Topic: What do I charge my client?

What do I charge my client?

mcgrafx
Participant

@mcgrafx

11 years, 2 months ago

Dear fellow BuddyPress Gurus, Creators, Lovers of Code and Experimenters:

I need your help today – before a meeting with my difficult client at 4:00pm San Francisco California time.

I thank you in advance for your time and assistance.

During the past few months, I have had great fun wrestling with buddypress and all the plugins that support it. I ended up creating a few buddypress websites: two for clients and one for myself. After months of many sleepless nights of figuring out the hard way how to make an elegant, highly functional social community with:

1. Customized, professional child theme designs (The design takes the most time)
2. Many levels of membership (some paid)
3. Options for individuals to have their own store

(and many more features…those are only a few of many, many more features that are part of each buddypress website I’ve been building.) I have been asked to create more of these buddypress ‘social communities’ for the same client. I have not put the buddypress website on their server yet (which is easy for me to do) because we are figuring out a good contract for my work now. I have shown them a beautiful designed, fully functional buddypress community that I built for them – before we had a contract for it. They want it, but I don’t know what to charge them for it. I need to know a price for the whole thing. I currently only have a contract with them to build a’launch page’ and a logo for their business – both of which are complete. My client is launching a large, social community which we both think will grow immensely and bring in a lot of money – eventually millions in revenue yearly. They are now looking at making me a co-founder, because they see how valuable I am at building and maintaining this social community.

This is the problem: I just want to get paid. My client is rich, but a penny pincher. They think that by asking me to be co-founder, that I should just work for them for free right now and I can get paid later as the social community makes money. I need to get paid now – and I just want what is owed to me for the community I built. At this moment, I desperately need to know how much to charge for building a well designed, highly functional buddypress social community. I am thinking that is not worth it to be a co-founder with my client, and I just want to get paid decent pay for the work I’m doing.

My client is currently telling me that they will pay me once the social community is bringing in revenue. they have money, but they just don’t want to pay me.

I need to know two things at this time, and I appreciate anyone who has a clue about this:

1.) How much I should charge as a flat fee for one of these buddypress social communities

2. How much should I charge for maintenance for a growing, complex buddypress social community with merchant, membership level, & more functionalities.

I don’t mind working with them on a monthly basis. I would like to just charge a salary – like $80,000 a year, since my client is now asking me to give up my day job to work full time on building social communities for them. I think this is fair since they are a wealthy, wall street financier. Is there a contract for this I can find? If they don’t want to pay me until later, Is there a contract for this somewhere so I can hold them accountable to pay once I put it on their server?

I am currently afraid to put the websites on their server because I put a lot of work into them and I don’t have a contract.

They paid me a small amount for their logo & launch page at the beginning, but I have created much more than that at this point, and they are telling me that they want me to build now & they will pay me later. They are rich and I am poor. They don’t understand that I need to get paid and can’t live off of friendship. I have to give them a solid contract at this point. I don’t have a lawyer or someone to draw up a contract for me that respects me. I once made the mistake of using a contract from docracy.com (months ago – different client) and it provided me with no protection. I can’t afford to do this and pay my basic rent,etc,… so I need to figure something out. Does anyone out there know the worth of one of these buddy press social communities?

Thank you,
mcgrafx

Viewing 11 replies - 1 through 11 (of 11 total)

Paul Wong-Gibbs
Keymaster

@djpaul

11 years, 2 months ago

Really good topic. I’ve tweeted this out so hopefully some freelancers will weigh in with advice!

jeffacubed
Participant

@jeffacubed

11 years, 2 months ago

Whoa – great question/post @mcgrafx!

