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How to become a freelancer: a complete guide from registering in tax and before receiving first orders

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Here are 14 simple steps to help you create a freelance contract. Once the template is created, adapting it to other freelance assignments will be easy.

Create a document that appears as an invoice. Many word processing programs contain a document wizard and several invoice templates. Open one of these templates or create a new one.

  1. Your contract should be as specific as possible. In the upper right corner of the document you can enter the words SERVICE TERMS, CONTRACT, WORK SPHERE or any other options in bold type size of 12 or 14 points (more than the rest of your type of contract).
  2. On the left side, enter your name, name, address, phone, fax, email, etc. Make sure all your contact information is presented here.
  3. On the right, enter the date and full contact information for your client.
  4. Assign the task number to the project and write it down for your notes (keep a journal of work with tasks). Associate a job number with a specific client and a certain amount of work). Also include this information in your contract, usually over the customer’s contact information, for convenience.
  1. Make a few lines to describe the job description or the scope of work. If you are giving a quote for television commercials, write as many details as possible. For example: Scope of work: Used cars Joe (: 30 TV commercials). Be very specific about what the customer receives. Just because you have policies on your website does not mean that you can be poor in your wording. Example: Commercial copy

    Now you are ready for the heart of your contract. Indicate in detail what you will do for the client and what you will not do. Indicate in detail what information you need from the client. Be specific and do not leave a single room for maneuver. Turn on the completion schedule.

    Save your contract so that you can connect the details for your next project without thinking about it again.

    That's all! To see a sample of the finished contract, click the link in the “Related Resources” section at the bottom of this page.

    Ways to legalize income

    To avoid this, let's look at ways to legalize income. Please note that in some constituent entities of the Russian Federation, procedures may vary, but on average everything is as follows.

    • Benefits:
    1. IP can withdraw money as he wants as much as he wants. Moreover, they are considered the property of the individual entrepreneur, you can at least immediately buy potatoes from the individual's account in the store.
    2. There is no clear amount of share capital.
    3. Less reporting to regulatory authorities.
    4. Benefits for insurance premiums.
    5. Penalties for similar violations are less than those of LLC.
    6. There is no need for full accounting.
    7. The possibility of using more loyal taxation.
    8. Simplified registration procedure due to less documentation.
    9. Smaller state duty.
    • Disadvantages:
    1. Restrictions on the conduct of certain types of entrepreneurial activity.
    2. SP is responsible for everything with personal property. If they write off debts, they can also take the TV out of the house.
    3. Difficulties in expanding the business, namely problems with attracting investors.
    4. The legislative framework regarding IP is not well developed.

    Note LLC is logical to open only when you are sure that you want to become a brand and grow from a freelancer to your own organization.

    • Benefits:
    1. Scalability, namely the ability to attract private investors. In addition, over time, you can grow into a public company and even enter the international market.
    2. It’s easier to work with contractors and receive deferrals, installments, etc.
    3. Branding, yes, the IP does not.
    4. Use of banking services that are not available to IP.
    5. Responsibility is limited. If the money in the LLC account is over, then no one will touch your personal.
    • Disadvantages:
    1. It’s just that you won’t take the money for yourself, you need to accrue salary and pay taxes from this.
    2. A more complicated registration procedure and a larger fee.
    3. A large amount of reporting.
    4. There is more responsibility for obligations, but remember that you do not risk personal property (despite paragraph 5 of the previous list, practice shows that it is rather difficult to sue an LLC, which means it is more difficult to select property if it belongs to the founder and not to the company. But this rather, it is true in courts with individuals. The state is unlikely to want to lose the court and hire better lawyers).
    5. Maintaining full accounting and tax accounting.

    1. IP - 800 rubles and 5 days

    1. Determine the type of activity.
    2. Define the tax system.
    3. Pay state duty - 800 rubles.
    4. Prepare a package of documents for registration of IP:
      • Application for registration of IP (you must be told the necessary form),
      • Copy of the passport of a citizen of the Russian Federation,
      • State duty payment receipt.
    5. Submit documents for registration in tax.
    6. You receive confirmation of registration of IP from tax.
    7. Open a bank account and start working.

    Note In some constituent entities of the Russian Federation, slight differences from the above algorithm are possible.

