How Freelancers Can Avoid Old Boot Soup

http://letsfreckle.com/blog/2010/08/old-boot-soup/

by Calamitous • 16 years ago

66 13 16 years ago

skowmunk3• 16 years ago

Had a gut feeling that asking an advance is a "better" practice, in generally making an impression that one is a professional. This article does a great job in making that "why" crystal clear.

But then, there are always exceptions, I have a contractor and his team working for me, for almost 10 months. We started off with 0% advance and still work that way, with the 32nd phase being done right now. It has been a great partnership - he has been very professional. It wasn't that his readiness to agree to 0% advance was the only reason I hired him. I interviewed him for a few hours spread over a few days to get to know him, make sure that he was professional and is what he says he is.

On my part, I also used to take specific measures to ensure that he didn't feel too exposed in his recievables from me. I used to break up bigger features into smaller phases and if any phase got stuck due to technical obstacles, used to schedule smaller payments while stil pegging the final payment with the completion of the phase. I'd rather he focus on getting the work done than worry about getting his payment on time.

dublinclontarf3• 16 years ago

I hate you.

You've had him working for you for 10 months without payment. People have to eat, and unless you've done some deal with him (equity?) this is a clear path to ripping him off.

Saying he doesn't have to worry about payment on time is one thing, but he has to worry about all his expenses. And the longer he works on this without payment the less likely he is to get paid.

Why is he working for free(at the moment)?

stravid• 16 years ago

I think each one of the 32 phases was payed on finish. Otherwise it would be really shocking.

dctoedt• 16 years ago

There may be a misunderstanding here - I got the distinct impression that the commenter (skowmunk) pays early and often for interim deliverables, just not up front.

skowmunk3• 16 years ago

:):)

Hey buddy, your feelings of right and wrong impress me, because I think its very important to have that. But you would have impressed me more if you had read the post in its entirity, before making a statement such as "I hate you".

No hard feelings, i have done that too, we all have growing up to do.

I pay after the close of each phase. For larger phases, I usually break it into 70% after completion of the phase on the testing server, and the rest after completiong on the live server.

When a phase takes too long becuase of some technical problems, i make sure that I pay amounts in between so that he doesn't start worrying about the payments and he doesn't get stretched too thin financially. I still peg a major chunk in such cases to the completion, 50 - 30% of the phase amount, so that his motivation stays high for solving the problems.

It has worked very well, so far. He even has made some really great suggestions on his own, which I value very much. And I usually give bonuses for such good suggestions with the phase payment.

If you want to ensure others are fair to you, you have to ensure that you are fair to them.

Too bad, he couldn't join me full time even after an offer that was good in his own words. I was planning on giving him ESOPs later along with my other employees(didn't tell him at that though).

mcknz• 16 years ago

I often prefer to take 0% advance if I'm busy, in exchange for more flexibility on the deadline.

dublinclontarf3• 16 years ago

For site development, you must charge a deposit, otherwise you will be jerked around.

I began a project for two guys over 3 months ago, did the specification and gave them a time frame for delivery. Laid out the payment plan 10%, 30/30/30 (based on deliverables).

When it actually came time to pay(the deposit) they would't because I have no portfolio (and we're not in the same country). I said fine, when it's done then full payment. It's been 3 months, it's complete design and all, and they still won't pay.

They keep asking for more features (people will often attempt to use payment as a way to strong arm more free features out of you, don't give in), I told them put up or shut up.

On a slightly related note, does anyone want to buy a website to help people keep track if borrowing and lending things to friends?

Edit: Also do the entire site (thats right, every page) in photoshop (or gimp if you're poor) first, don't write a single line of code, get a spec written up in great detail. If they want any more than that, then they have to pay. Stick to the spec, if you see some problem halfway in you can make arangements but you must put it in the spec. Once the spec is complete don't hand the site over until full payment.

mml2• 16 years ago

I often work on projects that have no definable total cost, or even set schedule, which sometimes run into years. Pretty sure I'm not getting a deposit on that. Been doing it for many years (nearly a decade), never been screwed.

Ymmv, may contain nuts.

alister• 16 years ago

The same is true for me (more than a decade of software contracts) and I also have never been screwed.

I have the feeling that the people being jerked around are doing web sites. The problem with standard web work is that (a) the competition is stiff, (b) it is easily contracted out to anyplace in world (making it price sensitive), and (c) you're dealing with the public, i.e., with people who don't know what it takes to do what you do. (My work is sufficiently niche that I deal with managers at software companies or a senior manager if it's not a software company.)

I believe that I manage to bill more in the long run by not taking a deposit. A deposit that's a percentage of the total puts the total as sharp figure in the client's mind. I bill either an hourly or daily rate, and the customer is free to change his mind on the design and add whatever new requirements he wants without worrying about re-negotiating the contract or exceeding a fleetingly discussed total.

mml2• 16 years ago

yeah, i think the key is that these poor guys have to deal with normal humans, where we deal with project managers.

god, i'd shoot myself. pm's are bad enough.

Alex63• 16 years ago

I don't think this is bad advice, but I think it's fairly situation-dependent. Other comments have already called out issues when working on a time & materials basis, etc. I work for a mid-sized consultancy; we do not charge anything up front, but we don't have the cash flow concerns alluded to in the article.

As long as you understand the message you are sending to the client ("I'm concerned about cash flow"), and are OK with that, it's a fine approach. Presumably most free-lancers are OK with the idea that they are not projecting a "big company" image.

Another thing to keep in mind (particularly at the end of the client's fiscal year or fiscal month) is that they may want you to invoice early so they can avoid an accrual. This probably applies more to large businesses than small clients, but you may be able to negotiate for faster payment (e.g., net 10) in return for invoicing to their fiscal schedule.

How Freelancers Can Avoid Old Boot Soup

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