Top 5 pitfalls of a software development consultant


There are a lot of things you need to think about before you start working as a contractor. Whereas all these things don’t seem like a big deal in the beginning, they can (and most likely will) be bigger issues down the road. Here are the top 5 things you shouldn’t do as a freelancer.


1) Working without a contract

This is by far the most dangerous mistake you can make. In plain words, your client is not obliged to pay you if you don’t have a signed written contract. You client may make all sorts of excuses like “believe me, I will pay you” or “I’m in the process of finishing up my paperwork, we will put a formal contact later”. Get a good lawyer; make sure you have a solid contract. It’s better to deal with it in the very beginning rather than dealing with problems later. Check out a well-known “F*ck You, Pay Me” video that goes into more details.

2) Not having a lawyer

Your relationship with your client is complex. It requires knowledge in multiple areas like law, accounting, finance, engineering etc. Even if you download a “standard contract” from the Internet, chances are that it won’t cover aspects important to you or your client. If your client wants you to sign their contract, you have to understand it and a good lawyer can translate legalese into plain English. You may be in a situation where the client threatens to sue you. Your lawyer helps you to prevent this situation or make it easier to handle and ultimately save money.

3) Charging too low or too high

Either of these will lead to a situation that you don’t want to be in. If you charge too low, people may assume your low level of professionalism. On the other side, if you charge too high, your client may have unrealistically high expectations of you. This can lead to unrealistic deadlines and a perception which is hard to fix later down the road. Do your homework, ask how much similar contractors charge in your area for your level of experience and put down a reasonable price.

4) Not requiring a deposit

An initial deposit guarantees that you will get paid for your services (at least initially). Depending on how long your bill cycle is, I would recommend charging at least a bill cycle worth of work as an initial deposit. In addition to that, it also shows how serious your client is about the project. If your client is ready to put the real money on the table, it’s a good indicator that they are ready to go. 

5) Not having a cushion

A full time job is more or less guaranteed, whereas contracts come and go. There will be times when you are out of work and you should be prepared for it. Have a solid 6 months of savings if you are an individual contractor. Even if you have a contract in place, you usually get paid after the fact which delays when you get the actual money. Let’s say you started working on August 1st and your contract has Net 15 payment terms. If you send invoices bi-weekly, you will get paid 30 days after you started in the best case scenario. If you’re running a software consultancy, make sure you can pay your team if there is no work. Also it’s a good idea to have a plan on what to do during downtime.

Pic: © lassedesignen

Alex Tamoykin

Alex Tamoykin started coding in 5th grade of elementary school. He is an award-winning software engineer and a hands-on technical leader with over a decade of industry experience. He is well known in the tech community of Los Angeles, California where he teaches coding, gives talks and organizes technical meetups.

By Alex Tamoykin

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