Is this a good route for a freelance business? Or should I look for a 9 to 5 job? Or pursue both?
February 26, 2010 4:41 PM   Subscribe

Is it a good idea for a freelance web designer to work through a middleman? I have someone, a family member, let's just call him "Alfred", who has made a business proposition with me.

This "Alfred" has offered to handle the negotiation with my clients should I decide to start a freelance web design business, as well as help scouting out new clients (sort of like an account executive or a middleman). The way it would work is this:

1. Clients would either find the business via our website or through him.

2. They would contact us through the website. That message would go directly to Alfred.

3. Alfred would go over the initial specifications for the project with the client and get the gist of what they are looking for.

4. Alfred then relays this info to me, I take a look at the details and can contact the client myself if I need to. If I agree to the project, I tell my friend. Contracts are written and signed. My friend handles this part.

5. I build the site. Alfred is the main one who talks directly to the client, sends them the mock-ups I do, invoices, etc, but again, I can talk to the client if I need to.

6. Upon project completion, Alfred gets a percentage of the final price. Probably 25%.

Do you think this is a good way to run a freelance business? I mean, I was getting ready to look for a regular 9-5 job when Alfred proposed this to me today. I am wondering which direction to take and wanted to get some other opinions on it. Alfred is not a web designer but he can articulate and sell in a way that I can't. He is also willing to learn the web design/development lingo and trends as well and to work with my own pricing structure. Are there questions I should be asking him (besides the obvious of course)?

And yes, this "Alfred" (not his real name) is an immediate family member. I am not a salesperson, he is (learned on his own time), so our skills could work hand in hand.

Another thing I am concerned about is that Alfred seems very fixated on the money. Of course, every business is concerned with money so i understand that. But web design was something he was never into until he read about how some people pay galleons for websites. He's convinced that if we find the right clients, there could be a lot of money in in this for both of us (e.g. tens of thousands of $).

I'm not especially money motivated and have a hard time charging people. I do web design because I love it and because it's something I've been doing since high school. Even if I didn't get paid for it, I'd still do it. I'm not sure that my skills are even worth the ten grand he says we should charge, and I would feel greedy asking for that much. I feel bad saying this (because I love him and he's family), but I don't even know if he's in it just because he sees it as a get-rich scheme or if he truly is interested in the web design world.

I don't know what to do. Alfred has made a what I hope is a genuine, generous offer, and I appreciate it very much. I feel bad even questioning his motives, but you can never tell with people. We're not as close as we used to be although I hope that could change in the future.

Part of me wanted to try my hand at a 9-5 job since I want to get out of the house and get used to working one-on-one with people, on a team, to improve my interpersonal skills. Freelancing via Alfred wouldn't provide this. My family knows I'm very shy and not confident and I feel that this is their way of compensating for that. I could be wrong though. But then, freelancing with Alfred would give me time to pursue other activities. He said we could do this business on the side as well, if I really wanted a traditional job.

I don't expect you guys to make my decision for me, I just want some other opinions. I don't know why I feel so confused and uncertain about all this.

Thanks for any insights!
posted by starpoint to Work & Money (22 answers total) 3 users marked this as a favorite
This is a terrible idea. Salespeople routinely sell far more than can be delivered by even a strong team. A salesman can trivially sell more than you alone can produce. Furthermore, since he doesn't actually do web design, he's not going to know what's even physically possible, let alone what reasonable deadlines might be.

What tends to work best is two engineers or designers, one of whom who also enjoys dealing with the client. If you're going to go freelance alone (as in, contributing all of the business' value), then you should learn to talk to the customers yourself. It's really not that hard. And the easiest way to learn to charge people is simply to set an hourly rate, and never waver on it. Offer estimates instead of bids, but keep them in the loop on hours billed and deliverable produced.
posted by Netzapper at 4:49 PM on February 26, 2010 [6 favorites]

It sounds like Alfred is hoping to make money off of you. Does he really add value to what you do? Are you able to prospect for new clients by yourself? Is there enough work volume to justify a business development role?

It souuds like Aldred is inexperienced. He should really be offering his services to a larger team, where it makes sense for him to handle relationships with multiple customers.
posted by KokuRyu at 4:51 PM on February 26, 2010

Oh one point to clarify -- he would not sell more than I can produce. He would not sign on clients that I don't have time for.

Also, I do know how to talk to clients, I've done it before. It's just that I am not as good and polished at it as he is.
posted by starpoint at 4:53 PM on February 26, 2010

he would not sell more than I can produce. He would not sign on clients that I don't have time for.

