Table of contents for Tips for Fixed-Price Jobs
- Tips for Fixed-Price Jobs
- Fixed-Price Money Matters
- Fixed-Price Negotiation
- Protecting Your Work
First off, I’d like to thank Josh Breinlinger for commenting on the first part of this series with handy information as well as boosting my cool status by a full ten points! I hope you continue reading and commenting.
Now, on to business. What are some good ways to protect yourself when doing fixed-price jobs? How does it apply to oDesk, GAF, and Elance? Why does Nelson hate GAF and Elance after a couple hours of using each? We’ll be discussing all that and not a whole lot more in the second installment of Tips for Fixed-Price Jobs!
Okay, so Dave mentioned in a comment on the start of this series that it’s a good idea to use milestone payments. Then, Josh piped in and said that oDesk, in fact, supports milestone payments. On number one: I totally agree. On number two: Awesome!
Ways to Protect Yourself
While a lot of people are actually looking for quality work and willing to pay money for it, there are always a few people trying to “beat the system” by getting work done for free. Here are three methods to make sure the money you earn on a fixed-price project actually makes it to your hands.
Don’t go around the payment system
This rule applies to oDesk, GAF, and Elance. Dave gave us one of his experiences regarding using Paypal to receive payment. It didn’t work out too well for him. I also have a little story (not involving going around the system): I agreed to do some work, received a Paypal eCheck, completed the task with record time, and I’m still waiting for the eCheck to clear on the 27th. I did the project near the beginning of this month.
The great thing about oDesk is that you can get your money every week, so it actually can act as your main source of income without having to scrimp so bad while finishing a project. Another great thing is the guaranteed payment on hourly work, so there’s no chance a buyer can put the screws on you to go the extra 10 miles unless they’re willing to pay you to do so.
Use an escrow
Escrows are wonderful things where, incase you don’t know, the buyer puts the money into an account upfront and then releases it when the project reaches a milestone or is completed. That way, you know they actually have the money or credit in-hand, so it’s less likely they’re going to try to take your work and refuse to pay.
While GAF and Elance have escrow services, oDesk does not currently support it. However, oDesk checks the money source up to the amount agreed for the project (as I learned from Josh’s post in the forums after scanning through some flame-wars). So, while the money is not put into an account by the buyer, they have to have access to that kind of money before the job can proceed.
Milestone payments
Usually, escrows are combined with the more useful feature of milestone payments. oDesk supports milestone payments.
When a buyer wants you to do a project, you can set up milestone payments to reduce the potential loss if the buyer is a bum. Also, it helps the buyer keep the provider on track and on schedule. It’s a win-win kind of situation.
All you do is divide the project up into a series of goals, and for each goal a portion of the money is released. If you do a small part of the project, you get a small payment. If they don’t pay you, you bail. Despite the satisfaction you will receive for breaking their legs (and don’t get me started on the respect you’ll get from la famiglia), it will save you a lot of time and grief not having to hunt someone down for the 10,000 they didn’t pay you.
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So, there you have it. Three easy ways to make sure you don’t get Paypal-pwnt like me and Dave. Go use them.
P.S. I’ll save my hatred for GAF and Elance for another time. I’m still foaming at the mouth with rage.
- Are You Interested In the Project or the Payment?
- Tips for Fixed-Price Jobs
- Shape Your Own Freelance Career
- Integrity Matters
- Fixed-Price Negotiation
I’m a fan of the fixed-priced projects and I make sure that there’s at least 50% deposit before I start working. But I’ve never used the milestone payments system yet. How does that work with oDesk?
I’ve used milestones at elance. They work especially well for projects that have no firm end state. Say you are writing a series and getting paid weekly. You just modify the milestones as you complete work, get paid and then take on the next weeks work.
I didn’t know oDesk had milestones either. How do I use them? I have a project now that extends over a month that I would like to milestone my way to partial payments as I go along. This would really help solve the fixed-price dilemma.
It’s on the buyer’s end. If they agree to a milestone system, you tell them that you are going to do X work for Y money. Then, they have to submit a partial payment towards the total balance. I scoured the oDesk community for a bit and found these instructions for the buyer to submit a milestone payment:
You can make a partial payment by going to:
–> “Buyer Console”
–> “My Assignments”
–> Click the “View” button next to the assignment in question
–> Click the link “Make Payment”
You can then make a partial payment and keep the job open.
Let me know if you have any additional questions.
Thanks,
Ron
oDesk
I have approached this in a slightly different manner (though it comes out in the wash I guess to be ‘incremented payments’). If I decide to post for fixed rate jobs these days (and I try not to, I prefer the hourly model) to get a few extra $$’s in my cover letter I indicate to the buyer that I prefer the hourly model and will guarantee a certain number of hours to complete the project.
If they accept that I’ll do the job in a fixed amount of time (what I do is I take their budget and divide into my hourly rate) and if I ‘run over’ on time I eat that time. I’ve done this twice and both times have been successful for me. The buyer likes it because they’re not going over-budget and you’re guaranteeing completion.
I have not worked on a fixed-price project yet but I will surely keep your advice in mind.