I’ve spent the better part of the past ~ 14 months doing:

1. Customized, professional child theme designs for Buddypress (The design takes the most time) √
2. Many levels of membership (some paid, some free) √
3. Many++ sleepless nights to do points 1 & 2 (on WordPress multisite + Buddypress + bbPress)

Many of the issues you’ve mentioned, particularly the contracts/fees/maintenance are issues I’ve struggled with in the past, and to a certain extent still do with some clients/projects. I’ll re-read this closer next week, but one thing, only based on my own experience working with buddypress & bbPress w/ clients is that anything involving buddypress (particularly with any full-design customization w/ child themes &/or custom plugin/functionality development as you’ve mentioned) is a ‘significant’ commitment of time + resources on both sides of the table. In my experience, very little happens along the path to ‘outside-the-box-customization’ auto-magically with buddypress! If it were me, I’d ask for 1. a retainer 2. a monthly or yearly mutually-binding contract (depending on the scope/scale – with separate parts for developing the site + future-maintenance ). You could also think about 3. a percentage of future revenue, but that might be more closely tied with being a co-founder & could basically dilute the potential for points 1 & 2.

Still, a great & difficult question – good luck!

-Jeff

Hugo Ashmore
Keymaster

@hnla

11 years, 2 months ago

They are now looking at making me a co-founder, because they see how valuable I am at building and maintaining this social community.

Well one of the first rules is avoid clients that attempt to have you work on a promise of fame & riches or want to make you partners or that say “this will be a valuable learning experience for you” or ” it will be great for your portfolio” or ” we know many people in the business we’ll be able to bring you lots of work if you do this for us at a knockdown rate”

If they realise your continued involvement will be essential/useful/necessary then say to them that you will be happy to for a small (or large!) monthly retainer.

There are many contracts all over the web that are development focussed, you can use them as templates but contracts need to be specific to jobs.projects in hand so templates are only guidelines also remember the problem with contracts is that they are meaningless until the point at which you test them in a court of law, if a job gets to that stage then the contract is pretty meaningless it’s simply a set of guidelines for a judge to use to weigh things up.

Look up the term “Work for Hire” and always be clear that you do not work under a “Work to Hire” contract always retain basic rights to the work like attribution even if granting a “Perpetual right to use”

Don’t provide / transfer any work until you have a basic agreement in place of at least a formal acknowledgement that the work is to be paid for.

What should you charge? not really possible to answer that, this industry has few standards it’s too young, developers charge varying rates from $20ph to $200ph it depends on experience, the more formal technical disciplines such as Network Engineers can charge more but they tend to have far more formal and recognized training; so this aspect is largely down to your skill and experience but try and aim no lower than the $40ph mark anything lower than tends to start to devalue the work and effort.

You can’t place a ‘Worth’ on a social community, it’s just code, a site isn’t worth anything until it starts to build it’s value all you can value is the time and effort you put in to building it and the client must understand that.

I would offer a cautionary note lastly, as this reads as one of those situations where the developer comes of worse so proceed with caution, if they are as high powered as you say you need very simple clear contract and also do not be fooled into thinking contracts need to be complex, the more complex the easier it is to have a lawyer break it, and very easily. A good contract is short and to the point, but when/if you draw one up pay attention to basic indemnity clauses, all the bits that say you are responsible for this or that and do not accept anything that even remotely says they can attempt to recover costs from you if they are sued or if their site doesn’t make a million bucks in the first month, in other words your job is to provide valid working code only.

mcgrafx
Participant

@mcgrafx

11 years, 2 months ago

Hugo, Jeff & Paul:

Thank you very much for your quick response. This has helped me exponentially, and I have some idea of what to talk to my client about today.

After reading through your answers and then looking up successful social communities like ones from the link below that evoke some of the success that my client is working towards, I realized that there is another question I bet many of us are wondering about.

http://wpmu.org/buddypress-showcase-12-unique-and-inspirational-sites/

What kind of revenue is/and can be developed from one of those BuddyPress communities. Given, we can’t tell our clients “This “$___” is a range of how much revenue and traffic you should expect to receive from your BuddyPress social community.” But, it would be nice to know from these communities how much they get in revenue. I know that for some this doesn’t apply – because they are not-for-profit communities. However, the traffic volume question is a good one for all these successful communities and would help us BuddyPress builders as we work with our clients and plan for the future.

