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  1. #1
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    Got my first client, help and suggestions on how to complete transaction

    Hello all! I just got my very first client who is hiring me to create a web application for a car insurance company. The application is going to be written in PHP/jQuery/MySQL and have a lot going on in it such as user registrations, an admin panel, ajax form verification, and more. Since this is my very first client, I want to maintain a level of professionalism and not seem amateurish. I am definitely an expert in web application development, just not an expert at dealing with clients, since I've never done it before.

    Do you guys have any help or suggestions on how to deal with a client? I talked with the project manager 2 days ago to gather requirements and I told him I would call back tomorrow with my price and estimated time of completion. I am planning on charging $4,500 and I *think* it will take around a month to complete, but it could take longer. How do you guys accept payments for this type of thing? I was thinking of asking for 50% of the payment up front and the other 50% at time of software delivery. Is this a standard protocol for payments? Also, I am just a person, I am NOT a legal company, so should I just ask for them to wire me the money? How do you guys typically handle this type of thing?

    Thank you!

  • #2
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    Having been stuffed by a client recently and who will now have to pay me costs as well, for time involved in securing payment + court costs, I now operate like this.

    Initial amount payable at the beginning. This is an amount that will cover my costs completely up to the point of delivery. So if the client reneges, I am not out money. (Breach of contract is a whole other ball-game for the loss of profit that would have been earned if they had not broken the contract plus costs (time) for the proceedings).

    The purpose of enforcing payment means reneging is more costly for the client and is likely to discourage them but, it also puts on record who was in the wrong.

    Where I live, such clients tend to spread the word that the tech was to blame for not being good enough when in most cases it is either a breakdown in communication or an absolute numpty of a client - as in my recent case).

    On completion (imv when the project is finished and functional, ready to go live, and demonstrable to the client as a working entity), the balance becomes due. The balance includes my costs for any work involved in making the website live and operational and for any other ancilliary work involved. The costs payable at this stage include a retainer as well as any amount agreed from the outset or now, for support/daily back-ups etc.

    I also recommend that the client is made aware from the beginning that any changes to be made from what was agreed at the first brief, will attract extra cost.

    example:

    on building an ecommerce site from scratch I asked the client if they wanted a,b and c features. they stated that they wanted the site live first and would add those features later. I explained the extra costs of doing it later and explained why it was extra. (more time-consuming). they decided to have the added features done later. Now having just completed the thing, they want the other features. Having pre-warned them of extra costs, they know they have to pay them.

    summary:
    don't squash your costs down so as to put yourself under (time)pressure to complete. Better to make sure it works.

    consider keeping your cards close to your chest. don't volunteer any discount early on. keep it until you can use it as a deal-maker or even (currently for you), as a form of added benefit to the client, in exchange for your building up a portfolio of work.

    write every detail of the brief down and give a copy to them in writing as part of your 'order form'/contract. That way, in the event of a dispute, it's there in black and white for all to see and judge, if necessary.

    make a note of your time during the process of building. this will keep you focussed on time management and also, provide a record for subsequent billing, say, if the client keeps ringing you up asking for you to 'build in this too that I saw at www.whatever.com'.

    It takes time to see what they are talking about and to plan your costings for them. so you need either to charge for that or build it into your other fees.

    As for length of time - I always overrun. build in a cushion of time. if someone else wants to do it quicker I just tell my (potential), client that I take the time to do it properly. If they want to pay someone to do it quickly, they may spend more money and time later, either getting it to work or to pay me to do it anyway.

    you are just a person NOT a limited company. BUT you are a legally trading entity so that point is a bit moot, certainly, here in the UK. if you put yourself up as a whatever, you have to deliver just as if a limited company.
    its called a sole trader in the uk.

    payments: I agree the method of payment before giving a quote. If they are to pay on provision of the product I charge one amount. If they are to pay me wihtin 30 days, I charge another. BUT i also include the terms and conditions which explain what will happen in the event of payment not being paid on time. That can be daily interest or a fixed fee but if its fixed and they fall into the category of having to pay it, there is no incentive at that stage, to rush you the payment. so incremental additional costs work there.

    And don't forget. you don't usually charge for your time in preparing the quote but, because it represents a cost to you, it should normally be included in your finished quote.

    hth

    bazz
    "The day you stop learning is the day you become obsolete"! - my late Dad.

    Why do some people say "I don't know for sure"? If they don't know for sure then, they don't know!
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  • Users who have thanked bazz for this post:

    skcin7 (06-16-2011)

  • #3
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    Thanks very much for your detailed reply. I already have written a project proposal document and sent it over to them. This document outlines exactly all of the features that the application will have, and is what prompted them to be interested in me and call me back. So, I already have a rough outline of exactly what the program will do and how it will function.

    Okay, so I am going to take most of your advice. I already know the price I am going to charge, $4500, and the amount of time it is going to take, 1.5 months. I am going to arrange payment method beforehand. I'm definitely going to accept bank wire and am also going to accept Paypal. Do you think there is any other methods I should accept? Money order? Check? I'm going to ask for $1000 up front. This will cover costs and some living expenses for the month in a half period where I am working on it. Then the other $3,500 will be due at time of delivery. You really think this is better than asking for 50% up front and 50% at time of delivery?

    I didn't think about charging a different price if they are to pay all at once versus if they are to pay within 30 days. At this point, I think I am just going to charge one single price regardless. However, I am definitely going to take your advice and come up with some type of penalty if they are not able to pay on time. Hopefully they will be able to pay the full price up front, so this will not be a problem. Maybe I will offer a small discount if they can pay the full price up front, for example like $4250 or something. It certainly would be nice to get the full price paid up front. Hmmm.

    In the project proposal document, I have outlined the scope of what I am going to complete, which is the first 4 phases of the software life cycle: Requirements, Design, Implementation, and Bug Testing. The final phase, Maintenance, is not included in the scope and will cost extra should they need any maintenance on the application. I will probably charge around $50 an hour for maintenance. It clearly says in the proposal document that future Maintenance is not included in the scope.

    Also, should I create a document to be signed by both parties outlining the terms, like a contract?

    Trying to be as professional as possible. Once again thank you for your reply.
    Last edited by skcin7; 06-16-2011 at 09:45 AM.

  • #4
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    I talked to the project manager at 10am on Tuesday and told him then I'd call back within 48 hours. I made a list full of questions to ask him and I finally got around to calling him back Thursday at around noon, which is 50 hours. He didn't answer. I left a message saying to call me back or I'd call back later in the day. Figured he might be on lunch. Don't want to annoy him too much. I hope he's not starting to wonder why I didn't call back within 48 hours. I imagine I am over analyzing it. I hate the waiting/wondering game. I guess I should have made him wait as little as possible (like within 24 hours) but I had other things to do, since I don't like waiting myself either. I didn't look at it this way until now.


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