Comment by blitzen | Hacker News Reader

Comment by blitzen | Hacker News Reader

Parent Full thread

> Maybe you could go into a little more detail about how your previous clients managed to weasel out of paying.

Expanding scope and holding final payment hostage.

> Maybe you could tell us a little bit more about how you scoped those projects and how you handled contracts and payment terms.

List of requirements, with 50% before and 50% when done. This was my #1 mistake and I have stopped this.

> It would definitely help if you told us how you sourced those clients. Did you network your way into them, or get them off outsourcing sites?

Networking.

> How big were the clients?

Larger side of small business scale.

> You're not one good client away from all your problems changing; you're several business model changes away from having a sustainable business that will generate fewer abusive relationships, and, over the long term, the luxury of being picky about your clients.

One month at $100+ an hour would take care of all debts, allow me to purchase needed medicine and provide enough runway to only accept quality clients. That is what I meant by that.

First suggestion: any client that plays games with payment is a client you can't afford to keep. It's a bit of a judgement call; maybe they saw their scope extension as reasonable and in the spirit of the original engagement.

Second suggestion: split your contracts up; your first contract is your "Master", and your second a "Statement of Work" (SOW). Both require execution by both sides before you proceed. Don't work without an explicit SOW again. The SOW should list in bullets the whole scope of the project and the acceptance criteria, and list the payment schedule.

You need to be able to tell you client "OK, but to do that we'll need to put in place a new SOW" when they try to extend scope.

We don't ask for up-front payment at all, and I'm not wild about it (if you really need it, you have crappy clients, and should fix that instead of coming up with ways to mitigate crappy clients). But since you do:

Next suggestion: by the time a client has paid you 50% for a project, you now hold all the cards. They can't afford to have you walk away with an incomplete deliverable and write off the cost of the engagement. So next time this happens, just say "no" to scope extensions (politely!) and see what happens.

You might be surprised at how much more effective you are at negotiating if you go into these things knowing you have the leverage and not them.

What is typically contained in the master contract? Things such as payment terms?

I do a fair bit of this sort of contract work. I normally either charge $100/hr or give a fixed price. For project work I normally charge a fixed price, but I make sure I get a reasonably detailed spec before doing this (and I insist on not doing any more work without further pay, unless it's very minor stuff).

Note that I've got 20+ years experience, and ALL of my contract work comes through my website (collaborative whiteboard/conferencing software) - normally it is customizing the software to the customer's requirements.

It's very difficult just finding this sort of contract work unless you have some way to funnel in new customers. In your case I'd recommend maybe just taking on a full-time on-site contract job.

Thank you. It's the best bet. I am going to pursue that today.

Reply on news.ycombinator.com