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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 ne

by dotBen 15y ago

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)

tptacek 15y ago
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 milestone 3 until you pay me at least milestone 1". I'm sure there are people on HN who are shocked-shocked! to hear that suggested. But you can safely assume that HN consistently undervalues what is probably one of the most valuable assets a consultant can have, which is "ease of working with". When you commit to 4 milestone phases, and you client says your payment is in process, you have to keep working. The client is depending on the job getting done. You may be tempted to reply "but I'm depending on being able to afford dinner tonight". Your client doesn't really believe that it's their problem that you're not well capitalized.
- superkinz 15y ago
  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.

by dotBen 15y ago

tptacek 15y ago

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 milestone 3 until you pay me at least milestone 1". I'm sure there are people on HN who are shocked-shocked! to hear that suggested. But you can safely assume that HN consistently undervalues what is probably one of the most valuable assets a consultant can have, which is "ease of working with". When you commit to 4 milestone phases, and you client says your payment is in process, you have to keep working. The client is depending on the job getting done. You may be tempted to reply "but I'm depending on being able to afford dinner tonight". Your client doesn't really believe that it's their problem that you're not well capitalized.

superkinz 15y ago
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.