Poll: What Do You Hate About Contracting? • Hacker News Board

Re: Poll: What Do You Hate About Contracting?

#61

Post by superkinz » Fri, Sep 16, 2011, 4:13 PM UTC

tptacek wrote: post #41

dotBen wrote: post #26

Earlier quoted context omitted.

You need to get 50% payment upfront. Or work in blocks of money on account (eg for a $50k job, you have the client send you $10k in advance and when that is near depleted you have them wire you the next $10k, etc)

If Colin's clients are anything like our clients (very likely), that's a bad idea. Nobody he competes with is asking for anything up front. Breaking projects into billable milestones is a good idea for other reasons (it's a buffer against scope creep, providing you with periodic scope/schedule resync points), but it doesn't solve the payables problem. It's bad business to tell a client "I'm not going to proceed on mi…

It depends on the expectations. If you enter into the project with an agreement that work done on time deserves money paid on time, then everybody needs to hold their end of the bargain up.

And when you get 3 on time payments, and then the 4th is slipping you have to wonder if it's because they are having trouble getting the money. If they're having trouble getting money, why on earth would you waste your time working on a project that you won't get compensated for?

I think it's totally appropriate to expect on time payment if they can expect on time work. There's no reason it should be a one-sided agreement. How you reinforce that is up to you. But I don't think that communicating that their late payment is making you nervous and uncomfortable with the project is out of the question.

On a previous gig, this worked well on. I started seeing issues on his end with paying on time and it was rooted in ability to get the cash. Danger! He needed the project done asap, and couldn't afford me putting it on hold as I waited for money to come through. I communicated nervousness, so he had to hustle to get the cash.

Of course, once my work was done, it took quite a while to get final payment. It makes me wish I had a way of putting the design files in escrow of some sort, so that at least the pain was shared.

Re: Poll: What Do You Hate About Contracting?

#62

Post by kls » Fri, Sep 16, 2011, 5:29 PM UTC

rpwilcox wrote: post #49

kls wrote: post #45

Earlier quoted context omitted.

If they don't give me a budget I give them an hourly rate until I know what budget they are working with. That said, I prefer to work on an hourly arrangement if at all possible.

I think starting with an hourly rate is uninformative. For example, if a client's budget is low I might grab a RAD tool to get the job done (while letting the client know that this decision might hinder flexibility in the future.). "You want a database on the web, that you can customize yourself, for $600? Great, let's grab a copy of FileMaker Pro, or sign up for Quickbase.com and get going" Yes, those solutions may…

In my experience an hourly rate usually either a) extracts the budget number that they have or b) gets the response of OK lets just do it hourly or c) I get show to the door.

In situation A it is usually because they see my hourly rate a pricy and so they give up their max budget, as a negotiating tool. In which case I tailor the solution to that budget.

In situation B they generally have a budget in which they don't see my cost as even making a dent in.

Finally in C generally we would have never had a meeting of the minds in the first place. I don't compete on price, there was a point where I had the price shoppers filtered out of my sales pipeline, but as we are bringing on new clients again, we do end up in situation C from time to time.

Re: Poll: What Do You Hate About Contracting?

#63

Post by rpwilcox » Fri, Sep 16, 2011, 6:31 PM UTC

superkinz wrote: post #60

rpwilcox wrote: post #42

Earlier quoted context omitted.

I have a policy in which I don't estimate jobs where my gut says will take more than 40 hours worth of work. Beyond that it's Agile style iteration work. I think this has two advantages: I don't put that much time into "no real business here" leads, or (if there is business there), there's no way I know the whole scope of a large project in one conversation.

That's interesting. So when you say that it's more than 40 hours (at least $X cost), do you still give a high end range or just say "we'll see how it goes?"

I'm not sure a high end range makes sense without sitting down with the client and spending time on creating an Agile product backlog. (With a product backlog then we can start getting a vague scope).

I've actually revised my standard "potential lead" email based on some of the conversations in this thread. I now make it explicit that (a) I can help put together an Agile product backlog, for those larger project, and (b) make my hourly rate for this project manager/product owner work very explicit (to filter out those that don't actually have money)

Re: Poll: What Do You Hate About Contracting?

#64

Post by MatthewPhillips » Fri, Sep 16, 2011, 6:40 PM UTC

cperciva wrote: post #12

Getting paid. I finish work; I send an invoice; I get an email back saying "thanks, we'll process this right away"; and I wait. A month later, I send another email and get told that it "slipped through the cracks" or "got lost", and a week later I get a check in the mail. I think I'm batting roughly a 50% average on getting paid without sending the "uh, where's my money" email. I always get paid eventually and withou…

In the future I would suggest adding a clause for late payments into your contract. The longer they wait to pay you the more they make on interest. The only incentive they have to pay you on time is to avoid being charged for it.

Assuming you don't want to burn bridges I'd play it this way. Invoice them for late payment and if they call you complaining tell them that it's automated by the invoicing software you use and you'll let it slide this time. That sends them the message that prompt payment matters. If they do it a second time screw em.