Paul-Muad'Dib to the Guild navigators, at his confrontation with the Emperor Shaddam IV.

Well said and always works. In every business.

I found that the key was to find clients who value your work. Working with individuals or small businesses can be tough because they are usually highly constrained by budget and do not understand everything that goes in to what you do. They want freelancers because they can't afford full time people. They will compare you to the rates they can find on Craigslist or Elance and balk when you require market rates.

Instead, find startups with technical people doing the recruiting or large companies with established roles and processes for freelancers. They will at least understand market rates and what you actually do.

I've also found this to be very true.

1. At university there was a billboard for people looking for developers.

2. Responded to everyone, with a ridiculously low price of $25.

3. Completed first job with flying colors. Collect glowing reference.

4. Stitch up reference on to personal website.

5. Hike price by 50%, find next client.

6. Rinse and repeat.

I got up to $100 per hour for some clients[1], or $450 per day for other clients, before I finally found a full time developer job.

I'm glad I did this freelancing thing because my company knows I can walk any time and make 6-figures on my own.

I still get pinged by my former clients about new projects and refer them to friends.

[1] (I was offered $115 one time but I felt that was too much of a raise - I priced myself at the highest possible rate where I am certain I will receive a glowing reference. And glowing references means raises.)

People have suggested building our own product. That is all well and good, and honestly at some point you will want to stop selling your time because your time is finite and can't be scaled. That's when product development becomes more attractive. But if you are still having fun writing other peoples stuff and just want to get out of a rut and increase your rate then you can do that.

Someone came to me 2 weeks ago with a clear idea of copying a website, because her business was in the same market. We finally met 3 days ago about her project, and she told me she has seen 5 freelancers and 2 agencies for her website, but she still wanted to speak with me because she wasn't decided yet.

The first thing I asked her was: "Can you explain me about your business ? And what process the customer is going through ?". Then we went through a pleasant hour-long brainstorming phase, until she realized her point was totally different from the existing website she wanted to copy, and that we ended up with a way better and more suited solution for her. She surpisingly said : "You're the only one that asked me those things, and I loved it!".

Then I asked her how it went with those 7 other clients and she told me nobody cared about her business, and how they only seemed to want to get the contract, at any price. Even though some of them looked professionals, she wasn't sold.

After this meeting, I understood that a freelancer shouldn't be positioned as an "expert" sitting at the opposite of his client, but as someone sitting alongside his client, as a friend caring about their goals. When you're the right person, your time is invaluable, and your price will be the right one.

How good are your communication skills? In consulting/freelance/contract this is huge. You will never be able to charge as much as someone who has great rapport with the customer, articulates points in a clear way, and shows understanding of the big picture goals.

How big are the companies you work with? As a rule of thumb small companies are not usually paying the highest rates. Small companies have more interesting work, but pick your poison.

What percentile are you capabilities in? This requires some brutal self honesty but usually it's harder to get top rates if you are not at the top of your field.

Do you try to work remote? Jobs usually pay more if you are willing to stay on site most of the time. Hate this but it's true.

Do you have an impressive portfolio of work to show? When people see it do they "ok, thanks", or do they say "wow that's really cool"?

Edit: Wow. In the small sample on Audible this guy already mentions something I've seen over and over with the clients I work with.

When you start your company you go from employee to business owner. But your mind stays in employee mode. You keep doing your job just like an employee. You get over worked (those 80 hour weeks) and never thrive.

You simply build your brand, including a website, a blog and attract people to it. Get known widely (by having content that people share) and deeply (through good work and referrals). This takes time to build. But it's like any other brand.

Basically, you need a brand, and cultivate relationships. Probably the best two pieces of advice I can give you are:

1) Make it safe to fail, so you can iterate and try better things. For example, have 100 users and only try a particular pricing or offer with 5 of them. A/B test various website designs, email marketing strategies, etc. Partner with one or more business developers who are passionate about client relations, and give them % of PROJECTS, not the company. This way, if anything fails, it doesn't bring down the whole thing. And you can do this "all day" because your expected value is always nonzero, so the more you do it, the more you get. You can even hire others to do your job for you - again, on commission. Like 2 levels of MLM.

You're being nickel-and-dimed because you don't value yourself enough. Stop charging hourly rates and stop working for middlemen.

[0] http://www.kalzumeus.com/2011/10/28/dont-call-yourself-a-pro...