How do you know this? That's him losing money - if he was able to bring on more work, he'd probably let you go and try to find someone else to "hack it".

Working for family members is bad enough, working with family members - in a situation like this - is even worse. Unless Alfred is a parent that you've spent your entire life with and know is good at what he does, stay clear the hell away from this scenario. It isn't worth it.
posted by june made him a gemini at 4:58 PM on February 26, 2010

Well he's not a parent but I have spent my entire life with him. He has other sources of income so this would not be his main job.
posted by starpoint at 5:07 PM on February 26, 2010

It doesn't have to be a terrible idea, if he's really good at hustling up clients and you trust him completely. However here's what jumped out at me:

1) Why should he get a cut for people who just find the website? I don't think he deserves anything unless he actually worked to find the client.

2) 25% is a HUGE cut. In the entertainment industry agents take 10%, manager 15%. One person taking a quarter of everything you earn seems outlandish to me.
posted by drjimmy11 at 5:13 PM on February 26, 2010 [2 favorites]

It sounds like Alfred is trying to help, while making sure he is compensated for his time. It also sounds like he can take it or leave it, which is a plus for you.

It's nice to have work in the pipeline, and it's nice to have a trusted individual (Alfred) making the referrals. If you can set up some sort of referral system with him (say 5-10% of the cost of the contract, which would work out to max $300 on a $3k contract) it may be reasonable.

Since you would be dealing with customers anyway, it would help you polish your skills, and eventually you and Alfred could part ways.

It's critical to communicate expectations (such as a referral fee) upfront. Since prospecting and closing are important (as is executing, which will be your job), it is not unreasonable to expect a referrer's fee, and Alfred will help you gain traction.

But set out a timeline at the beginning - perhaps agree to work with Alfred for three months, and then reevalute the nature of the partnership.

It sounds to me that Alfred isn't the real issue - it's whether or not you want to pursue freelancing versus a 9-5 job.
posted by KokuRyu at 5:20 PM on February 26, 2010 [3 favorites]

> Oh one point to clarify -- he would not sell more than I can produce. He would not sign on clients that I don't have time for.

is answered by

> Furthermore, since he doesn't actually do web design, he's not going to know what's even physically possible, let alone what reasonable deadlines might be.

Unless Alfred has several clients already lined up for you-- in which case you would be paying him a (remarkably large) finder's fee, rather than having him as a genuine partner (face it, you'd be the one doing the work)-- this is a not-compelling idea, on the face of it.

Even with the best of intentions on Alfred's part (which, obviously, is not really a given), this could go very bad, very quickly. The fact that he's a family member could actually put all sorts of subtle pressures into play-- you'd need to get everything, everything in writing... and decide to ignore any potential familial pressures.

Anyway, you might try it once-- the biggest challenge, from your perspective, is making sure Alfred sets sufficiently high prices, with sufficiently long deadlines. No sense in him lowballing, if you're the one actually doing the work. ("Do a combined and integrated clone of Orbitz, Facebook, and eBay, in three days? No problem!")
posted by darth_tedious at 5:21 PM on February 26, 2010 [2 favorites]

Successful businesses are built on the back of good salesmen. Period.

So here's the thing - this is not a "freelance designer going through a middleman". This is you going in business together with Alfred. What you describe sounds good if:

1) Does Alfred have a solid understanding of web design work? Does he know how hard or how easy things are? Clients will ask him for outlandish things and he will be pressured to answer on the spot. Can you trust him to be your voice?

2) People are balking on the 25% cut. Hell, he could take 50% cut if his presence on the business adds a substantial premium to it that covers that overhead and adds benefits, both tangible and intangible (you can focus on what you do best, clients get better customer service, etc etc). The question is: does having him being the front of your business grows your income by at least 25%, not just by bringing in more work, but also by selling your ours at a premium price you couldn't justify before?

3) Do you trust him? Like trust-him-with-a-blank-check trust him?

If the answer to all these questions are yes, by all means do it. If the answer to any of these is no, don't do it.
posted by falameufilho at 5:26 PM on February 26, 2010 [2 favorites]

Ah - always get everything in writing. Forgot about that.
posted by falameufilho at 5:28 PM on February 26, 2010

You seem to already be pretty sold on the partnership, based on your replies to various people in the thread. If you've already made your decision, make sure you get everything in writing and work really hard on your communication with him, realizing that there will be a sharp learning curve.

