11 ms·

Being able to sell and do the whole business BS thing is vitally important. If you can't do it, hire someone or get a friend/relative to help. Under promise, o

Being able to sell and do the whole business BS thing is vitally important. If you can't do it, hire someone or get a friend/relative to help. Under promise, over deliver. (slightly) Become an authority on your subject matter. Write blog posts, post often on twitter, write to journals/newspapers - set yourself up as someone who knows what they are doing. Charge for spec work. Don't be afraid to turn down work that may challenge you more than you can handle. You are taking an unnecessary risk. In those circumstance you can offer to help the client find the right consultant/solution provider. ALWAYS get a deposit before work begins. And then insist on regular payments for longer projects - if payments stop, you stop work. Don't do fixed fee work, unless you REALLY, REALLY trust the client. Good relationships are vital. If a client likes you they will market you through word of mouth and that's the best kind of advertising. Have a plan in place to deal with non-payments or difficult clients. Be consistent and don't let bad clients take advantage of you. Offer no credit terms longer than 28 days. Offer a 5% discount for quick payment. If you are providing software before full payment is received, don't be afraid to use a licensing mechanism to shut it down if payment fails to materialise. A friend lost €20k in a similar situation. Also, bear in mind you will work long hours. That's why I couldn't keep doing it. I was making decent money, but the hours, and travel, were killing me.

balfirevic 7y ago
Why couldn't you work less hours? Was it just a matter of hourly rate being too low for you to be satisfied with the income on fewer hours or is there something else?
- andersonmvd 7y ago
  Saying "no" is a challenge for human begins in all levels.
reikonomusha 7y ago
What’s wrong with fixed-fee if a fully specified statement of work is made with clear, objective test criteria?
- detaro 7y ago
  That it's often extremely difficult and lots of overhead to have such a thing, and clients typically are larger than you and have less to loose by arguing about it endlessly.
  - HeyLaughingBoy 7y ago
    That really depends on the project. One of the reasons I only take very small projects is that the scope is typically limited and clearly understood so it's easier to offer a fixed bid with little risk.
- kradroy 7y ago
  As someone who's done over a dozen fixed-fee jobs - DON'T DO IT. There are too many unknowns, even in "simple" jobs. It won't be worth your time and you'll regret it. In order to make fixed-fee contracts worth it I had to cut corners. I hated doing that, but I preferred it to dropping the contract altogether (sunk costs fallacy). I've also found the clients who insist on fixed-fee contracts to be very demanding and petty. They tended to interpret the specs liberally. It's not worth the hassle. Trust me.
  - avinium 7y ago
    As someone who's been on both sides of the table - client and contractor - I completely agree. I never do or ask for fixed-fee. When I'm the client, I feel fixed-fee gives the contractor an easy backstop/fallback position - they figure they can half-ass the job and use the additional time to scout for more work. When I'm the contractor, it's the same, but in reverse - fixed-fee makes clients feel like they can demand the moon beyond spec at no additional cost. Hourly/daily rates make sure that BOTH parties have something at risk, which tends to be keep everybody in line. The contractor's at risk of the client firing them. The client's money is at risk if they keep demanding endless revisions. Actually a good lesson for business in general.
- pault 7y ago
  What's wrong with it is that every spec will always be open to interpretation. You will interpret it as the minimum amount of functionality; the client will interpret it as the maximum. The only spec that isn't open to interpretation is the code itself. :)
kradroy 7y ago
These are all excellent and were all things that I practiced/discovered in my consulting days. The only thing I would add is: Never reduce your hourly rate for any client. For repeat clients they will expect that rate again. Many of your clients may know each other. They talk to each other and soon many of them will be asking why you can't give them a discount. You can offer discounts in exchange for an action (like quick payment mentioned above). Never devalue your time.
- jaden 7y ago
  +1 - I gave a reduced rate to a client who was tight on funds as a favor. They began referring friends (thinking they were returning the favor) but the new clients had the expectation of low cost. Clients attracted by low rates are rarely the kind you want to attract.
- enobrev 7y ago
  I generally agree, although whenever a rate is reduced for any reason, it should be stated out loud and in writing and on every invoice with a clear end date or specification for the reduction. Never let the special deal be forgotten as anything other than a special deal and after the deal is up, raise your rates back to normal without hesitation or apology.
  - toomuchtodo 7y ago
    Never reduce your rate. Always make it clear on the invoice what your rate is, and apply a clearly explained discount to the invoice. Discounts are temporary, rates are sticky.
  - neltnerb 7y ago
    Just offer to help them scope something you can do within their budget, and maybe it involves training them to do it themselves. Or just a better (simpler) design anyway with better milestones and focus on deliverable prototypes.
- speedplane 7y ago
  > The only thing I would add is: Never reduce your hourly rate for any client. ... Never devalue your time. I generally agree with this, but there are some exceptions: 1. For large, repeat clients that have demonstrated loyalty, it's okay to offer a modest discount, no more than 10%. You still cite your rack rate on the invoice, but at the end add a "Loyalty Discount" so they know they are getting this discount for a reason. 2. While you should not reduce your rate, it can be okay to write off your time. If it takes you 20 hours to do something, but you're afraid the client will balk at the bill and run away, rather than lowering your rate, invoice them for 10 hours, or whatever seems reasonable. 3. When you're just starting out, and have limited understanding of the value of your skills compared to the competition, you may not know what your rate should be. In these cases, you may want to consider flat rate arrangements.
tptacek 7y ago
Hiring people to sell is dangerous. Effective salespeople are money-printing machines. If they didn't know that about themselves, they wouldn't be effective salespeople. So there is a serious adverse selection problem here: the most effective salespeople have their pick of who to work for. The hiring pool for salespeople is full of --- dominated by, probably --- salespeople who are much better at selling you on why you should keep paying them despite them closing no deals than on selling your customers anything. You should learn how to "sell". That means a bunch of different things depending on how you decide to sell and is a basic business decision you should make early on. Make the decision such that your team can do the sales work. Hire sales when you have your process proven and nailed down. 37signals really got hiring right: you should (generally) hire a role after you've figured out how to do it yourself and doing it over and over again is becoming a material drag on the company. If you feel like you need a deposit to start a project, don't do the project. In 14 years of consulting, including software development projects, I've never taken a prepayment. I can't remember a real problem I've had. I can, however, think of a lot of clients I've said "no" to because they didn't seem to have their shit together.
- thatoneuser 7y ago
  No offense but on the pre payment thing you sound like someone who was fortunate enough to have a vast network of clients you already knew and trust. Which is not the case for most.
  - tptacek 7y ago
    Things were pretty lean when we started, but sure, that might be true.
  - neltnerb 7y ago
    I've never asked for a pre-payment, but I've figured out a small project to do for them and made clear that at each milestone they're welcome to walk and I'll support their new person with whatever documentation they need though I won't offer "support" in the sense of hours of my life training people unless I'm getting paid, which is usually not a big deal. They don't seem to have a worry about paying you to train the new person, but do seem to worry that your emotions about being let go will impact the timeline. Their real worry is that you'll suck and delay things, by making clear that you understand that such things happen and will help as you can if it does you improve trust. And you should really be doing that anyway ethically. And realize that sometimes you're just not the right person for the job and to help them find the right person if you want to build a strong network.
poundtown 7y ago
yes the backend of busines has got to be taken seriously. getting invoices out, paying bills, billing people etc these are the things that will kill your time. i am fortunate in that my spouse is a wiz at this so i can focus solely on doing the job.

