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Off Topic: what kind of contract do you sign with your customer?

A

aaronchow

macrumors regular
Original poster
Sep 29, 2007
164
9
I'm not sure if I'm allowed to ask this question here. If not, please delete this question for me. :)

Anyway, I have been mostly developing Basic websites with Drupal for various small projects, and I normally would charge minimum (< $2K) since I normally would spend less than 20 hours to do it. However, last year I kind of screwed myself when I was building a website for a non-profit. They gave me a fixed price of around 160 hours of work (custom app using Rudy), but I ended up spending 230+ hours to work on it, and I couldn't ask for more because the contract basically said no.

Recently I just found another project that I am also building a website for a nonprofit, except this time I'll be mainly using Drupal / CiviCRM. Do you have any suggestion that I may do to avoid the under-paying situation? Or do you always under-pay and over-work?
 
Did you work so many hours on the previous project because you made a mistake in estimating the scale of the project, or because of client/project changes? i.e. was the overage your fault or theirs? There is a huge difference between 20 hours of work and 230 hours of work.

In your contract you can specify a certain range of work for a certain price, and then define an hourly rate for changes and overages. Make sure the hourly rate is high enough to be punitive if you have a client who loves to make change after change after change.

Also, you want to make sure that you are building in enough padding for when projects go longer than expected. 2k for 20 hours of work puts you right at $100/hr. I would suggest making your core hourly rate a bit higher to protect yourself a bit.

You should never under-pay and over-work. If you are then your contracts are not doing what you need them to.

If you have a lot of questions about contracts, billing and estimating, you may want to read the book "Design is a Job" by Mike Monteiro from A Book Apart. http://www.abookapart.com/products/design-is-a-job

You can get a taste of Mike in the lecture he gave titled "****** you, Pay Me" (http://vimeo.com/22053820)
 
Talking contracts, I came across Docracy the other day it might be of use.

The best advice I can give, is track your time and write the time actually spent will be paid off at the end of the contract. Though again freelancing can be difficult getting the time/pay ration just right.
 
lucidmedia said:
Also, you want to make sure that you are building in enough padding for when projects go longer than expected. 2k for 20 hours of work puts you right at $100/hr. I would suggest making your core hourly rate a bit higher to protect yourself a bit.
Click to expand...

Sorry, but IME, an $800 day rate for Drupal work is already VERY, VERY high. Going higher than that borders on ridiculous.
 
lucidmedia said:
Did you work so many hours on the previous project because you made a mistake in estimating the scale of the project, or because of client/project changes? i.e. was the overage your fault or theirs? There is a huge difference between 20 hours of work and 230 hours of work.
Click to expand...
The fault lies to both my customer and myself. I'm still very fresh to working as a freelance (have a full-time job during the day, gathering tiny projects at night), and I don't have many experience working on larger scale projects, so I'd under-estimated my time during the negotiation period.

My friend wrote a contract for me two years ago, and I've been using that contract ever since. That contract primarily says that I'm not financially reliable if something horrible goes wrong, and I'm getting paid to "complete" the following list of things per the negotiated price. It was the "complete" wording that got me screwed. When I wrote down the "list of things" to complete, we used some very general terms (like generating customized reports), and my customer kept changing his requests so I had to go back and forth a lot. It was almost like a never ending project :(

lucidmedia said:
If you have a lot of questions about contracts, billing and estimating, you may want to read the book "Design is a Job" by Mike Monteiro from A Book Apart. http://www.abookapart.com/products/design-is-a-job

You can get a taste of Mike in the lecture he gave titled "****** you, Pay Me" (http://vimeo.com/22053820)
Click to expand...
Thanks. I definitely need to read more about the estimating part.

I'll have another meeting with my new customer next Monday again. I hope I can have a new contract ready...

----------
ezekielrage_99 said:
Talking contracts, I came across Docracy the other day it might be of use.

The best advice I can give, is track your time and write the time actually spent will be paid off at the end of the contract. Though again freelancing can be difficult getting the time/pay ration just right.
Click to expand...

Thanks. I'll definitely take a look at the site. Just curious, is anyone using these free legal documents to protect themselves?
 
You can write your contract so it says X number of written changes are allowed for the quoted price, and all changes beyond that number will be billed at Y dollars/hour.

It's important to say "written", but include emails, etc. as written. It may also be important to specify exactly who is allowed to give you the written changes, because I've sometimes had problems with underlings sending email requests for changes that haven't been agreed or authorized by the person in charge.

The hard part is then figuring out a reasonable number for X. That may be a negotiating point, or it may clarify the difference between developing a prototype or research-product and developing the real final thing. Sometimes a research-project with a fixed time and budget is a better starting point, rather than trying to guess what a reasonable number of changes will be.
 