Thank you enormously & sorry about all the repetitive language in my original question above!
-mcgrafx

danbpfr
Participant

@chouf1

11 years, 2 months ago

hi @mcgrafx,

I sympathize with your state of mind. That said you learned a lot for yourself and developped for other in the same time. Altogether this gives a few mounth of work.
Now you want to be paid for the dev part of this long time.
How much do you need to live each mounth ? How many time do you have to work in the nearest plant to gain this amount ? Or the nearest backery or what you are able to do in some other activity branch ?
What is the mid salary in your country and compare to your monthly needs. Add 10 or 15% depending on your quality of experience and divide by the # of hours you take to develop the project. (not to learn or test)

This will give you the minimum to charge to your client for a first retain, i think. I agree with Jeff’s advices too.
Based on my own experience, speculating about a client’s richness is vain. Lehmann &Brothers also haved many future millions business in mind. where are they now ?
Thinking that a client will pay you if he is not contractually engaged is vain (why did you say My client is rich, but a penny pincher ?) Oh ! Only a penny pincher ? Why not sharks or vulture investors ? 😀

Because i don’t know where you are, i won’t give you advice about charging. You’re now in the game, and it’s poker ! And don’t be afraid, the first time it seems difficult, but if your client is a wise businessman he will pay you before you drop your last card.

Ben Hansen
Participant

@ubernaut

11 years, 2 months ago

i would echo everything hugo says and maybe add a bit more of my own perspective. First off whenever someone offers me equity as partial or full compensation you have to answer two fundamental questions #1 what is the value of the equity they are offering and #2 does the commitment they are asking from me allow for the proposed cash/equity split. Now those two questions may seem simple but the devil is always as they say in the details.

Unless you have a huge bankroll and can support your own expenses until the point the site returns the value you are hoping for if someone is asking for a full time commitment the answer to #2 will always be no.

If the offer is not for equity but just payment down the road then it really isn’t an offer at all he is asking you to extend him a line of credit. What happens if the site never makes any money? No matter how good the idea may seem, good ideas, businesses and sites die everyday for a lot of reasons as a designer and consultant i feel like it’s my responsibility (both for myself and my clients) to always assume the worst case scenario, remember there are now over a billion websites out there just having a great idea and strong execution is by no means a guarantee of success.

Your wall street client should understand these thing intimately and as hugo suggests the implied tone suggests he’s looking to lower his own risk at your expense and my antenna would be fully perked at this point if were you. Assuming you trust in the idea and the client and you getting some kind of equity cash split make sure the cash portion is something you can live with especially if you are giving up your existing full time job to start the project and think of the equity as being a bonus based on the success of the project.

I do not personally deal with contracts myself (unless a client or vendor requests one) i require deposits and stage payments for large projects but if theres equity involved you absolutely must have a contract as well as lawyer who has no relation to your client to look it over for you. you will also need to value the company in order to calculate what your equity would be worth. if there are no expenses other then your time then theoretically you should have 100% equity.

I’ll sign of with a quote hope it helps mindset wise.

“In theory, theory and practice are the same. In practice, they are not.” – Albert Einstein

Boone Gorges
Keymaster

@boonebgorges

11 years, 2 months ago

I agree with those who’ve said that you should be skeptical of the equity offers. Unless this is a project that you really love, and you believe that it’ll make lots of money, and you have other work putting food on your table, it’s better to get paid for your work than to gamble on potential future success.

As for what to charge: This is really hard. For these sorts of projects – especially for BP projects, where there are relatively few devs doing professional work – there’s really no such thing as a “going rate”. How much your work is worth is really about how much it’s worth *to your specific client*. That said, you need to make sure that you make enough money to make it worth your while. I’d recommend something like this. Come up with a rough figure for what you absolutely need to make in a month (or a year, or a week, or whatever) to be happy. Then, do your best estimate of how many months (weeks, whatever) this project will take you if you devote yourself full-time-ish to it. Do the math to get your bare-minimum number. Then multiply it by two or thrtee. That’ll account for the fact that developers always forget to count in their estimates all the time it takes to communicate with clients, to fix unexpected bugs, to learn new stuff, etc. It also gives you a bit of room to negotiate if the client says no to your initial number.

