Projects after hours - what mistakes to avoid

Projects after hours - what mistakes to avoid

Most contract problems of any type are simply caused by errors in the contract. This applies especially to projects that we carry out ad-hoc, after working hours, or we work as freelancers.

I was both a programmer and a pentester, but I was always the owner of the business first and it was on my mind to keep the business going. Currently, I also help smaller freelancers to negotiate contracts or clarify certain issues.

Amazingly, most problems sound similar:

  • I made an appointment with the client and started working on the project, but when I was halfway through work, the client changed his mind and said he had chosen someone else entirely.
  • The client wants to work out a few things for him and if he likes them, it will give me some money. Here it is an obvious sucker search.
  • The client hasn't paid me a penny in half a year.
  • The client adds new functionalities to the software every now and then.
  • This is the fifth time I change the colors on the website for free.

As I conduct mentoring, I often get questions from novice programmers about earning money, the scope of the project, and even who owns what after the end of the project. When I hear people's individual stories, I think about two things. First, why the client does not respect the work of the person he hired. Second, why doesn't a programmer, graphic designer or other person know how to run a business?

In various types of beginner groups, I often see one thing. Business takes these budding people to be complete idiots and use them as much as possible. Or it offers to make a project for free for a portfolio. Maybe it results from the belief that a beginner will do anything to supplement their portfolio with at least one free project. I do not know. Or maybe a novice programmer does not understand that by taking the first tiny step in the IT industry, he becomes an entrepreneur. Simple isn't it?

When you take your first commercial project, you become a business owner

The moment you want to earn money from programming, you have to stop thinking like a passionate. You have to think like a business owner. There are at least a couple of problems that can be avoided if we think like the president of the company, not the developer. It is simply enough to engage good business practice. Even if we use a written contract, it may not be detailed enough to protect our time, software development process, intellectual property rights, or not safeguard our livelihoods. Below are some common mistakes when executing projects.

Error number 1 - No contract signed

The industry's biggest risk is doing an oral project. With only this type of contract, it's very hard to get anything done. There are misunderstandings in every project, and misunderstandings arising from the oral agreement cannot be cleared up. We often come to a situation where neither the contractor nor the client knows the exact scope of the project, budget or schedule. A verbal contract usually does not cover terms or rights to the work done. Nobody should work without signing a contract first. What I find strange is especially true of friends and family members.

To improve your comfort, prepare a contract template that can then be modified for each client separately and adapted to each project. It makes no sense to start working on a project until a contract is signed.

Here's another little piece of advice. Never sign contracts prepared by the client. You must have your own agreement template. It is best to consult a lawyer regarding the preparation of an appropriate contract.

Mistake number 2 - Not requiring payment in advance for a specific working time

There is great respect for money in European culture. A programmer who is not paid in advance for a certain period of time actually works for free, and working for free does not generate profits. If the client pays for the given functionalities, it means that he is very serious about the project and treats you as a professional. Honest conversations about money and its payment on time put you on the same level of building relationships.

I usually require a minimum 50% deposit in my contract before I start working. If we arrange sprints and we do not know where we are ultimately going, then I demand payment for the entire sprint in advance. I never start any design work unless I have a signed contract and no payment to my account.

There is one more pro tip. This is the so-called over-invoice and the contractual discount level. Typically, the discount should be in proportion to how the customer pays. For example, you can price something at $ 20,000 and give the customer a 50% discount if he pays on time.

Additionally, remember that the key in this business is work to capitalize on your salary. If the money from the customer is used up, there is no point in restarting the work until the invoice is paid. This way you never work for free.

Mistake number 3 - Does not include billing and payment terms

These include how and when billing will occur. It is not uncommon for a freelancer to get an advance payment, start work and become so involved that he forgets about invoicing until the goods are delivered to the client. So the customer has what he needs and can delay payment or choose not to pay at all.

Include an invoice schedule in the contract. And include payment terms such as on delivery, 10 net, 15 net or 30 net. Include the amount of the late payment fee in the contract. Include information on financial fees if the payment is past due.

Mistake number 4 - Incorrectly specified design details and procedures required for acceptance

Customer extensions are normal and very common. Adding new software functions and changing existing ones also burden the project, affect the work time and the project schedule.

So in the contract, we should detail each element of the project, including the number of possible concepts, corrections and comments for each element. For example, the registration form should contain a maximum of one initial concept, a maximum of 2 corrections and a maximum of two customer comments. Each change introduced in addition to what has been agreed should be charged extra. And each change should require an annex to the existing contract in writing. The customer should sign the addendum before making changes.

Mistake number 5 - Not specifying or incorrectly specifying what the customer will receive and how he will use it

Most of us sell rights to our work, so the rights we sell also need to be precisely defined. The client should also specify which rights are transferred to him, for how long they are transferred and when they return to the creator.

The most important amendment that can be made in this section is the conditions governing the transfer of specific rights. In my case, the situation is simple. I license the software that I will produce with additional warranty and maintenance agreements. In the case of other contracts, I propose to specify exactly what the client gets and for what period of time.

Mistake number 6 - No copyright arrangements

Please note that each independent creator automatically owns his work and the copyrights to that work. A copyright is one that can be assigned to a customer for a specific purpose for a specific period of time, in a specific form, and in a specific manner of distribution. Remember that software is your creation and you must protect your rights to it.

Be sure to include the terms and conditions for the exercise of the rights that you transfer to the customer. You absolutely need to identify when, where and how the work can be used. You can assign exclusive rights or not. The contract must specify how you will pay the client for the additional use of your work. This arrangement protects your ability to generate additional income from your work. Licensing agreements are one of the best agreements for providing passive income.

Summary

Every contract we enter into with a client can be simple or complex. It all depends on the project and the client. Sometimes we even have to adapt our contracts to the specific needs of the client. But the general rule is that the contract should be written, delivered and signed and only then can you act.

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