If you're still open to feedback- everything I read from you screams NO!

Recognize that web design is a fairly specialized artform. Even if he has been around computers as much as you, and he's a young, web-savvy dude, he likely knows just enough about web design to get him - and you - into touble.

This is what I envision: you put a LOT of time into helping him get up to speed with what your capabilities, etc are. He either finds you a client that you wouldn't have gotten otherwise (yay!) or skims one that contacted you via your website (not yay), and begins negotiations with them. At this point, he is on the phone with you constantly, forwards you the email for your input (taking up as much or more of your time than you would have otherwise spent) or charges ahead, possibly promising skills and timelines that you can't deliver. Chaos ensues.

Here's an alternate suggestion: tell him you'd like to pay him a consultant's fee to amp up your sales skills and techniques. That way he is getting paid for his useful expertise, and he shows you what YOU need to know to turn your web design business into a full-time job. Maybe even pay him a flat fee for X hours of instruction, and offer him a percentage of any increased profits you get for the next 3, 6, or 12 months (definitely have this in writing, and don't make it unlimited). Everyone's happy, and in the long run, these will be marketable skills that you can take to any future career. If you stay in independent web design, these are going to be skills that you'd like to have, anyway. So take a leap, learn something new- and stay independent.
posted by arnicae at 5:56 PM on February 26, 2010 [1 favorite]

You've edited your post since I've last been in here but:

I'm not especially money motivated and have a hard time charging people. I do web design because I love it and because it's something I've been doing since high school. Even if I didn't get paid for it, I'd still do it. I'm not sure that my skills are even worth the ten grand he says we should charge, and I would feel greedy asking for that much. I feel bad saying this (because I love him and he's family), but I don't even know if he's in it just because he sees it as a get-rich scheme or if he truly is interested in the web design world.

This is a problem. If he's in it for money, he's going to throw out these numbers. Even at a decent agency, you're not going to see web design (you don't mention the sort of development you do as far as XHTML/CSS/etc.) go for this much by itself unless there are drastic changes in scope. He's trying to put a sparkle in your eye. Please don't naively fall for it.

You also note that you think this will give you more time to take up other hobbies or activities. If/when he realizes you're spending time he could be making money off of you for, he's going to clamp down on it.

I'm being awfully pessimistic because I've been in your shoes more than once. It sounds too good to be true because it is. Even if he had the means and the know-how, he wouldn't go into this without a real business plan set up for the two of you. He thinks that this is just quick, dirty work and incredibly easy for you. He doesn't realize that what these clients are going to want (if they can even afford a $10k project, no less a QUARTER of that) are likely beyond your means and where your hobby has taken you.

That isn't a bad thing, that's just the reality of it. Take that 9-5 and don't look back. But like the post above me says, it looks like you're pretty dead set on how legitimate you think he is. If you truly think he isn't trying to scam you - I can't talk you out of this. But I wouldn't, for one second, trust anyone who has no experience or knowledge of the web to try to sell it the way he thinks he can.
posted by june made him a gemini at 6:00 PM on February 26, 2010

No, no, no, no and no. If he doesn't GROK web design in the fiber of his bones, he is going to fuck you over -- unintentionally. Seriously, never hire a salesman that doesn't understand exactly what he is selling. Go to Clients from Hell and read a few pages about how normally intelligent people can be totally clueless about web design, now imagine that the "clueless noob" in this case is Alfred, who has already promised stuff to the real client and now you have to deliver that "just blow it up, you can photoshop that right" or "translate it in an hour or two" or "my teenage son says you need to use the JAVASCRIPTS" or "it's great but..." bullshit because it has already been promised to the customer .... NO NO NO NO NO NO NO NO god no.
posted by seanmpuckett at 6:15 PM on February 26, 2010 [1 favorite]

OP, I’m going to try to give you some things to think about from a few perspectives. First, I have a very similar personality (some of what you describe) and second, I’ve been a freelancer for a year, and struggled with all the things you mention (finding clients, negotiating, etc.). I have also entertained the idea of just paying someone to find clients (I still do).

9 to 5 versus freelance. From your post it sounds like you were never in a 9 to 5 job for your specialty? If this is the case, I highly, highly suggest that you do this. Why? You are more likely to do work with big name clients (and those samples will land you big name clients when you are a freelancer). You will learn what is “hot” in your field/new ways of doing things. If you do have a problem with shyness etc., just by proximity with your co-workers - some of them will grow to like you, respect your work, and your clients in the future. Finally, pay attention to the work environment: How do they find their clients? How much do they charge? You don’t have to be at a 9 to 5 job forever, just a year or two to get could samples, get to know people, etc.