One more note about flat-rate bidding. You will *need* to have a contract, it will need to contain a very detailed scope/spec, and you will need to be hard-nosed about sticking to the spec – if the client wants changes down the road, get the requests in writing, and charge for them. Every project will experience scope creep, and when you’re working hourly or on a retainer, you have built-in cushion. But with a flat fee, you have to make sure that scope creep doesn’t cost you money. That said, as long as you’re hard-nosed most of the time, you can occasionally grant a special request for an out-of-spec feature, call it a “professional courtesy” or a freebie, and the client will really think you’re swell. It’s all about setting expectations 🙂

Good luck!

modemlooper
Moderator

@modemlooper

11 years, 2 months ago

Whoa, you built a site for someone without a contract and didn’t get a % upfront?

Asynaptic
Participant

@synaptic

11 years, 2 months ago

I’m not a developer but am coming from the client side: let me warn you that any one who gives you BS like that is probably not going to pay you but string you along. This may sound negative but let me explain.

You wrote:

“My client is currently telling me that they will pay me once the social community is bringing in revenue. they have money, but they just don’t want to pay me.”

What does ‘bringing in revenue’ mean exactly? gross or net? that is before expense or after expense? if after expense which expenses? does the expense include their salary? at what level of revenue? how will you verify it? will he open up his books and bank/paypal account to you? highly unlikely!!

No my friend. You are about to get royally screwed. That talk is BS and it is merely another delaying tactic.

Unfortunately there are a $ $ h @ t s in this world (on both sides, owners and developers) and they create problems for the rest of us by making us have to be very careful of who we work with and going through legal channels. Having said that, even if you have a contract do you realize that it isn’t really worth the e-paper it is written on? enforcing a contract is a totally different matter. Do you have the funds to hire a lawyer and go after this guy if he breaks his contract? so what good is a contract?

The best thing to do is to STOP working and tell him: pay me NOW. If you have access to code or the site, lock it down and don’t release it until you are paid.

Killing them Softly ending speech is relevant here (NSFW): http://www.youtube.com/watch?v=5zK-b0INu1k

Hopefully you’ll come out of this wiser and if you play your cards right also compensated for your time.

About setting rates, go to elancer or other freelance websites, check with a ‘buddypress’ filter what the rates are for developers with your level of experience and knowledge. Then multiply it be a geographic modifier to find your rate (for example, if you are in the UK and they are in Indonesia, multiply your rate by 2.5).

shanebp
Moderator

@shanebp

11 years, 2 months ago

OP –

You put yourself in a tough position, waiting this late re payment.
How much you charge them should be based on whether you want to continue working with them.

Re equity: When offered equity, the main issue isn’t financial reward. Ask yourself if you want to make a major investment of time and effort in those offering the equity.

Re bids: Protecting yourself on a flat bid requires a thorough spec, as boone says. The lead time spent on the spec can kill you. And become an albatross if you do get the job.

So I don’t hold much for bids and don’t care much re contracts.
With new clients, it’s about the people you deal with.
After an initial round of communication, during which you provide some good info / advice, provide a rough estimate and ask for an upfront payment.

For jobs you estimate at less than a day – ask for half of the estimate you provide.
For longer jobs ask for at least half of your daily fee.

How they react will set the stage.
If the client balks, dithers or counter-offers, walk away because it seldom gets any better.

Angie Meeker
Participant

@ameeker

11 years, 2 months ago

Ugh. Run. Fast.

Offer to hand over everything you’ve already completed for somewhere between $15K – 20K, then run like a bat outta hell. Asynaptic is spot on. This client is trying to eat you for lunch.

And listen, you have to hear this. Offer to give him/her what you’ve already built and up to two days training on how to use it, then leave. Walk away. Go work for people who don’t make you FEEL like this person is making you FEEL. Don’t hang around this person, picking up their scraps. And do this now while you’re just starting out in your career. Get comfortable with the idea that you can pick who you work with, and that you’ve got a badass skill that deserves respect (and money).