Jonathan.....
About 25 years ago when I began my consulting career, my accountant gave me some great advice from which I have never deviated.
Always be working on the other guy's dime. You're not his bank. If he can't afford to pay you up front, then unless you're willing to take a risk or a royalty stream or something, just pass on the project.
In practice, this translates for me to:
1. Typically get 1/3 to 1/2 of the project fee (or estimate) on signing the deal.
2. Tie milestone payments to deliveries where possible.
3. Stop work if and when payments are late or stop.
4. Get it in writing.
5. Make sure the spec is clear and that any changes have to be in writing and approved by both parties. It's even better if changes also incur a charge and/or include the right to adjust the agreed-upon fee.
6. Leave a percentage -- 10-20 usually works -- to be paid N days after final delivery or on acceptance of the project, whichever occurs first.
IN rare cases where you love the project and think it will make your client rich (or at least comfortable) and he's not in a position to pay up front, then get a royalty stream or equity participation and then expect that about 75% of the time you'll be wrong and won't get paid anything. You can take on some of these projects if you're flush and business is good.
FWIW.
Dan
On Feb 18, 2005, at 6:58 AM, Lynch, Jonathan wrote:
If you create an application for someone, and periodically e-mail an updated version of the incomplete app to them, to make sure you are creating exactly what they want, then how do you prevent them from just keeping the last incomplete version, using that, and not giving final payment?
Yes, you could always sue them, but that is such a mess.
Also, how do you ensure that they do not change their mind and decide they don't want it at the last minute, after you have put great work into it?
Or - are these things not really problems because they happen too rarely
to be a concern?
Cheers,
Jonathan
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