I believe in the KISS principal.

I've been beaten to death with fixed rates for jobs, only to have the client request 100,000 changes. Then complain why isn't the site finished yet?

Here is how I do it to make everyone happy:
$250 / nonrefundable for me to take on your project ( gets you 4 hours work -> usually the startup stuff, listening to their ideas, color schemes, hand sketching front page, sub pages, creating a subdomain for them to view their site as it gets created ( that way they can provide immediate feedback, "You know, you were right, pink and green font was a bad idea ). This invests the client.
$70 / hour after the first 4 hours. I'll happily put a slightly lighter shadow on that image, I'll gladly resize it down 3 pixels, I'd love to change the entire front page again, I'd be happy to add sprites dancing around the borders... all at $70 / hour. The client gets billed on Friday. Work stops until paid.

Their site stays with me until they are happy and have given final payment. Then site is moved to their live server. This concludes our business. Any additional work will be asked for in writing with a return estimate ( but no promise to charges ).

I figure my plumber charges $80/hour for labor, mechanic charges $105/hour for labor, they are getting a deal at $70/hour.

I've had many people walk away when they hear the rate. Perfectly fine, I currently have more work than I can keep up with. It doesn't look like that will slow down anytime soon.

just working

PS i'm sure I forgot tons of things, just taking a little break and popping in a quick response.
PPS typical template site gets put up for about $600-$800 depending on image work needed
PPPS complete custom site easily hits $10,000+ but they get their dancing stars, inventory, billing, online store and 3D walk through :)
 
aaronchow said:
Thanks. I'll definitely take a look at the site. Just curious, is anyone using these free legal documents to protect themselves?
Click to expand...

There's a few up on the site that could be really useful for freelancers, thus the post... But I do think they could protect some freelancers legally for helping with producing a good contract that's semantically correct.
 
bpaluzzi said:
Sorry, but IME, an $800 day rate for Drupal work is already VERY, VERY high. Going higher than that borders on ridiculous.
Click to expand...

tell me about it! I was thinking wtf, thank god i'm not alone here. I would really like to know the functionality of these sites as I must be getting underpaid! :eek:

what's the price of a average site in london....lets say wordpress?
 
bpaluzzi said:
Sorry, but IME, an $800 day rate for Drupal work is already VERY, VERY high. Going higher than that borders on ridiculous.
Click to expand...

Rates certainly fluctuate from place to place, but when the advertising or interactive agency I freelance for is charging more than $300/hr for my labor, equipment, and experience why should I not be making a third of that?
 
lucidmedia said:
Rates certainly fluctuate from place to place, but when the advertising or interactive agency I freelance for is charging more than $300/hr for my labor, equipment, and experience why should I not be making a third of that?
Click to expand...

You're either quoting inaccurate figures, or your agency is GROSSLY overpriced. That's nowhere near the reality. A £2400 day rate for development is absolutely unheard of. Sorry.

http://www.scribd.com/doc/49470647/Agency-Rate-Card-Survey-2008
 
bpaluzzi said:
You're either quoting inaccurate figures, or your agency is GROSSLY overpriced. That's nowhere near the reality. A £2400 day rate for development is absolutely unheard of. Sorry.

http://www.scribd.com/doc/49470647/Agency-Rate-Card-Survey-2008
Click to expand...

I won't deny that the agencies I work for are overpriced (also note we are talking USD, not pounds so the numbers are about half as large... I can ask what our london offices charge)... but I am not going to complain about it. I have bills to pay and a family to support.

I am surprised that so many are shocked at the idea of a freelance designer or developer asking $100/hr. That is half of what a master plumber charges per hour where I live.
 
lucidmedia said:
I won't deny that the agencies I work for are overpriced (also note we are talking USD, not pounds so the numbers are about half as large... I can ask what our london offices charge)... but I am not going to complain about it. I have bills to pay and a family to support.

I am surprised that so many are shocked at the idea of a freelance designer or developer asking $100/hr. That is half of what a master plumber charges per hour where I live.
Click to expand...

#1 - Master plumber would be the equivalent of the technical director's rate card.

#2 - Rates for short-term projects (plumbing) and medium- to long-term projects are not comparable. The equivalent to a plumber would be a late-night call to fix a database that crashed. In that case, $100 an hour is certainly a reasonable rate. For normal day-to-day development work, $100 is ridiculous. For Wordpress or Drupal builds, $100 is ludicrous. $300 an hour for development is beyond-the-pale silly.
 
I need to be a developer in america, I thought I was being cheeky in charging £30 per hour (roughly $50) for development work. This works out about £240 a day, never mind a hour. At that price I would never get work. But I guess it is different in the UK. Anyone fancies sponsoring me for a green card???
 
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