In the world of freelancing, there are two ways of working: contract and fixed-price.

Hello, good morning 😁,

To kick off 2023, we're going to talk about freelancing, and more specifically about the different ways of working in the freelancing world.

As you'll have gathered from the title, the two most common working methods are agency and fixed-price... but késako? 😛

Contract work

Let's start with this, because it's very widespread, especially when the client is a large group.

In fact, freelancing is very similar to salaried employment.

For example, if a company needs a Symfony developer for a period of 6 months, it will probably call on the services of a freelancer to meet this need, and the service will be provided on a fee-for-service basis.

A freelancer working on a contract basis offers an "average daily rate", which corresponds to the price the freelancer charges for a day's work for the customer.

I said above that freelancing is close to salaried work, yes, but there are differences:

• There's no subordinate relationship between the client and the freelancer, it's a commercial relationship.
• Freelancers don't earn a salary, but they do generate sales, and these sales must take into account "off-peak" periods or periods of illness, because it's their own company (themselves) that pays them a salary every month.
• If the freelancer needs a day or half-day to handle business other than that of the customer, then he can do so, but of course he doesn't charge the customer for this time.

This last point is very important, because freelancers are also company directors, and it's perfectly possible for a freelancer to need a day to talk to his accountant, for example.

In fact, this is one of the "extra" values that freelancers bring to the table: they have to manage their own advertising and find customers, so they know how a business works (a small one, in their case) and have a more entrepreneurial vision than a salaried one. This is the case for me, for example, when I work on projects for or in collaboration with customers, I'm more interested in understanding the end goal than "what technology am I going to use?

There's one point that really distinguishes the fixed-price approach from the other work methods, and that's that with a fixed-price contract, the freelancer rents out his time and has only a "duty of means" and not a duty of result, which means that the risk taken by the freelancer is lower and so is the remuneration.

Making contact with the agency

On a freelance basis, contact is generally (but not exclusively) made through recruiters.
The latter has a need expressed by a customer, and is looking for a freelancer to meet that need.

The recruitment process is very similar to that used in the salaried world: a CV is required, along with various interviews...
And sometimes there are technical tests.

(Personally, I refuse to take technical tests and I terminate the recruitment process in these cases, because in my opinion, there are other methods to find out if I master my subject or not, for example. this blog 😁)

Once the recruitment process is complete, a service contract is signed, the start date is set and the service can begin.

Temporary work is not necessarily a springboard to permanent employment

I'm taking the liberty of writing this paragraph because I often see freelance offers for "eventual employment".

Sorry, but that's not the point. If a company is looking for a new permanent employee, then there's what's called the "trial period" for that.

It's not impossible for a freelancer to decide at the end of his or her assignment to join the company on a permanent basis, but this is not the norm.

To be a freelancer, you need to have a structured company, registered with the Commercial Court. In my case, it's an SAS, and this company :

• Has ancillary activities (this blog, training courses, personal projects, etc.)
• Has its own assets, its own service contracts... etc.

For me, going back to a permanent contract would mean putting an end to a company for which I've worked a lot (really a lot), which is why going back to a permanent contract is out of the question.

And people might say to me: "Bah, you're going on permanent contract and you're keeping your company?"
Yes, but no, the company's cash flow comes largely from my freelance activity. If I'm on a permanent contract, the company's cash flow stops and the structure ends up dying.

Fixed-price services

Fixed-price services are closer to the entrepreneurial world than to the salaried world.

In this mode of working, the notion of quotation comes into play, which is not the case with a fixed-price contract.

How does it start?

The customer has one or more needs, and contacts a freelancer to meet them.

After a number of discussions and clarifications, and after establishing the scope of the service, the freelancer draws up an estimate.

When drawing up this estimate, there are several things to bear in mind:

• If the service is not delivered, the freelancer will not be paid.
• Freelancers need to take their cash flow into account: if the project is to last three months, then you need to bear in mind that for 3 months, there will be no cash flow, which is why a deposit is often required.

In the world of development, it's very difficult to predict how long it will take to complete a project, because often there are surprises (technology has changed a lot, an unexpected bug that takes hours to fix).

I talk about this in my article "What's a developer's job?".

That's why it's important not to rush into drawing up a quote, but to take the time to try and assess what's going to go "right" and what's going to go "wrong".

Risk must pay off...
If you've made it this far, you'll have understood that a fixed-price contract includes a "risk" factor, which doesn't exist in the case of project management, so you need to take this risk into account when drawing up a quote, and not simply invoice an "average daily rate".

If, as a freelancer, this risk seems too great for you, then perhaps you should avoid the fixed price.

As I said earlier, you need to take the time to draw up a quote, and a simple estimate is generally not enough.
The customer needs to understand exactly what you're talking about, which is why, in addition to the quote, you need to create a sheet with clear, detailed explanations.

When you draw up this type of estimate/contract, always imagine that you're dealing with someone who knows nothing about your business.

The service

After several exchanges, modifications and clarifications on the estimate, it is validated by both parties...
In the case of services, there's often a deposit to be paid, so the validation of the estimate takes into account the payment of the deposit.

Here, unlike in the case of advertising, there's no notion of "time spent", so if one day the freelancer sees fit to work on other things, he or she can do so.

Of course, if the quotation specifies a deadline for completion of the service, then he must stick to it.

The freelancer is therefore his own "project manager", and must work to ensure that the service is delivered as specified in the quote he has drawn up.

Once the work has been completed and the customer satisfied, the freelancer issues an invoice for the outstanding balance.

Stress and risk management

In my opinion, this is the crux of the matter when working on a fixed-price basis: freelancers take risks, and this must not be underestimated.

Let me explain: often in this kind of service, you'll come across a blocking problem (in software development, I mean),
If you're not used to working in this way, you can quite easily panic, and that can quickly become complicated.

That's why it's best to work on a fixed-price basis, if you're really sure of your ability to answer your customers' questions and know how to handle the pressure.

Conclusion

In this little article from the world of freelancing, I've tried to put forward my vision of the two ways of working...
If you're wondering, I'm more of a flat-rate freelancer than a freelancer, because I really enjoy taking risks 😍.
And I can tell you that once you've done something stupid, you'll never do it again.

The control room is a good alternative for "quieter" periods, but when you really want to have fun, the package is king.

Have a great day and see you next week 😁