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On my first gig as a freelancer, I had the misfortune to have such a non-paying (almost) nonexistent company as a client. Worked almost two months without getti

by Iv 7y ago

On my first gig as a freelancer, I had the misfortune to have such a non-paying (almost) nonexistent company as a client. Worked almost two months without getting paid. I almost abandoned freelancing after that. Since then, I have a rule, that only failed me once: before working a month for a person, work a week or less, get paid. There are smart scammers who are really devious but those I have met had all kind of pathological problems they were in denial with. I think that most scammers live in a fantasy world. By forcing them to prove they have money, are ready to pay you and know how to make a bank transfer, you are pruning a lot of them. Also, and especially in my case where I have several international clients, the "I dont understand the bank transfer got refused" excuse is very common (and sadly, very believable). Having worked through all the troubles of making a payment from their accounts to yours already sets expectations about normal delays.

unicornfinder 7y ago
Something a lot of people will suggest is asking for 50% upfront. In my experience genuine clients won't have a problem with this.
- d4mi3n 7y ago
  +1 to this. If 50% is untenable due to large project size or unknown scope, what also works really well is agreeing to big milestones for a project and attaching payment plans/due dates to those milestones. e.g. $5k due upon signing of contract, $10k due upon delivery of feature A, $7k upon delivery of feature B, etc.
  - jvagner 7y ago
    Agreed. Always have an initiation fee, applicable to hours to be spent. By the time this ask has been made, the proposal conversation should've established your credibility.
    - howard941 7y ago
      When extended beyond initiation it acts in good ways like attorney fees retainer. Perhaps borrow more elements from that other industry? The engineering retainer times out monthly and gets refreshed before the next month, or when it's exhausted, whichever comes first. Done properly you're not one of your client's creditors: The client should always be in a financial position w/r/t you where you're pre-paid, your compensation secured by the positive retainer balance and if you really get serious, by retaining a perfeted security interest in the work product.
      - jvagner 7y ago
        We do this for our maintenance retainers... after our sites go live, we continue to provide technical and marketing services on a monthly basis. Pre-paid retainers secure a lower billing rate. So far, it hasn't been a good idea to start out that way, even from our perspective. The problem with "projects" is that there are usually requirements on both sides, and payment + delivery keep things urgent for both sides. I hate projects that go on forever because the client can't produce things they need to or respond in a definitive manner. Holding the deliverable back is a pretty impactful negative consequence (or: motivation). We are exploring an "agency of record" start-up engagement where the retainer plus phases may be the way to go. But it's less of a project with deliverables than agency-of-record time and effort.
  - swiley 7y ago
    I’ve always felt like it’s a bit strange not to cut large projects up into milestones. The only time I ever worked on a multi month project where I didn’t do that I didn’t end up getting paid.
sharedfrog 7y ago
Can you give a few examples of the problems/denials?
- Iv 7y ago
  "I have a very strong reputation in the market!" (Yeah, a reputation as a guy who writes fake reviews of his company) "Everybody wants me to fail." (No, we are all putting overtime because of your bad decisions, but it turns out they were REALLY bad) "The client was really happy with our demo" (Except for the part where it crashed for half a day and they are threatening legal action) "I made the software work!" (No, you fixed one minor module because the guy you did not pay slammed the door)
  - cosmodisk 7y ago
    "I don't have time to transfer the money,I'm literally driving across the country to the meeting,can we do this tomorrow?" ( It takes 1 minute to pull out your phone, login to your bank app and do it). "Can we just changes this?And this?And then bombards you with 20 back and forth of last minute changes that have never came up in previous 10 meetings you had" (Either can't make up their minds or simply no idea what they want or just delaying payments).
CPLX 7y ago
Don't ever work, at all, without getting paid at least something up front, ever. Unless you're working in a physical office, or on a platform that handles escrow or similar, of course. Just don't do it. You will lose literally zero good, profitable opportunities by following this rule.
- kingofpandora 7y ago
  At the same time employers are saying "Don't ever pay, at all, without getting at least some work first, ever." On the whole this is how the world operates. Work then pay.
- mdorazio 7y ago
  Wait, what? How is this supposed to work for something like consulting? Asking for a retainer up front is often a one-way ticket to a potential client saying "no thanks" and going with someone else. I definitely would have lost many highly profitable opportunities with that approach.
  - CPLX 7y ago
    Just get at least some money up front. If you can't walk away. It's a pretty simple concept, and it's the way to solve this problem. OK so maybe the only other exception to this rule is when you have a real life serious executed contract and a purchase order with a serious company with hundreds of employees at minimum. Actually just kidding even then don't do it unless you know what you're doing. Those guys decide not to pay or pay months or years later a lot of the time too and will put you right out of business. If someone complains about your policy tell them that you don't have a business manager, billing department, or collections operation, and by not having that you're passing all the savings on those functions on to the client, in exchange for a simple deposit or retainer. Trust me on this. I'm old and have seen a lot of shit. Until you have a ton of experience freelancing or consulting or running an agency and don't need to ask questions like this just start off by getting a deposit or retainer up front every single time you do any work at all.
  - cosmodisk 7y ago
    Freelancing!=consulting,or at least not always. In consulting you'd normally sign engagement contracts, probably even come up with a proposal on what you'll do. Also depends what companies you deal with,in what industry and etc. Freelancing,at least in generally accepted terms,is slightly different,even though there's lots of overlapping areas.