Re: things to think about if you do this with someone. I have had people approach me (who have contacts in the industry plus agencies). I have seen people take cuts ranging from 35% to 50%. However, they do everything – conversations with client, project management, collect the money (this is a big one), etc. One big thing (if you work with your relative) I would caution is to have an agreement that he gets this for the first project, not later ones. Many of your clients will continue to work with you, so you don’t want to give up this money for the next several years.

I think arnica has a solution if you do decide to do this (pay him to work with you, give you advice for a fixed time period). Believe it or not, clients will find you...from linkedin, contacts, your webpage – why are you going to pay him for this? I also think you can and will learn these skills. Even in the last year, I’ve done things that I would not do before (negotiation, call people on the phone, etc.). You need to learn these skills for yourself if you are going to have a successful business. Finally, I never would have thought this before, but some of the companies hire you because their teams are dysfunctional – you need to communicate with them to find out what they want (and even then....) Anyway, you need to be part of the conversations to have them define what they want, check in with them, etc.

I really believe you have to go beyond your relative to learn how to do this well. For example, learn more about contracts (what should go on there, what should be taken off). I noticed you are the states. I would highly recommend that you go to SCORE a few times – they have people that can help you for free for all aspects of running a business.
posted by Wolfster at 6:42 PM on February 26, 2010 [1 favorite]

Well, it depends on whether or not starpoint is able to sell to capacity on his own or not. If he is, then obviously he doesn't need the guy to help him. If he isn't, then obviously it wouldn't hurt to take him on board.

If it doesn't actually end up working out, he can always move on. It doesn't seem like a particularly difficult thing to back out of if it doesn't work
posted by delmoi at 6:55 PM on February 26, 2010

I wish a had an Alfred some time ago. I'm currently working to "build" one. And I have some experience to say that you don't come across a good Alfred easily. The fact Alfred is family is a huge red blinking light, at least to me. Others' mileage may very well vary. However, I have bad news. Work, EVERY kind of work IS about the money, a just compensation for your time and skills. When it's not about the money, then it's called a hobby, or volunteering. Which you can totally do, but is completely unrelated from working, either as a freelance or 9 to 5.

Now: Alfred is a good salesman. If you opt not to pursue the 9 to 5 route, you want clients. Paying clients, so start tossing aside all the "I'd do this for free" BS. If you want to design sites for free, then I have a business proposition for you.

Alfred can procure clients and wants to be your agent? Awesome. You're getting in business with Alfred. You're no longer a freelancer, technically, you're the creative part of a small agency. 25% of the closed contracts to keep you busy is a reasonable rate in my opinion as long as you can keep headaches and phone calls to a minimum. ie: spend your time to work, not to answer the phone.

What you need to do is:
a. discuss what kind of clients (size-wise) you both are wanting to work with.
b. what kind of clients (size-wise) you are able to work with. Biting more than you can chew on a $20k contract is way worse than having a string of 40 $500 sites for small businesses. Are you a programmer, too? Do you know/work with a reliable one? What is a reasonable expectation of your productivity? Can you outsource part of your work?
c. instruct Alfred on what is feasible when selling websites: he will find clients that "want a facebook" for $ 1000. Even, set up a reasoned commercial breakdown of your offer, like "static site, small X, med. Y, custom wordpress/joomla/drupal whatevs, Z, custom solutions starting from W upwards and so on".

First and foremost, though, you should frankly assess your experience, your expertise, your portfolio. You're 27. I know people that were creative directors for the web division of large agencies at 25, with like three years of experience. Others still struggle with animated GIFs to make "pretty web sites". They both call themselves web designers, so it's a bit hard to give advice without knowing what you're aiming for.
posted by _dario at 7:36 PM on February 26, 2010

It can't hurt to do a test run with him. Make it very clear that this is a one-time arrangement and if you like working with him on it you will consider future possibilities with no guarantees.

I would NEVER EVER EVER in a million years give him a cut of stuff that comes through the website. If he in essence wants to be your salesman, ONLY give him a cut of what he himself brings in--otherwise he's just skimming money for nothing.

Beyond that, you sound like you don't have a ton of business experience when it comes to this stuff--I don't mean that in a negative way, just stating an observation. I advise you to go with the 9-5 if you don't have the design business to fully support yourself currently. Relying on him to bring in enough revenue to keep you both paid well enough to do this full time is a MASSIVE gamble when he has zero experience selling design.