    2. LLC - 4000 rubles and 7 days

    1. Choose an activity code for OKVED.
    2. Choose the name of LLC.
    3. Choose a legal address (it is advisable to use a real address, rather than the mass registration address).
    4. Determine the number of founders (you can with a partner, or you can).
    5. Choose a tax system (this will be discussed below).
    6. Form the authorized capital of LLC.
    7. Pay the state fee (the same 4000).
    8. Prepare a package of documents for registration:
      • Application for registration of LLC (the form will be prompted on the spot),
      • Charter of LLC,
      • The decision to create an LLC or the minutes of the meeting of founders, if you are alone or with another, respectively,
      • State duty payment receipt,
      • Application for the transition to the simplified tax system, if necessary.
    9. Submit your tax registration documents.
    10. You receive registration confirmation documents.
    11. Order a print.
    12. Open a bank account and start working.

    If you decide to open an IP or LLC, then do not rush to pay for everything yourself. Your region may have financial support programs for entrepreneurship.

    Tax systems

    We will consider the following tax systems for IP / LLC: OSNO, USN, PSN (only for IP).

    OSNO (general taxation system) is a traditional regime in which companies keep full records, submit reports every 4 months, and also pay the following taxes:

    • IP
    1. PIT - taxed income at a rate of 13%.
    2. The property tax of individuals - depends on the entire inventory value of the property and is 0.1% -2.0%.
    3. VAT - a tax on the sale of goods, works or services. May be charged at the following rates: 0%, 10%, 18%.
    • Ltd
    1. Corporate profit tax - tax is payable at a rate of 20%.
    2. Corporate property tax - all property is taxed in full, even a bicycle, if any, at a rate of up to 2.2%.
    3. VAT - sales of goods, works or services are taxed at the following rates: 0%, 10% and 18%.

    STS (simplified taxation system) is a taxation system in which an individual entrepreneur or LLC is exempt from paying VAT, income tax (only LLC), personal income tax, property tax (only individual entrepreneurs). The remaining taxes and fees are transferred in a standard manner (transport, land and water taxes, as well as contributions to the PF of the Russian Federation and the Social Insurance Fund). By the way, the simplified tax system is further divided into:

    1. STS income (6% rate, reporting once a year, pay 4 times a year),
    2. STS income, reduced by the amount of expenses (rate of 5-15%, reporting once a year, we pay 4 times a year).

    In addition, in some entities, local authorities may lower the tax rate, so check with your region. Note that this form of taxation (STS in general) is much more suitable for small and medium-sized businesses than OSNO. You don’t want to pay huge taxes? So have time to execute on time the simplified tax system, if you still succumb to the business. Fortunately, programmers are not included in the list of exceptions from the STS.

    3. PSN (only IP)

    PSN (patent tax system) - only IP can be used. In this system, a patent is acquired, the value of which replaces the payment of taxes. Such a document shall be issued for a period not exceeding one year.

    • What is taxed: potential income (calculated separately).
    • What is the rate: 6%.
    • Frequency of payment: once a year.
    • Reporting: no.
    • What is sad: you need to pay even at a loss.

    Output: if you are legalizing, it’s better to hurry to register on the simplified tax system, so as not to pay big money in the future. One day, perhaps, you will switch to the main taxation system, but for this you will need to earn more. We sincerely wish you to make such money yourself, without partners.

    If you decide to open a business, then remember that there are also insurance premiums other than taxes. For example, for an individual entrepreneur in 2018, the insurance premium is 32,385 rubles + 1% from incomes exceeding 300,000 rubles. This fee must be paid even if you, as an entrepreneur, have been inactive for the whole year.

    A small summary: if you, for example, are a computer science teacher and get a small salary, but you have some random part-time jobs, then, from the point of view of common sense, registering an IP or LLC will only hit your budget and nerves. It’s easier for you to spend a couple of days and calculate all third-party income for the year and pay 13% of the tax.

    If you get good income and permanent orders on the side, which in a month give you more income than the salaries of two teachers in a provincial town, then it is better to register an IP, because the tax one will anyway notice your shadow income and this will result in big losses for you, both temporary and material.

    How and where to start working?

    Before you leave your current job and fully switch to freelance, think it over again. After all, first you need to create at least some kind of financial “pillow” so that you can provide yourself at least for one quarter. Keep in mind that you can get sick and there will be less money ... Read more about the hospital freelancer in the article on TJ.

