New Programming Gig - Advice Wanted

[JoeDavola]

I was recently contacted by an ex-colleague, someone who I respect professionally, who is looking for contract development work done. I'd be working in the evenings as I've got no intention of giving up my day job.

I'm interested as I would like the extra money and there's the prospect of future work. However I've been burned before with contract work so I want to make sure that I get paid fairly for my time and don't end up:

- committing to a project for a fixed amount which then grows massively in scope (scope creep is pretty much a given in development projects)

- ending up providing tons of unpaid support around the project (analysis, testing, training people...basically anything that's not coding)

So if I meet up with this chap and the project looks like it's something I'd be interested in, what's the most professional way to negotiate the money side of things in a way they everyone's happy?  I'd just like to be paid for the hours I work; simple as that, completely transparent. So is it fair to ask that I'll log the hours I work, within agreed limits (i.e. if I spend over a certain amount of hours in a given month I stop and let him know), and we run an agile-type project where I demo the work done to date every 2 weeks or so with him?

[One-percent]

I know absolutely nothing about IT, so take everything I say with a pinch of salt. But, whenever I have done this in my field, I get paid a 'consultancy rate'. In other words, I get a day rate to do whatever they ask. No way would I price up a job and the be subject to mission creep 

[dgul]

most important part is 'educating the customer'.

This is such a difficult thing to do with someone who's ignorant of that sort of thing that often it's easier not to bother (as you've identified).

At the very least make sure he's got some quotes from your standard boutique outfits so that he understands the value of professionalism.

[mikthe20]

Written agreement. Need as clear a spec as possible with estimated number of days (but if it ends up being more it's billable, although you won't go above days agreed without his prior agreement). Agree in writing that any work beyond spec is chargeable at agreed daily rate. Depending on length of project I always like to agree a minimum number of days a month (including how much for support/meetings/amends), which is paid in advance (or at least 50% in advance). Any additional days (which he must agree to) are invoiced at end of month at agreed daily rate (minimum half day resolution unless you really feel like operating a taxi meter). Whatever you do don't invoice everything at end of job as people are very good at stalling final acceptance. If you really must quote for a project then staged payments of 40% at start, 30% in middle and 30% on delivery plus spec creep/support at daily rate. Payment terms (unless in advance) of 7 days from date of invoice (which if he's in a company will end up being 30 days but at least won't be 60-90 day otherwise).

And always retain IP until payment in full!

[t1234]

As a contractor I only do hour or day rate work these days. I had similar experience to you did years ago and now avoid any work where someone is not will to pay for my time like they would any other worker or service.

Also if worried about them paying ask to be paid weekly - this is still very common in contracting. And a proper contract that must include payment terms.

The worst experiences have been where I've got involved with mates where theres been no contract.

 

[JoeDavola]

Thanks for the feedback so far - the person I'd be working for is an experienced IT manager themselves, and knows all about scope creep and all the things that can go wrong. It would be his job to liaise with the actual customer - I'd be the hired coder, although I'd be happy to offer advice beyond just being a coder (again, as long as I'm paid for every second of my time). 

So it sounds like my first shout should be to agree quite simply my hourly/daily rate, and frequency of payment (every fortnight/month) - and that way he won't lose a fortune on me if he's not happy with what I'm delivering, and I won't end up sinking twice as many hours as I'm being paid for into a project.

[goldbug9999]

8 hours ago, JoeDavola said:

Thanks for the feedback so far - the person I'd be working for is an experienced IT manager themselves, and knows all about scope creep and all the things that can go wrong. It would be his job to liaise with the actual customer - I'd be the hired coder, although I'd be happy to offer advice beyond just being a coder (again, as long as I'm paid for every second of my time). 

So it sounds like my first shout should be to agree quite simply my hourly/daily rate, and frequency of payment (every fortnight/month) - and that way he won't lose a fortune on me if he's not happy with what I'm delivering, and I won't end up sinking twice as many hours as I'm being paid for into a project.

This is all good. Generally your gross monthly rate needs to be at least double your gross perm salary to make it worthwhile by the time you've factored in loss of holiday pay, the various risks and  hassles involved. You  also need to look at your local contracting market and assess whether your likely to working continuously or be scraping around for work (assuming you intend to stay contracting).

