Wednesday, December 27, 2006

Freelancing in India

Many young people from India are writing to me asking about freelancing. If you are also ‘bitten’ by the freelance bug – and you are thinking of writing to me, read this before you shoot that email to me.

I believe self employment will take off in a big way in India in the next two to five years – therefore, there will be lot of scope for people to be on their own. There is a need for specialized knowledge, speed and flexibility in our industry. Many people are now well connected, well travelled and they know their bearings well. All this means that the situation is ‘cooking’. It is the right time to jump in for the early mover advantage.

However, freelancing is a difficult thing to make it work – anywhere in the world, and especially in India. It is not going to be straightforward.

First, let me dispel a few myths – freelancing is not financially lucrative in the long run. People who work as freelancers do so because they love to be independent, have some time on their hand to pursue various other interests and generally be the trailblazers. It is not a road to make wealth. If you are a Peter Drucker – it may be different, but even for Drucker – he would have made lot more money if he started his own company or worked for some other big company.

There is never any ‘job’ security if you are on your own – it is always a struggle to find the next project, and do it well and have some regular income.

There are a few tax advantages – but the overall expenses far out weigh any tax advantages. For example, you have to invest in your own training, and in your own career. If you work for any large IT-Company, they take care of all your training needs. If you work for a large IT company in India, this amounts to about 50K per year (including the training expenses + the salary you get even though you are attending training). Similarly, there are many other expenses if you are on your own. These days many IT companies provide many perks – which are tax free incentives, you don’t get anything more if you are a freelancer.

Part time job, second income is completely different from being on your own. There is no comparison at all.

There is also a big difference between contracting and consulting. One is getting some work and executing it, and the other is lending your expertise to produce results. These two ways of engagement work very differently.

So, think carefully before making a move. You can always get the first couple of contracts – but can you get business for the rest of your life? I do not want to discourage anyone – but only trying to throw some light on a few dark areas that people generally don’t see.

Now, here are a few tips:

To be successful you have to:
  • Establish your credentials – credentials are not your resume, but your expertise and demonstrating that you can deliver. What you can do is to first try and get some work from internet. There are now some websites like, etc., - which help freelancers find work across the globe. You can register yourself on these websites. It works pretty much similar to e-bay. Some companies post their requirements – and you can bid for projects, execute them from home. I suggest that you find out more about sites like this, and see if there is some work there that fits your skills and what you are looking for.
  • Transition from ‘a skilled person’ to ‘an expert’ – you have to develop certain techniques, a way of doing your work that establishes your expertise. You have to learn to write well, communicate well, publish some papers, have a website of your own and carve out for yourself a niche. There are tons of open sources projects these days – if you participate in these projects, you get to learn the world class standards that are used today, and also you get to meet other people who are freelancers and create a network of your own.
  • Have a network of contacts, friends and others from the same area. If you are working in a company – even though you don’t realize, you are part of a community which ensures that you get to know a lot of things from the environment. If you are a freelancer, you have to cultivate different kinds of relationships. There are many ways of accomplishing this – membership in professional bodies, attending conferences, teaching in universities, making contact with a group of people who work in your area (see point no: 2).
  • Understand how consulting works. There are some excellent reference books on this subject. Flawless Consulting by Peter Block, Consultant’s calling by Bellman, Soloing are some books that I recommend. Read them, understand them and then think about how to go about it.
  • Read a lot. You have to read many different kinds of books – not just technical books. The general thumb rule is that you have to be able to read at least 500 pages of material every week and absorb it. If you claim to be a knowledge worker – you have to have knowledge. Right? Some books I suggest to begin with: Gerald Weinberg’s books on Software Engineering, Quality Software Management and his books on consulting. Also books on agile techniques. Books on systems thinking, history and some poetry. Definitely you have to know a great deal about accounting, managing your own finances and legal aspects of self employment.
  • Invest in your own career. This means that you have to have a definite idea of how much free time you will have, and how you will use the free time. If you do billing work all through the year – you will become stagnated very fast, and you can’t get business the next year. Our field evolves very fast, and for a freelancer it is very important to be on top of the technology. Therefore, it is mandatory that you have a definite plan how to stay ahead – this will include, reading a lot, attending workshops and training programs, write and communicate, teach and so on. In financial terms, you have to invest at least 30% of your revenue in your own learning at least in the initial years.

That’s pretty much it. If you are committed to it – it is not hard. Believe in yourself, make a small begining, do it well and don’t give up. That’s all there is to it.

1 comment:

Shah said...

Realising the truth from your experience!