    In addition to a financial pillow, it is desirable to have a portfolio with the work performed. If it is not, then it is better to start creating it on the weekend or in the evenings after work. How to do it? Take part in open source projects. To do this, just go to GitHub or read our articles:

    How to correctly contribute to Open Source, MarcDiethelm user on GitHub painted in details.

    Once you have a portfolio, you can create your own website so that you can at least somehow be found on the Web and look at your work. You can do this absolutely for free (only pay for the LCD) with Jekyll [video tutorial series] and GitHub Pages.

    So, there is a representative office on the Web, there is a portfolio, registered (or not) IP, but there are no orders. What to do? Do not panic, you did not quit your current job, right? Now you have two roads and you can choose both: offline and / or online.

    We go to any bulletin board, write about ourselves as briefly and on the case as possible (only without cheating) and wait for feedback. It’s better to write an ad on several boards, so there will be more effect. Do not forget that you should always insure yourself when working with customers. To do this, you can take a prepayment and draw up a contract.

    It’s best to work online on freelance exchanges - you are usually insured against fraud on them, since the exchange administration acts as an intermediary between you and the customer.

    2.1. International exchanges

    99designs - if you are a programmer, but you can still design. Probably the top among exchanges for designers. Everything is legal, payment is large, guaranteed to come. But, as you understand, everything cannot be rosy - you have to prove your professionalism with the help of a portfolio, and also confirm your identity with the help of a passport.

    Freelancer.com - here you have to search in projects, because The path to contests is open only to those who work with graphics. Nevertheless, it is quite possible to make money there, only PayPal will have to bind and load the portfolio, otherwise no one will choose you.

    Toptal is the pinnacle among freelance exchanges for programmers. They will take only the most skilled and quick-witted. So get well prepared if you aim to get there. This way is open for designers, but mostly UI / UX.

    Envato Studio - like WordPress? Are you an expert in it? Then, perhaps, this exchange is exactly what you need. Basically, everyone wants to get adaptive HTML from the PSD, and sometimes they ask to make a theme out of WP from it. By the way, at ThemeForest you can sell your topics, if you wish, the resource belongs to the Envato network of sites.

    Upwork - here the average payment for a project is about 60,000 rubles, but the competition is also not weak. However, this site can serve as an addition to the portfolio, since there are different tests in various subjects. In general, different exchanges have such tests, but it will be more prestigious to refer to this.

    Fiverr - a lot of orders with a rate of 5-10 dollars for labor at a price of 50-100, but nevertheless, if you urgently need to make a payment for a mortgage or a loan, but you do not have money and orders, then try your luck here.

    Gigster - only top designers, programmers and project managers are hired here. All work is done in teams.

    WPHired - this exchange offers work related only to WordPress. There are both projects and full-fledged vacancies.

    StackOverflow Careers - Used to ask questions on this site? Now you can look for work in your free time.

    2.2. Russian-speaking exchanges

    Freelansim is a Habr freelancer platform. There are orders and there are many of them - all according to different technologies and categories, but basically you need to do something with the site.

    Freelance.ru and FL.ru are the two most popular Russian exchanges, the competition, as you know, is very big there (according to the author, sometimes even more than on foreign exchanges like freelancer.com).

    Yukon is an exchange for those who do not want to especially disseminate their data on the network. They also accept payment in cryptocurrencies.

    Also pay attention to work-zilla and weblancer.

    Warning

    If a potential client writes to you and offers to complete a test task before starting work, then send him a link to the portfolio. If even after that he asks to write a test site or some kind of program, then invite him to pay you a test fee. Or rather, offer to meet and conclude a contract, if possible. So you can protect yourself from free labor on scammers.

    Remember that more often the test task is asked to be completed when you want to get somewhere. If a person came to you with a job offer, it means that he made his choice. And they don’t go to another’s monastery with their charter. Just keep that in mind.

    Conclusion

    You can combine work as a freelancer on the stock exchange and offline. So you get more money. But remember that in reality the client comes to you, because he has already made a choice or is making it among a narrow circle of specialists, and on the Internet you yourself will be something like a client for a client. Yes, it sounds strange, but freelancers often compete so much that they are willing to lower the price to a minimum. Therefore, do not rush to quit your job after the sweet tales of an electrician freelancer or tailor freelancer. Their professions are always and everywhere in demand, yours too, but it is more unique and not the fact that there will be many orders in your city.