The fact that he is all in this for the money and seems to think that $10k website projects are just waiting to be grabbed is another huge red flag. I do freelance web design when the situation arises and the simple fact is that clients willing to pay that much are likely going to want someone with a lot more experience than you have and are probably going to want to work with a more established, physical company. Just my .02.

Now websites for $1-2k is a lot more reasonable, but again, he's all about the money. What if you were to rely on him for sales and he realizes in short order that this isn't the get rich scheme he thought he signed up for? Would you be screwed if he decided to drop it?

These are all things to think about.
posted by Elminster24 at 8:21 PM on February 26, 2010 [1 favorite]

Working through a middleman for web dev can be a very good thing. It gives you a buffer that you don't have when you're both developer and businessman. However, as falameufilho said, he definitely has to have a good understanding of web development or be willing to learn fast. Either that, or he has to be able to run everything by you, which might get tedious.

Him having web skills is important for two reasons - it will not only make development easier for you, but save you from looking ridiculous to clients. For example, a salesman inexperienced with the web might want to charge $1000 for a sitewide font change, when you realize it's a matter of changing 1 line of CSS code. Or he might upsell some feature that's near impossible for you to build.

If you decide to work with him, I'd have solid contracts that outline the whole process, like design reviews, client content delivery, etc.
posted by beyond_pink at 4:56 AM on February 27, 2010

How much more work do I want to take on? If you're able to get X hours worth of freelance work per month on your own but you really want Y, then you've got Y-X times your hourly rate as the balance that Alfred would have to make up in order to satisfy your needs. That's your potential additional earnings.

Compare that to 25% of your current income and 25% of the income you would be making if you worked Y-X more hours. How does this compare to your current situation? If it's favorable, it sounds like a good idea. However, doing a mockup based on you currently working 100 hours a month and wanting 160 hours, and billing $100/hr:

Current income: 100 (current hours) x $100 = $10,000/month.

Optimal: 160 hours (optimal hours) X $100/hr = $16,000/month.

Alfred's take in current situation: 25% of 100 hours (current work) x $100/hr = $2500/month. You'd be earning $7,500/month, a 25% paycut.

Alfred's take in optimal situation: 25% of 160 hours (optimal work) x $100/hr = $4000/month. You'd be earning $12,000/month.

So, optimally, you're taking in $2,000 more per month, but wait. You're working an extra 60 hours per month to get it. So, your hourly rate for that time is $33.33/hr, which is 1/3 of the rate you charge. That's a best case scenario. Worst case is Alfred bringing in anything less than an extra $3,250 per month because you're actually losing money that way.

So, to summarize, in order for this deal to be good for you, Alfred's got to be able to guarantee you at least 32.5 hours more work every month in order to not cost you money. Even after that point, you're working for a personal discount; you'd be just as good off dropping your rate and picking up cheaper work.

Best of luck!
posted by Hiker at 6:25 AM on February 27, 2010 [1 favorite]

By dropping your rate, I mean working for $50-75/hr for the additional hours and keeping it all to yourself, not revaluing your work as a whole. Apologies if that is unclear.
posted by Hiker at 6:26 AM on February 27, 2010

I made the same deal with a friend of mine and I was the Alfred. My friend was a great designer but hated dealing with clients, missed deadlines and was earning an hourly rate that was about 25% of what it should be.

The deal we made was that I was paid by the hour for my work, I was an employee of his. He actually had most of the new client contacts, but I was able to convert them and ensure projects stayed on schedule. It worked out really well, and in the end, we started a company together.

I would say the one big difference is that I have a web marketing background. I am able to write creative briefs, work with freelance programmers, build accurate estimates and understand the creative process.

25% is a high finders fee. If he is project managing the whole deal, then maybe it's more reasonable. I would suggest starting project-by-project and deciding on a percentage or fee for each one. You are going to have to train Alfred not to promise the moon for a $3,000 budget.
posted by dripdripdrop at 8:02 AM on February 27, 2010

I've worked with an Alfred who did the sales and client interaction, as well as money organization, tax-related paperwork, and all the dirty work that I as a freelancer wasn't able to handle. It worked out wonderfully and Alfred has since hired more people on to his small business. Everyone is paid well and has a delineated job function that fits well with their skills. It doesn't have to be a situation where he's taking advantage of you.
posted by theraflu at 8:32 AM on February 27, 2010

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