Sub(contract)s and Dom(inating niche)s

  • Posted on: 29 April 2014
  • By: Shawn DeWolfe

The Gimp: talk about a specialistFor me, 2013 was the year of the sub-contract. I started the year with two such gigs and I had two more that didn't give me a lot of joy. When I set up Those DeWolfes, I was committed to not sub-contracting. I was going to build my own products and I was not going to get mired in long tangles with clients who wanted make their website look haywire but in keeping with their ardent ideas. I was on retainer to a company back East, but their point of contact was someone local who took up most of my available time, and was prone to disappearing on benders. I was left hanging one too many times and I needed to get money going ASAP.

Building a product is a classic battle: build a product, make it well supported, market it and iterate the product’s development should it take off. I built Meat Split but it was going to fulfill such a narrow niche that no one knew of it. If I had time (read: money) I could stop and complete products. The problem is that mix of not being too busy, but having some income available during product development.

Getting clients amounts to a lot of marketing and putting your name out there. Then you have to push marketing to the back burner if you get work. The cycle will create selling wherein your sales are perpetually lurching. One could get sub-contractors through oDesk, but that’s a challenge all its own.

A way to get money and get it fast: sub-contracting. Sub-contracting taps into businesses who are too flooded with work to execute the work. You would be surprised how many are out there in that boat. A website like www.couchcoder.com aggregates the calls for development and telecommuting work.

I applied to two companies and to my surprise, they both hired me. The two had very different styles. One tested me and had lots of documentation. It was clear they had systemicized their workflow to allow for scaling. As far as sub-contracting were concerned, it was as good as it could be. The other place was a little random. Both of them paid so-so: $30/hour. When I say, “$30/hr.” to most people, they think, “Whoa! That’s good money.”

Here’s the math of why $30/hr. is so-so when it’s stacked up to a job:
  • Jobs have sick time (get sick, miss a day, you sorta get paid)
  • Jobs have vacation time (2% of your income on top)
  • After taxes, you get to keep 80% of your wages. A proprietor should hold back at least 25%.
  • If I, as an employee, run out of skilled capabilities, I go back to the books and learn-- doing so off the clock. I really believe I get paid to practice skills, not learn skills.
  • If I show up for a day of work and the work is lax, I still get paid. As a sub-contractor that could be a day of unearned income. There are times when the upstream contract promises to call and a week goes by. They do need to pay for all of the appointment slots they block out, but leaving the sub-contractor hanging is common.
  • If the boss wastes your time, you get still get paid,
When I worked at one place as an employee, they tracked my billable hours. I had just a little bit over 50% billable and I was generating the highest percentage of the staff. If that holds true in freelancing land, hang-time will eat almost half of them available time-- I can be more lean as a freelancer, but let’s say I could bill 60% of my time at my desk. $30/hr. extrapolates into $18/hr. when the hours billed are stretched over the hours engaged.

Take off 2% for holiday pay-- now I’m at $17.64/hr.

Employees are commonly allowed 0.5 days per month as sick time. Aka, 1 out 40 half days per month. That takes it down to $17.20/hour for your skill trade. Of that, 75% is take-home. getting you to $12.90 per hour. KFC pays $14/hr. aka $11.20/hr. take home and I bet you can take chicken home at night (not that you’d want to).

How To Survive

First off: don’t sub-contract. That’s the approach that works until one loves coding so much that the work is more important than the income.

If you ignore “don’t sub-contract” then make sure every single minute gets onto the bill: phone calls, botched Skype calls, emails, teary text messages, code review, testing, dead-ends-- the works. Only agree a to cap of hours if it comes with the understanding that you put down your tools when the cap is hit. I have had people drive past the limit and expect me to keep going because the work is not yet done. It’s a business, not a charity. Either you are paying for your work, or your client is.

Second: don’t act like a sub-contractor. Act like a specialist. Have you gone into the doctor’s office to have something looked at? If they can’t lance it, they will likely send you to a specialist. That specialist will earn more than the GP-- that’s for sure. Do exactly the same thing: get it, do your work as quickly as possible, then get out. An accountant friend explained to me what happened when accountants swapped over to using computers. Their workload halved. Their speed of delivery more than doubled. In response, they looked at the speed of delivery improvements and they upped their rates. The client wants sometime fast so that it can begin returning on its investment as soon as possible. A specialist can get in and get out in record time.

In following the specialist approach: specialize. Find a narrow skill-set niche and totally dominate it. In the 1990s, I tripped into being the financial services website guy and knocked off a lot of financial services sites. As of late, I have been tapped to deploy e-commerce (Ubercart and Drupal Commerce) into Drupal sites. I rock at deploying Drupal into very non-Drupal like situations. A secondary specialty is my ability to be make child themes in WordPress that have expanded PHP code meant to deliver the client goals better than an out-of-the-box solution. As one does more in a specialty area, one will get better. One will dominate their niche. They could even move from doing to teaching to build street cred as an expert.

Best of all, the sub-contractor eroded rate gets replaced with a premium rate that is above the established baseline. If you get really good at something, you can jump in, do a quick, flawless implementation and jump out again. The angst and false starts will not be a part of what the client experiences and it leaves you free to engage other clients buoyed by word of mouth and examples of your work history.

If you wish to talk about what my special services can do for you, contact me.

Last updated date

Thursday, August 7, 2014 - 15:20