    Cons Freelance Online

    • Very big competition.
    • You need to have a fairly large portfolio in order to stand out from other programmers (this mainly concerns web developers, but still).
    • When working with foreign exchanges, it is advisable to know English and, just in case, another popular European language (for example, German or Spanish).
    • The difference in time zones. The customer’s response may be delayed if there is night in his country and you have a day.
    • Sometimes the exchange can freeze money for the period to resolve the dispute with the customer. Sometimes the exchange may decide not in your direction.
    • Commissions of the exchange and banks for money transfers.
    • The exchange may not withdraw money to Russian payment systems (in this case, there is PayPal).

    Online Freelance Pros

    • Relative anonymity, the ability to restore reputation with a new nickname.
    • The ability to work from anywhere in the world where there is Internet.
    • The intermediary (exchange) regulates disputes and saves your money (or not yours yet) in case of a dispute.
    • The work is based on the following chain: TK-result-edit-payment. That is, without unnecessary conversations with the customer.
    • A variety of payment systems for remuneration.
    • Payment of orders in foreign currency.

    Cons Freelance in reality

    • Lack of customers at first.
    • The need for promotion.
    • Here you will not be able to change your nickname and start all over again with a damaged reputation.
    • It is advisable to have at least some office or a normal place for meetings with customers.
    • The need to communicate with customers directly, sometimes to offer their work by going around local enterprises.

    The advantages of freelance in reality

    • Relations with the customer are regulated by a contract with which you can directly go to court and receive compensation.
    • There are no commissions when transferring from card to card (or not as large as that of exchanges) or when paying in cash.
    • Communication takes place in the native language.
    • You receive money upon completion of the task.
    • The ability to take a prepayment.

    However, remember that leaving a permanent job is a big financial risk if you do not have other sources of income and you rely only on freelance.First, create a financial pillow, then evaluate your moral stamina, write a list of reasons why you need to go to freelance, evaluate the situation around you and the demand for your knowledge, and only then go into a little freelance. It will be safer for both finance and nerves.

    How Yandex uses your data and machine learning to personalize services - read and watch YaC 2019.

    Does freelancer need a contract?

    Work without a contract for a freelancer (both a novice and an experienced one) is fraught with a number of unpleasant situations. The contract will protect you from cheating with payment of the order and make you study time management and plan your day - this disciplines. It often happens that you are forced to redo an already completed order, and waste precious time. This would not have happened if the freelancer had a contract in which there was a clause stating that editing of the finished material would be done only for a fee. At the same time, we understand that there is a need to issue a contract for a freelancer, but for some reason we are afraid to turn to a lawyer.

    The most sought after freelancers on the market

    Tip: it is better if the wording of the terms of the contract is simple.

    A contract can be drawn up without a lawyer. It is important to understand how beneficial it is for you to work and to stipulate these conditions in the text of the contract.

    • Terms of payment for an order to a freelancer

    Set a clear payment amount for your services. You can ask to pay for an hour of work or make up the total cost of the order.

    The customer must agree to your terms, otherwise then he simply refuses to pay. When choosing an hourly wage, indicate the minimum and maximum amount. This will guarantee that you will be paid a fixed amount, even if you submit the project ahead of schedule. However, it is worth considering that the project can be difficult, but at the same time you will not be paid more than the maximum amount indicated by you. Take this into account when determining the volume of the order taken.

    The simplest scheme - half of the amount paid by the customer immediately, half - after the completion of the finished project. If you come across a large customer, you can ask for an advance payment of 40 percent, another 40 after delivery of the first layout and the rest of the amount - after the final reduction of the order. This scheme also needs to be specified in the contract. In addition, consider the way you receive money and the possibility of deferring the transfer.

    • Freelancer feedback with the boss

    You report to one person, even if you received a collective order, otherwise multiple edits and misunderstandings cannot be avoided. You are not required to do double work. Specify your remuneration if the work on the order is almost completed, but then the customer sharply no longer needs it. This paragraph stipulates your reward for the time and effort spent. You can take 50 or 25 percent of the total value of the finished order.