balfirevic 7y ago

Why couldn't you work less hours? Was it just a matter of hourly rate being too low for you to be satisfied with the income on fewer hours or is there something else?

andersonmvd 7y ago
Saying "no" is a challenge for human begins in all levels.

reikonomusha 7y ago

What’s wrong with fixed-fee if a fully specified statement of work is made with clear, objective test criteria?

detaro 7y ago
That it's often extremely difficult and lots of overhead to have such a thing, and clients typically are larger than you and have less to loose by arguing about it endlessly.
- HeyLaughingBoy 7y ago
  That really depends on the project. One of the reasons I only take very small projects is that the scope is typically limited and clearly understood so it's easier to offer a fixed bid with little risk.
kradroy 7y ago
As someone who's done over a dozen fixed-fee jobs - DON'T DO IT. There are too many unknowns, even in "simple" jobs. It won't be worth your time and you'll regret it. In order to make fixed-fee contracts worth it I had to cut corners. I hated doing that, but I preferred it to dropping the contract altogether (sunk costs fallacy). I've also found the clients who insist on fixed-fee contracts to be very demanding and petty. They tended to interpret the specs liberally. It's not worth the hassle. Trust me.
- avinium 7y ago
  As someone who's been on both sides of the table - client and contractor - I completely agree. I never do or ask for fixed-fee. When I'm the client, I feel fixed-fee gives the contractor an easy backstop/fallback position - they figure they can half-ass the job and use the additional time to scout for more work. When I'm the contractor, it's the same, but in reverse - fixed-fee makes clients feel like they can demand the moon beyond spec at no additional cost. Hourly/daily rates make sure that BOTH parties have something at risk, which tends to be keep everybody in line. The contractor's at risk of the client firing them. The client's money is at risk if they keep demanding endless revisions. Actually a good lesson for business in general.
pault 7y ago
What's wrong with it is that every spec will always be open to interpretation. You will interpret it as the minimum amount of functionality; the client will interpret it as the maximum. The only spec that isn't open to interpretation is the code itself. :)

