Succeeding as a self-employed web developer Considerations for entering and succeeding in the web development business

Presented by: Sam Keen for PDXPHP with contributions from Moxley Stratton and Ryan Snyder

Are You Ready To Fire Your Boss Know Thyself

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If you know yourself and know your enemy, in a hundred battles you will never fear the result. When you know yourself but not your enemy, your chances of winning and losing are equal. If you know neither yourself nor your enemy, you are certain in every battle to be in danger. -- (Sun Tzu, The Art of War, 400 BC.)

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Are you a self-starter?

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Are you a self-learner?

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Do you have a backup income plan? (significant other)?

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In good health? Are you organized? Are you prepared to take on the financial aspects? (Invoicing, Taxes, Receipts, Bookkeeping...)

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Do You Have The Tools Needed? ➲

Hardware ● ●

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Reliable Internet Access Best to have a laptop (rather than just a desktop) ● You will learn to love Portland's plethora of free wifi coffee shops. They allow you to 'change the scenery occasionally as you work. Many folks go stir crazy doing all their work at home. ● Laptop will also enable you to have a face to face with local clients and easily show site mock ups or presentations Don't go crazy, you don't need a $2500 laptop to hack code.

Backups – If it is important, have it stored in at least 2 places. ● ●

firewire/usb2 drives are a good, cheap solution. Also, keep security in mind, your not only protecting your data, but often your client's.

Do You Have The Tools Needed? Software (This is were it really pays to embrace open source) ➲ ➲ ➲ ➲ ➲ ➲ ➲

100% Proprietary Zend Studio: $249 Photoshop: $649 MS Windows XP Pro: $199 MS Office w/ Outlook: $499 --------------------------------Total: $1,596

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100% Open Source PhpEclipse: $0 Gimp (GimpShop) $0 Ubuntu/Fedora/etc $0 OpenOffice+ThunderBird $0 Wine (for IE) $0 --------------------------------Total: $0.00

Learn more about open source web development tools

http://www.onlamp.com/ ●http://developer.apple.com/opensource/ ●http://www.eclipseplugincentral.com/ (learn what you can do with eclipse) ●http://www.tigris.org/servlets/ProjectList ●http://sourceforge.net/softwaremap/ ●Google /Yahoo/ A9 search .......... ●

On the other hand... ➲

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Don't spend a week or more learning a free technology if there is one for $300 that doesn't have a huge learning curve. (your time has 'cost' associated with it) Example: ●

A proprietary financial package that seamlessly coordinates you time tracking, invoicing, and taxes with the click of a few buttons, might be worth the cost.

Possible Business Plans ➲

Sole or multi member ● ● ●

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More Pre-Planning Sole member company Developer in a multi member company Manager in a multi member company

Contracts or Products ● ● ●

Work contract to contract Build a website(s) to earn income through Build a software product to sell

More Pre-Planning

The definition of software 'Product' is a changing one ➲ ➲

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It used to be 'Software' was something that came in a box with manuals. More and more, the real money is to be made in developing software services and/or web applications When speaking with 'experts', accountants, and attorneys, make sure they understand (to some extent), the new concept of software development.

Consulting Solo vs. Being employed with a requiter ➲

Consulting Solo Pros: ● ● ●

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More flexibility with time You pick the clients and projects You feel a sense of freedom & power over your life

Consulting Solo Cons: ● ●

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Difficult to ensure client pays you on time, if at all You are responsible for all networking, marketing and sales, whereas company can do that for you. They can also give you things like low cost health care Negotiation and business matters take time away from projects Consulting with a requiter can often be a good transition step from fulltime employee ---> forming your own company

Should you get investors? * ➲

No investors ● ●

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Build the company slowly, and fund its growth using it's own revenues. A company with no investors has a simple definition of success: “The company can stay in business as long as it not losing money and never runs out of cash”.

Investors ● ● ●

Get money from investors and try to make it grow the company more quickly. Raises the bar for success. Simply breaking even means failure. Stick to high margin business models (gotta pay back those investors). This is why an open source business model (typically lower margin), with outside investors, can have a very hard time succeeding.

* Eric Sink, Business of Software, (Apress 2006), 36 http://software.ericsink.com/

Pitfalls for the Self-Employed ➲

Beware of the home distractions ●

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Don't Loose touch with society ● ● ●

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If you work mostly from home, be sure you have a dedicated, functional, comfortable space. (The kitchen table is not an office!) Code at “Geek” hangouts from time to time Attend User Group Meetings Mingle with the 'Designer crowd'1, (They need geeks to code their sites)

Don't work without a schedule ● ● ●

Billed time vs Administration time vs Research time 1st of month invoicing Quarterly taxes

1. AIGA, dmob: http://portland.aiga.org/events/network Devgroup NW: http://www.devgroupnw.org/home/

Pitfalls for the Self-Employed

Get a Life!!! ➲ ➲ ➲ ➲

Be prepared to work your toosh off, but don’t forget to play as well Burnout potential is extremely high Don’t let your computer become more important than your significant other Set aside one sacred day a week that you won’t work (and stick to it!)