    Specify a clear number of changes to the project, and whether they will be paid to you later. Basically, the customer has the right to triple unpaid adjustment of the finished text. All other edits should be paid.

    • Protection against turning a small order into a large one

    There is nothing profitable in this - the customer asks to add some components, and for free. This is repeated periodically. The contract will allow you to independently regulate the level of ongoing projects and require payment for all the additions you make.

    • Copyright law

    Copyright may vary, but you lose ownership of the text after the customer pays for the project. Copyright protection is necessary if you want to pay you in full or use the text for the purpose that was specified in the terms of reference. This paragraph also protects the customer’s rights to own your text: having paid you an advance, he buys the copyright to the text, therefore, you need to write a unique text that has not been published anywhere.

    Freelancers should not take on the so-called "Perpetual orders" - this is extremely disadvantageous. The customer must stipulate the deadline for the project - this is in your joint interests. The time frame of projects allows you to consolidate the work schedule and perform work in stages.

    On video: Profitable Freelance

    Freelance is great!

    On the video: Personal growth freelancer

    Why do you need a web design contract

    In addition to protection, contracts contribute to your peace of mind as well as the success of your business. When you were a beginner, less experienced and optimistic, you probably thought or said:

    • “I have a small business, I do not need a contract”
    • “This is a small project, why conclude a contract?”
    • “I do not want to scare customers with the imposition of documentation”
    • “I trust my clients in paying for the work that I do”
    • “I have never had problems that would require a contract to resolve”

    Being an overloaded novice freelancer, you dealt with all kinds of processes, and adding a piece of overly legal documentation to this mix sounded crazy. But as a recognized professional, it's time to act decisively.

    Different web designers and developers need different contracts

    There is no single solution for everyone, and a web development agreement that is right for you may not be suitable for others. Contracts are crucial in:

    • Defining a clear scope of the promised results.
    • Guarantees that you will be paid.
    • A description of the role of each party in the process, including actions, confidentiality, and the consequences of not fulfilling that role.
    • Clarification of who owns the work after delivery.
    • An explanation of the activities after delivery, in terms of changes, warranties and obligations.
    • Mitigate common “what if this happens” scenarios.
    • Protecting yourself in certain situations.
    • Create a useful reference document for future reference.
    • Creating the conditions for a successful relationship.

    Bad customer situations help create a great web design contract

    Typically, customers have no idea what is involved in building a website.

    You hope that they understand that they are paying for your professional experience and that you will lead, train and forgive the process as much as possible. It is your responsibility to avoid confusion, especially regarding results and compensation.

    If each client were perfect, you would not need a web development agreement. If all arrangements went according to plan, there would be no terrible stories about web professionals or clients.

    The web design contract helps you to avoid bad situations, including misunderstandings, erroneous assumptions, lack of respect, naughty behavior and the feeling that one of the parties took advantage of the other or abused.

    These situations come from communication problems, and a clear, well-written web design contract can help avoid them. If you are faced with a new difficult situation with the client, consider adding a new item to your contract.

    Why Your Customers Need a Web Design Contract

    Web professionals and clients share many of the needs covered by contracts, such as clarifying the scope of results and rewarding those results.

    The website development agreement creates a mutual agreement on both sides, setting expectations, setting boundaries and explaining how everything works. In addition, the contracts:

    • They create accountability between the client and his service provider so that the project is completed on time and within budget.
    • They develop an idea of ​​the roles that each side will play in the project, who is responsible for what, and, in particular, what they should do and provide each other so that the results are achieved.
    • Ensure that they hire a professional who is serious about their business and work.

    We start the process by calculating the cost of the project

    Most projects start with a theoretical form of preliminary documentation that initiates a discussion of the cost of the project - and ideally leads to a more formal contract.

    Four options for presenting value cover increasing levels of complexity, formality, and required work.

    Preliminary calculation

    They give a general idea of ​​whether services can be provided within the budget at the required time of the client - and are offered with the understanding that the details may change as more information is received about the requirements.

    This can be useful at an early stage to manage customer expectations. Estimates are considered variable, given the likelihood of unknown factors, and are not legally binding.

    You may not be required to complete the work at an estimated price.

