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> You will also want to note that not getting paid on time is actually quite common in freelancing. Really, really common. I've started offering 10% discounts

by nthj 12y ago

> You will also want to note that not getting paid on time is actually quite common in freelancing. Really, really common. I've started offering 10% discounts for payment upfront—even some of the larger, "corporate" clients can get pre-payments through their strictly-net-45-billing department. And I'd rather have, say, $3,600 today than the possibility of $4,000 two or three months from now. (I also generally only extend these up-front payment discounts to ACH or wired payments, not checks. Avoids other common scenarios: "yep, your check is in the mail" or "Hello, this is your bank, we've placed a hold on your deposit for 5-10 days because we felt like it, sucks to be you”) Given the current situation, I'd recommend a full-time job to save your sanity (I speak from personal experience as a freelancer/consultant for ~10 years). But if you're looking for immediate or additional income, your lowest risk bets are maintenance retainers. These clients generally have money (because their product has customers), and urgency (because their product has customers), and want stability (because their product has customers). $2K-$3K paid up front each month, and you just have to log your 20-40 hours, write up a report, and you're home free. No scope creep, no delayed payments, and you know the song will repeat again on the first of the month.

edanm 12y ago
I'd actually recommend against giving a 10% discount for payment up-front. 10% is a lot of money. Giving it up because of cashflow issues is not a winning move most of time. And while non-collection happens to everyone, if you're regularly working for clients that you fear won't pay you, you're not in the best situation anyway. What I would recommend instead is: 1) charge more money. This will get you better clients. 2) save up some of that money, so that you're no longer in a situation where not getting paid this week is a big deal. 3) stop extending a huge discount for cash up-front. Another reason not to insist on cash-upfront is that some customers are not going to be able to bend to this. Corporate clients might be able to pay with different terms, some of the time, but you shouldn't rely on this. Instead, get enough savings to give yourself flexibility.
- nthj 12y ago
  Generally, I agree with you, and yes, you described exactly how you want to run a business long-term, but when your wife is in and out of the hospital and you were just served an eviction notice, $3,600 now is way better than $4,000 in 2 months. And saving up 6 months salary doesn't happen overnight. Reality is reality. On the other side of the coin, it's just numbers. If you can justify, say, a $4K/week rate, charge $4.5K standard or $4K for upfront. If the customer is in a position to bend payment terms to save $500/week, they can, and you're now in line with market rate but more favorable payment terms. If they're not in a position to do so, $500/week probably doesn't matter one way or the other to them, anyway. Either way, you win. Most customers will ask for a discount, as a rule. Hinge that discount on something you want (faster payment) instead of just giving it to them. Then they can make the decision. Either way, they feel good about it. Either way, everybody wins.
  - edanm 12y ago
    Yes, life situation matters, obviously. I recommend people don't think of themselves as freelancers, but rather managers of a company that happens to currently have one developer. But I digress. That last piece of advice you gave is golden: "Most customers will ask for a discount, as a rule. Hinge that discount on something you want (faster payment) instead of just giving it to them." Agreed 100%. And it doesn't just have to be faster payment, either. There's plenty of things you can do to change the rate. Also, if you haven't read this, here's tptacek's briliant advice on why your "rate" isn't everything: https://news.ycombinator.com/item?id=848685 https://news.ycombinator.com/item?id=848685

by nthj 12y ago

edanm 12y ago

I'd actually recommend against giving a 10% discount for payment up-front. 10% is a lot of money. Giving it up because of cashflow issues is not a winning move most of time. And while non-collection happens to everyone, if you're regularly working for clients that you fear won't pay you, you're not in the best situation anyway. What I would recommend instead is: 1) charge more money. This will get you better clients. 2) save up some of that money, so that you're no longer in a situation where not getting paid this week is a big deal. 3) stop extending a huge discount for cash up-front. Another reason not to insist on cash-upfront is that some customers are not going to be able to bend to this. Corporate clients might be able to pay with different terms, some of the time, but you shouldn't rely on this. Instead, get enough savings to give yourself flexibility.

nthj 12y ago
Generally, I agree with you, and yes, you described exactly how you want to run a business long-term, but when your wife is in and out of the hospital and you were just served an eviction notice, $3,600 now is way better than $4,000 in 2 months. And saving up 6 months salary doesn't happen overnight. Reality is reality. On the other side of the coin, it's just numbers. If you can justify, say, a $4K/week rate, charge $4.5K standard or $4K for upfront. If the customer is in a position to bend payment terms to save $500/week, they can, and you're now in line with market rate but more favorable payment terms. If they're not in a position to do so, $500/week probably doesn't matter one way or the other to them, anyway. Either way, you win. Most customers will ask for a discount, as a rule. Hinge that discount on something you want (faster payment) instead of just giving it to them. Then they can make the decision. Either way, they feel good about it. Either way, everybody wins.
- edanm 12y ago
  Yes, life situation matters, obviously. I recommend people don't think of themselves as freelancers, but rather managers of a company that happens to currently have one developer. But I digress. That last piece of advice you gave is golden: "Most customers will ask for a discount, as a rule. Hinge that discount on something you want (faster payment) instead of just giving it to them." Agreed 100%. And it doesn't just have to be faster payment, either. There's plenty of things you can do to change the rate. Also, if you haven't read this, here's tptacek's briliant advice on why your "rate" isn't everything: https://news.ycombinator.com/item?id=848685 https://news.ycombinator.com/item?id=848685