Networking 101 ➲

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You may be a geek, but practice your people skills. Converse with everyone at a party, coffee house, even the metro, you never know who you’ll meet. Almost every contract and job comes from networking. People hire contractors they feel they can trust. (or they know someone who knows someone who feels they can trust the contractor...)

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Always have business cards handy (and give them out like candy) Follow up with your contacts periodically

Personal Marketing 101 ➲

Specialize ●

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Portfolio ●

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Pick a skill to specialize in and market. Keep persistent in developing that skill. Be patient. It takes time. Doesn't mean that you don't do all that other stuff too. As you do work, keep it organized in a way that enables you to easily present it as a portfolio of work that highlights your skills and level of responsibility. Keep refining it.

Maintain your edge ●

Learning new skills and technologies keeps you ahead of the competitors. Set aside time each week to bone up on new skills (research time)

Vary the type of work you have ➲

Maintenance Work (maintain something someone else built) ● ● ● ●

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Typically, not too technically difficult Easy $$$ Can fill in the gaps between 'New Development' gigs Don't accept anything to maintain (beware of the cluster f*#$! web site/application!)

New Development ● ●

Lets you exercise your creative side Keeps you abreast of new technologies, and the best part is the client 'pays' you to learn it!

Keep up on a few of the latest CMS's ➲

Large, growing demand for developers who can install and configure these. ●

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Drupal, Joomla, etc ( http://opensourcecms.com/ )

For many clients, these provide a quick, acceptable solution. You can learn quite a few 'tricks' and techniques from some of these frameworks that you can use in your custom work.

Legal Stuff ➲ ➲

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Take the time to draw up a contract to use for clients that don't provide one. Read contracts you sign, if it is a large contract, you may want to have it reviewed by a lawyer Sample contracts ● ●

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http://www.procopio.com/publications/samplecontracts.htm http://www.sitepoint.com/article/bulletproof-web-design-contract

Who owns the code/website, developer or owner ● ●

http://www.procopio.com/publications/art_develop.htm http://www.sitepoint.com/article/legal-issues-developers

Form an LLC General Guidelines... ➲

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We are not lawyers or accountants, always seek the advice of a lawyer and/or accountant during the process of forming your company...

Create the entity by completing and filing the Articles of Organization. Before filing check with the Secretary of State for the availability of the business name (503-9862200 or web site). The name will be registered to the LLC. Complete the Assumed Business Name registration. You can be the registered agent. The fee is $50. Complete Form SS-4 to obtain a federal identification number. Open a separate business checking account for the LLC. Take your Articles of Organization and federal identification number to the bank when opening the account. Perform all activities in the name of the LLC and use the LLC checking account for business payments. The Oregon Corporation Division website is http://www.filinginoregon.com/forms/business_registry.htm Select Limited Liability Company - Domestic - Articles of Organization. In addition, its not mandatory in Oregon but often suggested, that you create a formal operating agreement document. The document is added documentation that you are a corporation and not a sole proprietor in legal status. The biggest benefit of a legal status of a corporation, of course, is that in a lawsuit your personal assets is not at risk. Attached is a sample of a single member LLC operating agreement for you to use to draft it out. It's always recommended that you have an attorney review your draft. But by having a draft version, will reduce your lawyer fee. The last thing to check is to see what are your local/county requirements for single member LLCs. (i.e. In Portland, you would have to file for a business license, and pay a city and county fee in addition to a trimet fee as a business.

Misc Stuff, To Host, or Not To Host ➲

Pros ● ●

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Cons ●

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Cut out third party hosting company (no waiting on them to take action Residual income You may be a talented coder, but not necessarily up on all the sysadmin duties and the big learning curves. A professional hosting company should be. 4am, Saturday, ring...ring

You can shoot the middle with a managed server reseller account

Current Potential Opportunities ➲ ➲

Anything the client thinks is “Web 2.0” Web tool kits ● ● ● ● ●

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Social Web Sites Web Services ● ●

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Yahoo – very well documented and they strongly push PHP http://developer.yahoo.com/php/ Dojo - http://dojotoolkit.org/ Prototype - http://prototype.conio.net/ Jquery - http://jquery.com/ moo.fx - http://moofx.mad4milk.net/

Amazon - http://www.amazon.com Yahoo - http://developer.yahoo.com/

Online Web Applications ●

Lots of Ideas @

http://dmoz.org/Computers/Internet/On_the_Web/Web_Applications/

Write in questions ➲

What do you do when you hit the point where you don't have enough hours in the week to handle current work AND new work? How do you grow beyond your own workload capabilities? Subs are an option when you aren't in a position to hire someone full-time. But that dredges up the question of how do you find someone who is reliable because it's your name on the final product?

"In general, any time you look for an answer or some information and can’t find it, that should strike you as an opportunity."

- Matt Cutts, Google, on SEO practices and web success