    They are more formal, with a fixed rate, limited by an allowable period of time. If your price is accepted as a formal agreement, be prepared to complete the project at this price.

    This is ideal for well-defined fixed-price services, such as a service plan.

    The inclusion of a time limit protects the price depending on the purchase of other products, such as hosting or SSL certificate, as these prices may increase.

    Price offers

    They provide documented answers to a set of well-defined specifications, often presented in competition with other offers.

    Price offers are best when you are confident that you can offer a winning solution that meets all the requirements at a competitive price.

    As a rule, you save time and work on collecting requirements before fixing costs, and these requirements are clear, including expectations. However, price proposals are often presented without detailed discussion, which leaves little room for negotiation, and is often evaluated with emphasis on the resulting summary information.

    Project proposals

    They provide an exhaustive, detailed document and are ideal for letting you outshine your competitors.

    It is an ideal platform for placing your portfolio of similar work and highlighting your unique selling proposition (UTP), demonstrating your value and ability to do the work.

    Although this is the most time-consuming option, it works well for complex projects where you can offer several options or solutions.

    After you have agreed with the client on an agreement based on one of the above methods, it is time to conclude an agreement with a comprehensive agreement.

    Keep it simple

    An overly complex web design contract can lead to confusion or misinterpretation.

    The best contracts are simple and make sense to everyone, regardless of their legal competence.

    Optimized text improves understanding on both sides. By minimizing legal and technical jargon, you also eliminate the possibility that the client will accuse you of misinterpreting what you have written.

    Make it readable

    You know all about readability for websites, and many of the same principles apply here.

    Keep your fonts simple by avoiding excessive underlining, italics, bold, or capitalization. Use text large enough for easy reading, with good use of spaces, line spacing, and page numbers. Subheadings help organize information for easy searching in a document.

    Treat each customer as a special occasion.

    Each client and project has its own special needs.

    An overly generic web design contract may be out of date for most customers.

    Instead, start with your own comprehensive template and tailor it to the needs of each client.

    3. Financial performance
    • Terms of payment, including prepayment, payment schedule, prepayment benefits
    • Accepted payment methods, including online payments
    • What will happen financially if the project is canceled or remains inactive for some time?
    • Details of how your process works, including the steps, who will be involved, and when changes and approvals are needed.
    • Roles of your team and client team
    • Materials and resources that customers must provide
    5. The legal part
    • Copyright and ownership of the work
    • Location of legal documents and procedures
    • Job guarantee
    • Support and Service
    • Dispute resolution
    • Privacy and Confidentiality
    • Cancellation or termination of the contract

    Resources for your web design contract

    Developing your own contract from scratch can take a lot of time, and you can forget something important. Again, paying someone else to create your contract is expensive. Especially if it is necessary to draw up a new contract every time.

    The tradeoff begins with finding a free custom web design contract template.

    Ideally, you should find a well-tested web design contract template that has all the necessary elements and has been valid for many years.

    Tips for Using Contract Templates

    A template is just a starting point. Even an ideal template requires customization: the person who created this template did not know you, your business, or your customers.

    Combine the best elements of several templates. Make changes by selecting the appropriate elements from several contracts to create your own super-template.

    Have a few people review your final version. If you think you have created the perfect template, ask those you trust to study it, including colleagues, friends, or your lawyer.

    Correct.Again and again. Review and review until you decide that everything is perfect. Postpone the contract for a day or two, then read it again.

    Common Web Design Contract Mistakes

    Beware of common contract errors that can make your web design contract useless or unenforceable.

    Dates: The dates of preparation and signing should be clearly indicated, as well as any dates associated with the results or payments.

    Refusal of help: if you feel you cannot write a good contract, even starting with a web design contract template, consider hiring a lawyer. It will be an investment in protecting yourself from potentially costly mistakes.

    Signing: Of course, you and your client must sign a contract. When working with more than one company, make sure that you have the correct signature. Make sure that you and the client have full signed copies.

    Final thoughts on your web design contract

    Your ultimate goal is to create a clear, but at the same time concise contract, covering the bulk of the scope of work, end results, financial indicators, timelines, processes and legal responsibilities - at the same time building trust and respect, as well as providing everything that potential customers need to make a decision to continue your cooperation in the future.

    All successful work and creativity!

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