4 ms·

Thanks for a great answer! After reading this, I will continue to charge per project (because that's what I really want) and just be smart about it.

France_is_bacon 5y ago
Glad to help. And one other thing I'd like to say. Someone else mentioned that your client will make changes and expect you to accommodate the changes. What you want to make sure is that you are very crisp and clean about it when you are in the negotiation stages. Be clear and up front and tell them in advance. Repeat yourself on that point. Repeat yourself on that point. Because that is a real sticking point for many companies. Almost, but not quite, to the point of belaboring the point. Explain to them why it is so. If you do a google search, you'll find a lot of articles about how changes effect programming time. Well, here: https://www.google.com/search?q=changes+to+programming+specifications https://www.google.com/search?q=changes+to+programming+speci... Create a summary of these points of why you have to charge extra for changes on a fixed bid, and show them. Tell them that it is the same exact thing that happens in construction, use that exact example. A construction company is not going to move a wall for free, it can take a lot of extra work. Tell them that a seemingly minor change might take a lot of work. Maybe document some specific examples of something that looks easy, and show what you did, and how much time it took - that to add 3 other it took you 40 hours of time. Show the code and everything, maybe even make a video making a "simple" change so that they can see exactly what work that goes into it. This is all a marketing expense, ok? Marketing. To show the client the reality of changes. So you won't get shit from them later, when you charge them extra. Also, depending on what it is that you are doing, I would bill separately on change order changes, right then and there, that week. Do not incorporate it into the total cost. For sure don't do that. Make sure they understand and you tell them abut it. For you, cash is king, cash flow is king. Do not back down on this point. Changes and extras are billed immediately, that week. And you should always bill them weekly on everything, even if it is a fixed price, if it is a 2 month project for example. Bill weekly. If the fixed price is $10,000 and it is a 2 month deal, then they pay $2,000 up front, and $1,000 every week thereafter, or whatever you decide the upfront and payments are going to be. Obviously if it is a one week project, that does not hold true. Additionally, another thing I didn't mention, is if you can get the whole thing up front, even better. Let them pay $9,500 if they pay upfront. Get the cash fast as you can. If their terms are that they pay monthly, then tell them that your terms are weekly, and be hard core negotiation on that. But if push comes to shove, you do monthly. Just try to negotiate hard on weekly payments. Or, you can say something like, if you want $10,000 for the project, you offer to do it for $11,000, then tell them that if they pay weekly, you will charge them $10,000. But those are just negotiating techniques. Maybe if you are working for a Fortune 500, they will never change their billing for your $10,000 bill, so you just have to accept it. Everything depends. But if it is a small 8 person company, you can negotiate that, because you will be talking to the owners directly, more than likely. What I wrote above is mainly for change orders but it applies to everything. Read the American Bar Association link that I gave you again, it is very informative on minor changes, and cardinal changes.
- cambaceres 5y ago
  I have not had the time yet, will do it ASAP. I watched the full video you recommended though, that was exactly what I needed to see now! Our current situation looks like this: Since we are in the beginning of this business we work with it on our spare time, while keeping the day jobs until we get more gigs. We have gotten our first gig, which is to build an application used in the shipping industry. We wrote a contract for the first delivery worth approx $25,000, and we have gotten a full payment. We have gotten promises on 2 more deliveries that will average approx $30,000. The issue is that now they are trying to put a lot of shit into the first delivery, although it's not in the contract. We (the two of us in the company) have let ourselves be a bit pushed around in the past weeks and have put at least 20 hours each into building stuff that was definitely not in the contract, with the fear that if we say no then they wont let us continue working on the app and we can forget the coming $60,000. Anyway, your comment and the video made me realise that the way we are trying to please them right now is just stupid. We have the next meeting with them on Monday, and I know exactly what to say: Fuck you and pay us :D
  - France_is_bacon 5y ago
    I know you just started and that is very cool. In the future, as I said in prior post, be crystal clear on the point up front in the next client. Make sure to mention it and emphasize it. So say, "Just like in construction you wouldn't expect a contractor to move a wall for free after he built it, because you want it changed...it's the same thing, if the specifications change during the course of the work, then we need to come up with a new price." If they say no, better to know up front and turn the work down, because then they are going to be asshole customers who don't want to pay you. For this particular situation that you are in, I'd probably say that it is kind of on you guys that it was not clear. Which is ok, you didn't know. You didn't emphasize that you don't work for free up front before you started the project, and then you went ahead and did extra 20 hours of work without saying something. I'd try to get it paid, but if they say no, then take your lumps, and on the next job say that "OK, but on the next one we will bill for extra." I'd try to get the 20 hours paid, though, but if they get too pissy I'd probably cut it to 10 hours, or even $0, if I had to, because it's your sort of mistake, on the unclear communication. And remember, the whole Fuck you pay me is last resort, you always want to be friendly until you can't be. It does not really sound like a literal fuck you pay me situation. Just work it out. I don't know how much you would charge per hour, but if it is $150, that is $3,000. Don't lose $60K for $3,000. But still try to get paid for it, but don't be too hard nosed. You kind of have to play it by ear, but keep it light and friendly, with a small dose of humor, too, if possible. A lot of it is in the presentation and the operations of it. I could tell a lot of stories of stuff. Anyways, I think you get the gist of what I'm saying. Hope it all works out for you.

