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The Freelance Business Model

When I say that I’m a freelancer or contractor, a lot of people do find the idea interesting. I always say it is a super way to work, if you can live with lots of uncertainty. In general people outside the IT world does not really know what a freelancer is. It is a somewhat undefined concept. How can you just as an individual run a business that helps mega corporations as it is the case for SAP customers.

The uncertainty is that you do not know who you clients will be in a month or half a year and if you will have a job/project. If you can live with that then it is the most ideal form to live with.

You get paid what you are worth and you don’t have to pay for the boss and other staff resources. So it is much more interesting to work an extra hour, since you are getting paid for it.

I was working on creating a talk around being a freelancer. It gave a lot of idea on I need to create a model that describes the freelancing business with a focus on the IT world with my knowledge from the SAP world.

So there are only 6 things that you need to focus on when you are a freelancer. All areas are important and you need to focus one or more areas at the time.

Watch the video to get more information on what the model is about and which key steps that you must take.

If you want to have the Freelance Check List that I refer to then go to

Is there anything that I miss or can improve on?

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  • Hi Daniel,

    I liked your initiative of making your own movies and writing blogs about how working as a freelancer is. I have been working as a freelancer for many years and, as you said, people are very curious about it. Last year, during Teched Las Vegas, SAP Mentor Michael Koch had 2 sessions about it and they were full. I was in one of them and it had a very interesting discussion, with many questions.

    Thanks for posting your thougths. I share them.

    Best regards,


    freelancers #FTW

    • Hi Raquel

      It is not something that everybody has the change to get started with.

      I'm considering if it would it make a sense to make a freelance event at sapphirenow. Dont know the format but it could be an interesting to share some idea and create an open space where people could ask questions.

  • Hi Daniel,

    Good blog/video, but I really don't see this much difference between being a freelancer or an employee. The job security of being a permanent is an illusion, and you need most of these qualities to succeed regardless whether you are permanent or contractor (or what ever you call).

    • Hi Custodio,

      Yes the job security has change dramaticly over the last 10 or so years.

      And some or most of the qualities are the same.

      But the big difference is that you have some shorter contractsa and will be moved around between organisations where you need to create connections.

      You dont have any colleages and so on.

      Internelly you need to sell your self if you wnat to get on different projects, but normally people will just assign you to a project.

    • Hi Custodio,

      i am working as an independent consultant as well and there are 2 main reasons for being self-employed (in my case).

      1) Skills / Knowledge

      Mostly you are not able to go forward, if you reach a specific point of skills / knowledge in your favorite area as an employee. You will configure, administrate or whatever the same (large or small) system landscape and you are not able to see and work in other complex and interesting landscapes. In my opinion it makes only sense to work as an independent consultant, if you are under the top 10 percent (or so) in your area and you are willing to learn and research even more.

      2) Freedom

      Freedom in choosing your work or projects is priceless. You are able to choose your projects, if you are well known as an expert in your area. You can travel, explore different countries and cultures "for free".



      • I do like that you say you need to be in the top 10-20% of the best in your areas. That is also what I normally would consider.

        I do also like the freedom, but somebody may choose freelancing from because they dont want to travel. it can sometimes be deficult to find a project close to your localtion.

      • Hi Stefan,

        Totally agree with your 1st point (skills). As for the second (freedom) I agree it's priceless and also agree you have 100% freedom as independent. But as an employee you can have "a certain level of freedom", i.e. I came to Australia because I want to (as an employee), I traveled most South America because I want to (as an employee) and when my company refused to send me to a project I want to go (and the customer was on their portfolio) I simply left the company I went freelancing to said project.

        Also, related both points, at lat SITMEL I talked to a consultant who said she was not really keen on spending time and energy learning new things such as HANA if they were not going to use it at their company (no skills and no freedom). I told her: you should learn it and find a company that will pay you to use yours skills.



      • First of all Daniel, good thread and like the idea behind it.

        Hi Stefan,

        I agree you do need to be sharp as a knife as a freelancer and have a want to better yourself. This drive to advance and develop your knowledge is imperative to becoming and retaining a successful freelance career. I've encountered a few issues over the years, speaking with hundreds of independent consultants, where freelancers get unstuck and start struggling. In most cases, it boils down to the fact they've been perfectly happy with status quo and comfortably threading water for a long time as the work still came dripping in.

        Some typical pitfalls of being a freelancer I've seen:

        1) They simply don't take the time to go out and learn new skills and gain other competences. Some don't feel it's necessary as Custodio said, which is a very wrong mentality, while others just don't feel they have time for it. It's key that you MAKE time to do this or else you will eventually fall off the band wagon. Just a matter of time.

        2) There's is also a chance, as a freelancer, that you will get pigeonholed and not getting the opportunity to advance your career. Typically a client will hire a contractor because they have a specific issue at hand which this specific contractor can solve. They don't pay premium salaries to a contractor if they have to come on board and learn the robes first. So, there's a group of freelancers who just keeps doing the same work without the chance of advancement which you could find in a permanent employment.

        Saying that though, the freedom a freelancer have to choose and be their own boss is a core attraction.

        Anyways, a few comments from my end.


        • Hi Hans

          Yes it is tough to make time for learning new skills when you know your current client is paying you x$/hour for doing something that may be one of the depricating skills. Then it is hoping that you get to do something else or have some freetime.

          SAP is currently making it easier to learn BPMN an other skills wiht the avialbity of SAP PO on AWS.

        • Hi Hans,

          it all depends on the demand to yourself and the quality of your services (in my opinion). You can take a project (usually IT operation projects by body leasers), that provides you a constant income over several years, but is this really challenging?

          Is this really the reason why you want to become a freelancer? Isn't it nearly the same as a permanent position, if you work in a fix team over several years (not project driven!)?

          For me it is much more important to be a knowledge leader in a specific area (in my case for Oracle database technology and SAP performance tuning) with a large range of customers, that appreciate my provided service quality and are willing to pay for it.

          You can also charge premium salary, if your provided service is premium quality with deep knowledge and you are in the top 10 percent or so. If you get paid premium, you usually can take enough time to research and learn new things ... it is something like a circuit.

          If your provided service quality is "average only", you can not charge the corresponding salary, that allows you to have that "free time".



  • Hi Daniel,

    Thanks for sharing the Free Lancer Bussiness model.

    Definately this will inspire a lot of people to become a free lance one day.

    Impressed, Good Work.