Freelance vs business

Freelance, as a mass phenomenon, appeared quite recently, I think not more than 10 years ago, together with the global spread and socialization of the Internet, and today this business model is still very little studied, today's freelancers are in fact pioneers who study the new way of life right on myself.

I went to my solo voyage in the ocean of the global economy about 5 years ago, but safe coastal fishing quickly became boring, I was always attracted by the open ocean, where huge liners of global corporations and fast start-up yachts sailed away.

For those who, like me, are not satisfied with the simple sale of their time in the free market, I will describe my path, which seems to me the most direct and obvious course for the evolution of a freelancer.

For the first year or two, you work with enthusiasm in a new, freer environment, gradually acquiring the skills of a manager who only has the resources of one performer — yourself, and if everything goes well, very soon these resources start to catastrophically lack, stagnation occurs.
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The most obvious way out is to delegate work, you break up large tasks into pieces and charge them to other specialists, most likely to the same freelancers. The case is moving from a dead center, the size of projects and turnovers grow by an order of magnitude, you practically stop doing your initial work and focus all attention on management.

If you continue to move in this stream, then the next crisis comes very soon, now your capacity is exhausted as a manager. A dozen simultaneous projects and several subcontractors generate a stream of managerial issues that even a very capable manager can do.

Some time ago I found myself in just such a situation, my capacity as a manager was exhausted, but I had to somehow serve the ever-increasing flow of orders. At this time, my production process looked like this.

• Some customers need to do some work,
• he e-mails me with his initial requirements,
• we agree with the customer the details of the work and the deadline for its implementation,
• if in this case the piece-rate payment scheme is applied, then there is bargaining and coordination of the cost of the work,
• After, and sometimes in the process of agreeing on the work parameters, I e-mail one or more of my subcontractors and offer them some part of the work, and I have exactly the same process with them as the customer, but I am already on the other side
• after all the conditions have been agreed with all the participants, the work begins,
• development is the most tranquil stage, if the TZ is well composed, everything just works,
• then the subcontractors start taking their tasks and I check their work,
• when all the subtasks are done, I hand over the work to the customer,
• then I seek customer confirmation of acceptance of the work and write down the amount of debt in the balance of the customer in the general table of Google Docs, each of my subcontractor does the same.

Now imagine how the work looks at the same time as a dozen of customers and several subcontractors, holding all these flows takes a lot of time and effort, but it comes down to constantly repeating processes.

And I, of course, began to look for suitable tools for streamlining and automating the whole process, and I saw that the manufacturers of control systems orient themselves towards traditional companies, and not freelancers, and yet there is a big difference between these options for doing work.

Agreement of conditions and bargaining

Only in a traditional company can a person be given a task, and this means that he automatically begins to perform it, no one asks him whether he agrees to do it at all, whether he can complete it within the prescribed period, or whether the proposed payment suits him. For a freelancer, this is unacceptable, approval of conditions, bargaining is the most important part of the workflow that has to be addressed in an email. But this process is standard and always proceeds according to the same scenario:

• one of the partners offers the initial conditions of the problem,
• the second, if necessary, corrects them and makes a counter offer,
• the task is transferred from one partner to another until the conditions are satisfied by both parties.

In this case, you need a few simple mechanisms:

• compare the two versions of the technical specifications clearly showing the changes made by the partner,
• if one of the partners has forgotten that the other is waiting for a decision from him, you need to periodically remind him of this until he either accepts the conditions or refuses,
• after the expiration of a certain period of time, if the executor has not accepted the task, the customer should be able to recall the task and transfer it to another executor,
• the task must imply a time-based or piece-rate payment scheme.

Delivery and acceptance of work

Delivery and acceptance of work for a freelancer is not less important than the process of accepting a task for implementation, and the following processes take place:

• the customer should be able to offer the contractor to hand over the work ahead of time in its current state, if circumstances have changed,
• after the expiration of a certain agreed initial period, if the customer has not made a decision, the work should be taken automatically,
• the customer must be able to submit the task for revision, and the contractor must accept or reject it,
• after accepting work, its value should be automatically recorded in the calculations of the partners.

Delegation

Delegation of work - the main mechanism for scaling freelancing, it is extremely important that it was done easily and conveniently:

• you need to be able to agree terms with subcontractors before accepting a task from a customer,
• delegated tasks should not interfere with work with the current, while the subcontractors are working on them,
• after delivery of the work to the customer, you can accept the work of subcontractors automatically.

Mutual settlements

In a traditional company, financial relations are completely separated from workers, in very few management systems one can assign a cost for a task, and conduct full-fledged partner mutual settlements and in general only in units. While for a freelancer, this area is no less important than task management and there should be similar rules in it:

• if the partner wants to add to the settlement with another partner an unfavorable operation, his consent should be requested to make this operation, the same when deleting a profitable operation, in other cases it is enough just to notify
• a reminder that the partner is waiting for confirmation of the operation,
• Freelancers often live in different countries, you need transparent accounting in different currencies with a translation at the real exchange rate, so that you can not play on exchange differences.

As you can see, the described mechanisms are fundamentally different from what modern management systems are built for the corporate sector, and without these mechanisms, the benefits of such systems for the freelancer do not greatly exceed the capabilities of e-mail. My colleagues and I tried several systems (dotProject, Basecamp), but eventually returned to GMail and GDocs. But the thought of how convenient and correct everything can be done, did not give rest, and in the end we sat down and wrote such a system ourselves.

The system was implemented as a social network in which the participants are not friends, but enter into business agreements, and do not send messages, but assign each other tasks and conduct mutual settlements. Over time, this system has acquired many additional functions and features, and at the moment it’s hard for me to imagine how you can do without it.

As a result, my problem of administrative overload was solved; using correct automation, it is easy to manage many small projects at the same time. For me, the main result of this experiment is confirmation that freelancing has good scaling opportunities, which are not inferior to many other types of business, only it needs to be automated other than traditional business.

We are currently working on a project of a fully-fledged fully virtual company, I touched on this topic in last year’s article Corporate Slavery, Runaway Slaves, and Virtual Corporation , but this requires finalizing the system, which we are doing now.

The control system is called WorkReactor, I will not give a link, those who are interested will find it. We invite everyone who, like us, believes that the future of labor relations lies with freelancing.