by Iv 7y ago

unicornfinder 7y ago

Something a lot of people will suggest is asking for 50% upfront. In my experience genuine clients won't have a problem with this.

d4mi3n 7y ago
+1 to this. If 50% is untenable due to large project size or unknown scope, what also works really well is agreeing to big milestones for a project and attaching payment plans/due dates to those milestones. e.g. $5k due upon signing of contract, $10k due upon delivery of feature A, $7k upon delivery of feature B, etc.
- jvagner 7y ago
  Agreed. Always have an initiation fee, applicable to hours to be spent. By the time this ask has been made, the proposal conversation should've established your credibility.
  - howard941 7y ago
    When extended beyond initiation it acts in good ways like attorney fees retainer. Perhaps borrow more elements from that other industry? The engineering retainer times out monthly and gets refreshed before the next month, or when it's exhausted, whichever comes first. Done properly you're not one of your client's creditors: The client should always be in a financial position w/r/t you where you're pre-paid, your compensation secured by the positive retainer balance and if you really get serious, by retaining a perfeted security interest in the work product.
    - jvagner 7y ago
      We do this for our maintenance retainers... after our sites go live, we continue to provide technical and marketing services on a monthly basis. Pre-paid retainers secure a lower billing rate. So far, it hasn't been a good idea to start out that way, even from our perspective. The problem with "projects" is that there are usually requirements on both sides, and payment + delivery keep things urgent for both sides. I hate projects that go on forever because the client can't produce things they need to or respond in a definitive manner. Holding the deliverable back is a pretty impactful negative consequence (or: motivation). We are exploring an "agency of record" start-up engagement where the retainer plus phases may be the way to go. But it's less of a project with deliverables than agency-of-record time and effort.
- swiley 7y ago
  I’ve always felt like it’s a bit strange not to cut large projects up into milestones. The only time I ever worked on a multi month project where I didn’t do that I didn’t end up getting paid.

sharedfrog 7y ago

Can you give a few examples of the problems/denials?

Iv 7y ago
"I have a very strong reputation in the market!" (Yeah, a reputation as a guy who writes fake reviews of his company) "Everybody wants me to fail." (No, we are all putting overtime because of your bad decisions, but it turns out they were REALLY bad) "The client was really happy with our demo" (Except for the part where it crashed for half a day and they are threatening legal action) "I made the software work!" (No, you fixed one minor module because the guy you did not pay slammed the door)
- cosmodisk 7y ago
  "I don't have time to transfer the money,I'm literally driving across the country to the meeting,can we do this tomorrow?" ( It takes 1 minute to pull out your phone, login to your bank app and do it). "Can we just changes this?And this?And then bombards you with 20 back and forth of last minute changes that have never came up in previous 10 meetings you had" (Either can't make up their minds or simply no idea what they want or just delaying payments).

CPLX 7y ago

Don't ever work, at all, without getting paid at least something up front, ever. Unless you're working in a physical office, or on a platform that handles escrow or similar, of course. Just don't do it. You will lose literally zero good, profitable opportunities by following this rule.

kingofpandora 7y ago
At the same time employers are saying "Don't ever pay, at all, without getting at least some work first, ever." On the whole this is how the world operates. Work then pay.
mdorazio 7y ago
Wait, what? How is this supposed to work for something like consulting? Asking for a retainer up front is often a one-way ticket to a potential client saying "no thanks" and going with someone else. I definitely would have lost many highly profitable opportunities with that approach.
- CPLX 7y ago
  Just get at least some money up front. If you can't walk away. It's a pretty simple concept, and it's the way to solve this problem. OK so maybe the only other exception to this rule is when you have a real life serious executed contract and a purchase order with a serious company with hundreds of employees at minimum. Actually just kidding even then don't do it unless you know what you're doing. Those guys decide not to pay or pay months or years later a lot of the time too and will put you right out of business. If someone complains about your policy tell them that you don't have a business manager, billing department, or collections operation, and by not having that you're passing all the savings on those functions on to the client, in exchange for a simple deposit or retainer. Trust me on this. I'm old and have seen a lot of shit. Until you have a ton of experience freelancing or consulting or running an agency and don't need to ask questions like this just start off by getting a deposit or retainer up front every single time you do any work at all.
- cosmodisk 7y ago
  Freelancing!=consulting,or at least not always. In consulting you'd normally sign engagement contracts, probably even come up with a proposal on what you'll do. Also depends what companies you deal with,in what industry and etc. Freelancing,at least in generally accepted terms,is slightly different,even though there's lots of overlapping areas.