[spyguy]

I work for money or experience, ideally both.

If i have some side project that i can bang out, or idealky, a variant on something ive done before, then i ask for cash and nail down hour rate or fixed fee. Fixed feefor something youve already got is the gold mine - you make money selling sw not writing it!

If its domething i dont know or have an interest in acquiring skills in then i can be very accomidating in accepting work/project. i.e ill be cheap open to less exact specs - providing its not going to get in way of main money earners.

Bootstrapping new stuff skills is hard. Always helps to have a small project andrefetence on cv.

I dont touch winfows or java these days. u run from anything involvung them - unless i can do the stuff behind html5.

or xml. stinking pile of sh,ite.

 

So, try and work out your hour exposures.

[newbonic]

I agee with the comments about getting the work specified exhaustively before any design or coding is started. It is extremely common for unforseen snags to occur, or feature creep, etc. Then charge per hour/day etc. not per job (unless you can break it down into small components like wot we do in Agile). Also, remember to charge for your time documenting stuff, so that you can pass it onto someone else in their org and not get stupid 'support' calls a year later. Etc.

And insist on getting paid weekly to limit your exposure to it going tits up. Which it may well do if it turns out to be trickier than expected, and they try to keep their costs down.

[JoeDavola]

3 hours ago, goldbug9999 said:

This is all good. Generally your gross monthly rate needs to be at least double your gross perm salary to make it worthwhile by the time you've factored in loss of holiday pay, the various risks and  hassles involved. You  also need to look at your local contracting market and assess whether your likely to working continuously or be scraping around for work (assuming you intend to stay contracting).

Yep that's the conclusion I've come to - ask for double the hourly rate of my programming 'day job'. With weekends and holidays, I'm only in work about 60% of the year in my current job. Add to that pension contributions and sick leave and what initially seems like a good daily rate for a contractor loses it's appeal when you see all the advantages of having a reasonably secure day job, even if it's not the highest paying one in the world.

I'd be doing this on top of the day job so don't mind if the work is only sporadic.

[Mikhail Liebenstein]

22 hours ago, mikthe20 said:

Written agreement. Need as clear a spec as possible with estimated number of days (but if it ends up being more it's billable, although you won't go above days agreed without his prior agreement). Agree in writing that any work beyond spec is chargeable at agreed daily rate. Depending on length of project I always like to agree a minimum number of days a month (including how much for support/meetings/amends), which is paid in advance (or at least 50% in advance). Any additional days (which he must agree to) are invoiced at end of month at agreed daily rate (minimum half day resolution unless you really feel like operating a taxi meter). Whatever you do don't invoice everything at end of job as people are very good at stalling final acceptance. If you really must quote for a project then staged payments of 40% at start, 30% in middle and 30% on delivery plus spec creep/support at daily rate. Payment terms (unless in advance) of 7 days from date of invoice (which if he's in a company will end up being 30 days but at least won't be 60-90 day otherwise).

And always retain IP until payment in full!

Agreed.  

 

Any project needs a clear definition, ideally defined unit and integration test and final acceptance tests, and definitely staged payments based on milestones.

 

For you, Time and Materials is ideal, for the client Fixed Price is ideal. The latter definitely needs fixed functional requirements for your benefit, the former defiitely needs fixed functional requirements for the client's benefit. Anything in between, its in both your interests.

[eek]

Given that they are doing an agile approach time and materials is the safest method. The first bit is to write up a the specification of what they want which will allow you to design it.

That will allow you to give them an accurate idea of how long it will take and the price. Then if they want a fixed price you treble it....

[anonguest]

Just out of curiosity. What sort of programming are you talking about? Web stuff? Visual C++?.........and what sort of application?  commerical/business? scientific/engineering?......

[JoeDavola]

1 hour ago, anonguest said:

Just out of curiosity. What sort of programming are you talking about? Web stuff? Visual C++?.........and what sort of application?  commerical/business? scientific/engineering?......

I guess you could class it more as web stuff, the are where I have most experience and interest is in enterprise integration/middleware. Done a bit of BI stuff too. Mostly Microsoft dev stack. All for businesses.

Never touched C++/C ect...