France_is_bacon 5y ago

Glad to help. And one other thing I'd like to say. Someone else mentioned that your client will make changes and expect you to accommodate the changes. What you want to make sure is that you are very crisp and clean about it when you are in the negotiation stages. Be clear and up front and tell them in advance. Repeat yourself on that point. Repeat yourself on that point. Because that is a real sticking point for many companies. Almost, but not quite, to the point of belaboring the point. Explain to them why it is so. If you do a google search, you'll find a lot of articles about how changes effect programming time. Well, here: https://www.google.com/search?q=changes+to+programming+specifications https://www.google.com/search?q=changes+to+programming+speci... Create a summary of these points of why you have to charge extra for changes on a fixed bid, and show them. Tell them that it is the same exact thing that happens in construction, use that exact example. A construction company is not going to move a wall for free, it can take a lot of extra work. Tell them that a seemingly minor change might take a lot of work. Maybe document some specific examples of something that looks easy, and show what you did, and how much time it took - that to add 3 other it took you 40 hours of time. Show the code and everything, maybe even make a video making a "simple" change so that they can see exactly what work that goes into it. This is all a marketing expense, ok? Marketing. To show the client the reality of changes. So you won't get shit from them later, when you charge them extra. Also, depending on what it is that you are doing, I would bill separately on change order changes, right then and there, that week. Do not incorporate it into the total cost. For sure don't do that. Make sure they understand and you tell them abut it. For you, cash is king, cash flow is king. Do not back down on this point. Changes and extras are billed immediately, that week. And you should always bill them weekly on everything, even if it is a fixed price, if it is a 2 month project for example. Bill weekly. If the fixed price is $10,000 and it is a 2 month deal, then they pay $2,000 up front, and $1,000 every week thereafter, or whatever you decide the upfront and payments are going to be. Obviously if it is a one week project, that does not hold true. Additionally, another thing I didn't mention, is if you can get the whole thing up front, even better. Let them pay $9,500 if they pay upfront. Get the cash fast as you can. If their terms are that they pay monthly, then tell them that your terms are weekly, and be hard core negotiation on that. But if push comes to shove, you do monthly. Just try to negotiate hard on weekly payments. Or, you can say something like, if you want $10,000 for the project, you offer to do it for $11,000, then tell them that if they pay weekly, you will charge them $10,000. But those are just negotiating techniques. Maybe if you are working for a Fortune 500, they will never change their billing for your $10,000 bill, so you just have to accept it. Everything depends. But if it is a small 8 person company, you can negotiate that, because you will be talking to the owners directly, more than likely. What I wrote above is mainly for change orders but it applies to everything. Read the American Bar Association link that I gave you again, it is very informative on minor changes, and cardinal changes.

cambaceres 5y ago
I have not had the time yet, will do it ASAP. I watched the full video you recommended though, that was exactly what I needed to see now! Our current situation looks like this: Since we are in the beginning of this business we work with it on our spare time, while keeping the day jobs until we get more gigs. We have gotten our first gig, which is to build an application used in the shipping industry. We wrote a contract for the first delivery worth approx $25,000, and we have gotten a full payment. We have gotten promises on 2 more deliveries that will average approx $30,000. The issue is that now they are trying to put a lot of shit into the first delivery, although it's not in the contract. We (the two of us in the company) have let ourselves be a bit pushed around in the past weeks and have put at least 20 hours each into building stuff that was definitely not in the contract, with the fear that if we say no then they wont let us continue working on the app and we can forget the coming $60,000. Anyway, your comment and the video made me realise that the way we are trying to please them right now is just stupid. We have the next meeting with them on Monday, and I know exactly what to say: Fuck you and pay us :D
- France_is_bacon 5y ago
  I know you just started and that is very cool. In the future, as I said in prior post, be crystal clear on the point up front in the next client. Make sure to mention it and emphasize it. So say, "Just like in construction you wouldn't expect a contractor to move a wall for free after he built it, because you want it changed...it's the same thing, if the specifications change during the course of the work, then we need to come up with a new price." If they say no, better to know up front and turn the work down, because then they are going to be asshole customers who don't want to pay you. For this particular situation that you are in, I'd probably say that it is kind of on you guys that it was not clear. Which is ok, you didn't know. You didn't emphasize that you don't work for free up front before you started the project, and then you went ahead and did extra 20 hours of work without saying something. I'd try to get it paid, but if they say no, then take your lumps, and on the next job say that "OK, but on the next one we will bill for extra." I'd try to get the 20 hours paid, though, but if they get too pissy I'd probably cut it to 10 hours, or even $0, if I had to, because it's your sort of mistake, on the unclear communication. And remember, the whole Fuck you pay me is last resort, you always want to be friendly until you can't be. It does not really sound like a literal fuck you pay me situation. Just work it out. I don't know how much you would charge per hour, but if it is $150, that is $3,000. Don't lose $60K for $3,000. But still try to get paid for it, but don't be too hard nosed. You kind of have to play it by ear, but keep it light and friendly, with a small dose of humor, too, if possible. A lot of it is in the presentation and the operations of it. I could tell a lot of stories of stuff. Anyways, I think you get the gist of what I'm saying. Hope it all works out for you.