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1. Know your reputation and if it is known by the customer. If know it they are prepared to pay, but are they able? Decide how much quasi-pro-bono work you are prepared to do for a good person/cause. Sometimes allow good paying work/clients to indirectly underwrite your good works.
2. Know the market, i.e., your competitors. Some of what you offer is reproducible. Some - creativity, brilliance under pressure, connections, etc. - is not. If you are known for the uncommon qualities people will be prepared to pay. Always ask "where did you learn about me?" It can be illuminating.
3. Know your overhead, what you have to make hourly to meet your weekly/monthly overhead. Profit only occurs after meeting overhead. (Of course, I once advised at WW that when starting up an business the cardinal rule is KEEP YOUR OVERHEAD DOWN)
4. Know yourself and trust you instincts. If your skin bristles when you meet the prospect don't get involved. If you take the job and things start going wrong you will hate yourself for second guessing yourself. Don't do it. Ever. No exceptions. Right now. For this one the rule applies? (Get it?)
Client's that present themselves - obliquely or otherwise - as knowing more than you (in a sense) are best advised to represent themselves, that is, to do their own SEM/SEO/Design. If they don't promptly humble themselves (acknowledge their lack of expertise) when you point out who the expert is - dump them 90% of the time. Only really bright people should be suffered when they present that "they know something". Really bright people also get it: that's there's other important factors than just IQ. I mean the brightest. People out to prove they are smart - dump them instantly. Really bright people have nothing to prove. At worst they are just curious or eager to help and your job is to give such people direction so their energy and interest is well invested.
5. Know the aggravation level of the work. Bill accordingly or you will be unhappy, and find yourself putting off doing the work.
6. Know that if you take job X for Y dollars/hour that you will have issues and problems when job A comes along that is able to pay Yx2 dollars/hour. The most important decision is often the work NOT to take. Refer the work to a lesser able/qualified acquaintance - subtly expressed - and you may make 2 people happy. You will also likely lose the client forever. C'est la vie. Do not refer jerks to friends. Refer jerks to .... well, you get the idea. (They will likely return the favor.)
7. People who flinch/gripe about money in the beginning won't be any happier as you move along and problems, not of your making, come up. Make your retainer suitably high - appropriate to the work - because if they can't pay the retainer they won't be able to pay the future bills. No kidding.
I'm writing this on the fly and likely will come back to see what I've missed. Just thoughts of the moment, prompted by reading the 60 reply thread about billing.
Something I'd like to add as a side note:
For those of you that have employees, every management book I have ever read says that the #1 rule is NEVER keep an employee that causes any bit of conflict in your office. Even if they produce, the conflict they cause has an equally negative effect on the production of everyone else.
Basically expanding on the "Don't work with @***oles" idea.
Make sure you have a contract signed and a deposit from your client in order to start your project!
I've been running a successful business for years now and only a handful of jobs have involved a contract. Contrary to what becky said, if a non-Government client insists on a contract THEN I'm more likely to turn them down. IMHO the clients that don't understand the concept of trust are the ones most likely to cause problems.
I have to agree with too much information - if an employee causes conflict in the office or, more importantly, with clients, then you should have them out the door as soon as legally possible. I would seriously consider surveying clients after a job is finished as in my experience they won't tell you that they're having problems with your employees until it's too late.
I'm actually in the midst of going through with the courts to find out a clients assets to garnish their bank accounts because they refused to pay.
Before taking on their project, I asked this person to sign my contract. Since they lived less than 2 miles from my home and he wanted to have some sort of 'partnership' with additional work for me, I thought I could trust HIM. He kept on telling me that he will drop the signed contract off the next day, but this project was to be done within 24 hours. Because I trusted HIM, I let it go and thought he would drop the contract off a few days later. After the project was finished, he stated that he was glad he didn't sign the contract because he now he doesn't have to pay.
I've had 1 client change a few things that they tried to get away with. I've also had a very cheap company contact me wanting for me to design their website with the response that contracts were ridiculous and so were deposits.
Having a contract not only weeds out the bad clients, but it protects you from damages and any other detailed information that you provide to your clients. It can also state how you bill them and include late fees if they are x days late. What your hourly rate is and that it can change at any time.
What if their server goes down? Do you want to be responsible (sued) for their loss? What if they start adding on pages or services? How are you going to be protected?
I've had a few other bad experiences, but if you use a contract and send it through email, make sure it's in PDF format. Word Doc is fine too, just as long as you protect it.
In this day and age, you cannot just rely on oral contracts or thinking you can trust your clients. I've been doing this for 12 years, but have been on my own for over 2 years. Besides a few bad experiences, the others had no problem with signing it.
Sorry for the long post, but I cannot stress enough that it IS important to use one.
The client makes a request; I email a quote; they email acceptance of the quote; then we proceed. If they change what they want then I note it on the invoice and they pay. Sometimes they don't even require a quote. As far as I'm concerned the email trail constitutes an "offer" and "acceptance" which are the main ingredients of a contract.
If you start to go into detail about payment dates, penalty rates, division of responsiblity, etc. in a contract then you are opening yourself up for endless legal nit-picking. If you simply say "we will do our best" and "you will pay us" then there's not much room for litigation (assuming your product/service is good).
I sleep a lot easier this way ;)
You might want to ask your lawyer if emails are proof that you have a contract. (This is to anyone wondering if they should use a contract or not).