1. Go to technical meetup/groups relating to technology you're interested in. Get known in that community.

2. Go to technical meetup/groups relating to technology you're NOT interested in. Get known in the community. With PHP and Java skills, I go to the .NET group a few times a year. When some of those folks I network with need PHP, I'm the first (and sometimes only) person they think of.

3. Go to industry group meetings that relate to a particular industry you want to serve - education, govt, manufacturing, retail, etc. Learn who's doing what, what their terms are, etc. Start making connections there.

4. Go out of your way to connect people in your existing network who you think might be able to benefit each other. Invite them for a mutual coffee, make introductions. See what happens.

5. If there's not any sort of meetup in your area that doesn't cater to your interests, start one, and publicize it. If it's successful, you'll be one of the 'go to' folks for that topic in your area.

There are many other steps and paths to follow; this is just one I point out to people.

Specialize and partner up. If we use a webdev for example, he might specialize in marketing. Shopping cart platforms, Survey/Forms software, SEO/PPC agencies, basically everything that tangentially touches web development in that particular field. Instead of marketing, you might try HR and go for Companies that resell Sharepoint, Alfresco, Opentext, recruiting agencies, etc. The possibilities are endless.

Carve out a niche that has well-paying clients. Do some cool stuff on your website to showcase your skills. Start outreaching for companies in that niche. Keep in touch with them and mention from time to time that you're looking to build a clientbase. Referrals and/or subcontracts will fly your way. You will also get visitors on your site from SEO/social. In the meantime, you can straight-out cold email target customers with sales literature. It might sound silly, but it works if you're smart about it.

But what you described is another part of networking - finding other people in the field who can get you work, and becoming a partner to them - either for direct referral or subcontract work, or just pre done services.

Niching is certainly my recommendation - one of my points was to find a particular industry you want to serve, then focus on that - f2f meetings in that industry is just one aspect of it (but can also open a lot of doors quickly - one mention from a f2f contact 2 weeks ago turned us on to a whole network of related professionals that need a service we're working on).

For me, life did not really get easier until I had a roster of clients that wanted repeat work - either as a formal retainer, or just a somewhat regular billing amount each month.

Rate hike was one technique which rid me of a client that was too much hassle, but as you know it takes a lot of guts to let go of a paying customer. You claim that raising your rates led to losing work. You do lose clients when you raise rates, that is the point. You don't want to employ this strategy if you have zero clients who are willing to stick around at the higher rate.

Bugs I find can save clients millions. Others firms in the industry charge 200-250 but I truly don't care - they don't have what we have. Find your niche.

Alas this also means that I often need to actually turn up to the clients office.

Working though an agency has similar issues, as you describe, but let's face it - no-one likes paying their bills or pay the full whack for stuff.

It's just the cost of doing business.

2. Help each other find new clients and pool your incoming work.

3. Hire subcontractors for the little stuff that piles up.

A contract programmer will write a software package, whether for an hourly or a fixed rate.

An example of consulting I've actually done, is that a client flew me from San Jose to Albuquerque to look into why his programmer's application repeatedly crashed. After an hour or so of discussing it with him, I determined that his custom memory allocator was not respecting the alignment restrictions of the CPU.

First of all, pick a niche industry and own it. Too many agencies I see are just out to make money by developing as many apps and sites as possible. This means a lot of cold calling into different industries and talking to a lot of different people with different needs. If you stick with one industry, pretty soon, you'll find areas where you can really start to focus. This in turn makes you valuable to not only business, but then your name starts to get passed around since you have specific ways you're helping other people in that industry. Less cold calling and more referrals is what follows then. I would also start locally, get as many customers in your local niche then broaden out, go regional, then national.

Secondly, the one thing that has made my agency successful is minimizing overhead. It's basically me and my partner. We work from our homes, but are in constant contact with each other (technology is great ain't it?). This means, no employees to pay, no office rent, no heating bills, no additional hardware or furniture. It allows us to keep our rates fairly low and still have a very nice profit margin since we have so little upfront costs. This also benefits our clients since it saves them money too.

Lastly, I use a progressive billing system. I start out working with my clients on an hourly rate - mainly doing consultation work. Then once we start having steady work, I go to them and say, "Hey, you're paying a lot for my hourly rate since and we're always doing work for you, why don't we just set up a monthly total (a 5-8% discount off my hourly rate) with a minimum of hours I need to work for your company each month and go from there?" 90% of our clients have switched over to a monthly or yearly billing subscription. This is a biggie since you don't have to worry so much about where your next project is coming from, you can really focus on your clients and know you have a steady stream of revenue coming in. This also allows you to continue to cold call and bring in new business - makes a huge difference compared to working project to project.