kradroy 7y ago

These are all excellent and were all things that I practiced/discovered in my consulting days. The only thing I would add is: Never reduce your hourly rate for any client. For repeat clients they will expect that rate again. Many of your clients may know each other. They talk to each other and soon many of them will be asking why you can't give them a discount. You can offer discounts in exchange for an action (like quick payment mentioned above). Never devalue your time.

jaden 7y ago
+1 - I gave a reduced rate to a client who was tight on funds as a favor. They began referring friends (thinking they were returning the favor) but the new clients had the expectation of low cost. Clients attracted by low rates are rarely the kind you want to attract.
enobrev 7y ago
I generally agree, although whenever a rate is reduced for any reason, it should be stated out loud and in writing and on every invoice with a clear end date or specification for the reduction. Never let the special deal be forgotten as anything other than a special deal and after the deal is up, raise your rates back to normal without hesitation or apology.
- toomuchtodo 7y ago
  Never reduce your rate. Always make it clear on the invoice what your rate is, and apply a clearly explained discount to the invoice. Discounts are temporary, rates are sticky.
- neltnerb 7y ago
  Just offer to help them scope something you can do within their budget, and maybe it involves training them to do it themselves. Or just a better (simpler) design anyway with better milestones and focus on deliverable prototypes.
speedplane 7y ago
> The only thing I would add is: Never reduce your hourly rate for any client. ... Never devalue your time. I generally agree with this, but there are some exceptions: 1. For large, repeat clients that have demonstrated loyalty, it's okay to offer a modest discount, no more than 10%. You still cite your rack rate on the invoice, but at the end add a "Loyalty Discount" so they know they are getting this discount for a reason. 2. While you should not reduce your rate, it can be okay to write off your time. If it takes you 20 hours to do something, but you're afraid the client will balk at the bill and run away, rather than lowering your rate, invoice them for 10 hours, or whatever seems reasonable. 3. When you're just starting out, and have limited understanding of the value of your skills compared to the competition, you may not know what your rate should be. In these cases, you may want to consider flat rate arrangements.

tptacek 7y ago

Hiring people to sell is dangerous. Effective salespeople are money-printing machines. If they didn't know that about themselves, they wouldn't be effective salespeople. So there is a serious adverse selection problem here: the most effective salespeople have their pick of who to work for. The hiring pool for salespeople is full of --- dominated by, probably --- salespeople who are much better at selling you on why you should keep paying them despite them closing no deals than on selling your customers anything. You should learn how to "sell". That means a bunch of different things depending on how you decide to sell and is a basic business decision you should make early on. Make the decision such that your team can do the sales work. Hire sales when you have your process proven and nailed down. 37signals really got hiring right: you should (generally) hire a role after you've figured out how to do it yourself and doing it over and over again is becoming a material drag on the company. If you feel like you need a deposit to start a project, don't do the project. In 14 years of consulting, including software development projects, I've never taken a prepayment. I can't remember a real problem I've had. I can, however, think of a lot of clients I've said "no" to because they didn't seem to have their shit together.

thatoneuser 7y ago
No offense but on the pre payment thing you sound like someone who was fortunate enough to have a vast network of clients you already knew and trust. Which is not the case for most.
- tptacek 7y ago
  Things were pretty lean when we started, but sure, that might be true.
- neltnerb 7y ago
  I've never asked for a pre-payment, but I've figured out a small project to do for them and made clear that at each milestone they're welcome to walk and I'll support their new person with whatever documentation they need though I won't offer "support" in the sense of hours of my life training people unless I'm getting paid, which is usually not a big deal. They don't seem to have a worry about paying you to train the new person, but do seem to worry that your emotions about being let go will impact the timeline. Their real worry is that you'll suck and delay things, by making clear that you understand that such things happen and will help as you can if it does you improve trust. And you should really be doing that anyway ethically. And realize that sometimes you're just not the right person for the job and to help them find the right person if you want to build a strong network.

poundtown 7y ago

yes the backend of busines has got to be taken seriously. getting invoices out, paying bills, billing people etc these are the things that will kill your time. i am fortunate in that my spouse is a wiz at this so i can focus solely on doing the job.