1. Word-of-mouth.

2. I do grant writing for nonprofit and public agencies, and we occasionally get pitches for the "true client," and we always tell the would-be middlemen to just send the true client to us. This almost never happens, and in reality there is rarely a true client, and even if there is the middleman won't pay our rate because we're already near the top of the market (see point 4).

3. You might not be able to move beyond "freelancer" without getting a conventional job or starting a startup.

4. If you can't find a way to charge more you may have found the market rate for what you're doing and who you're doing it for. In my consulting firm ~$200/hour is the top market rate. We can't functionally charge more.

5. I don't want to be a jerk, but I wonder how your sales and marketing skills rank. I wrote more about that issue here: http://jakeseliger.com/2014/04/07/how-i-learned-about-assert.... In many small consulting firms, sales and marketing are at least as important as product. Have you thought about hiring a business or voice coach? What's your sales funnel like?

I do know that we're in the process of hiring a firm to re-do our website, and we found a couple through http://wpengine.com/partners/ and one through our ISP. One guy we sent an email to, and he said he didn't talk on the phone. Not surprisingly he's off the list: If he's that uninterested or busy before we send him a lot of money, what's he going to be like after?. We found an outfit named Orange Blossom: http://orangeblossommedia.com/ that has an impressive portfolio, and they seemed to understand the non-standard stuff we needed. CohoWeb: http://cohoweb.com/ is another favorite, and they came through our ISP. In both cases their sales guys were efficient.

Clients often have a hard time evaluating consultants. That's one reason we've been writing a blog for the last seven years: We're professional writers, and the blog does at least show that we can write, and it also attracts a lot of potential clients via search traffic. How are your clients finding you?

Know your worth. Be increasing your rates ever 6-12 months based on how much learning you've accomplished.

I founded Glass & Marker (www.glassandmarker.com) with 2 creative directors who were tired of being paid low freelance rates, and working at big agencies who stepped on their ideas. Today, we've been in business 4 years, and we have a strong portfolio of tech clients (including over a dozen YC alum companies!), and a much larger team. I helped my partners by building business infrastructure; a strong and profitable vehicle to make content for our clients.

My business partners and I complimented each other because they wanted someone to run the agency who knew how to (1) generate new business (2) negotiate (3) ride the delicate balance of client management and enforcing the rules of the SOW (4) manage employees and (5) identify new areas for growth and scalability (expanding services, hiring, pricing, etc.).

My advice would be to find your business counterpart. Let him or her handle all money, contracts, difficult client scenarios, and all of the other stuff that aren't interested in. You have much better things to do with your time and your talents. In looking for a business partner, I recommend identifying a candidate with these characteristics:

-Transparency/Honesty: Clearly you don't like it when you have a client who is shielding the truth from you. 3x markup on your work is too much, especially if they are getting that while asking you to drive their price down (if you got to name your ideal price, it doesn't matter if they made 10X). Find a partner who speaks truthfully and doesn't mind pulling back the curtain on finances, even in front of client. I do this, and it has always been appreciated.

-Confidence: Your work is valuable. You want someone who understands that, and isn't going to wimp in the negotiation with the client. Sales hungry leaders often short themselves because they can't play chicken with the client. Get someone who will hold their ground in the sale. Ditto on revisions. Not that you want someone who is keen on conflict, but don't get someone who is conflict averse or passive aggressive. When clients get pissed about overages (even though they totally blew past the scope), your partner should be able to resolve conflicts while making the client both feel positive about the work and paying the additional fee.

-Meticulousness: If I let a client get a revision for free, it is definitely not because I'm obligated to. I made sure that my contracts were written simply, and effectively. That gives me confidence that if I had to, I would be entitled to enforce a tough client decision. I have NOT ONCE had to use a contract on a client and my agency has had over 130 engagements to date. I'm also organized with my account management, and I've trained my account managers to be this way. When a client first takes a step outside of bounds, we address it politely, immediately, and clearly. We don't let small grievances build up until the final stages of the project. Organized and meticulous communication is key, and your business partner should be a master of this.

Those are my initial thoughts.

i mean literally, so what? do you want to make the money, or not? nobody is going to hand it to you. you have to go out and find it. you're competing with people with no kids, no debt, no spouse, and plenty of savings. tough cookies.