Freelancers’ Show

The Freelancers' Show discusses the challenges that freelancers face. The panel includes technology freelancers and entrepreneurs with many years of experience.

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The Freelancers’ Show: LIVE Q&A #1: October 7, 2014


The Freelancers' host their first live Q&A session on October 7, 2014.

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TRANSCRIPT

CHUCK: It says that we can broadcast for up to 8 hours.

ERIC: I’ve got better things to do [chuckles].

CURTIS: It’s the marathon edition of the Freelancers’ show.

ERIC: There we go.

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CHUCK: Alright.

REUVEN: Hello! [Chuckles]

CHUCK: We have two people in the chat room who aren’t us.

ERIC: Well it’s slightly less than we get in a typical week [chuckles].

CHUCK: Alright. So what questions do you guys have?

ERIC: Alright. Here’s a question. Basically, how long do you guarantee work for? So if you do stuff for a customer and they get back to you—in this example, a year or two later—and demand that bug fixes it be done, what do you do? Is there a standard guarantee you have or is it just based on whatever you decide? [crosstalk 01:58]

CURTIS: There is currently—like it says 30 days on the exact software it was developed for only. So if WordPress upgrades, or any plugins upgrade, or anything like that—not valid anymore.

REUVEN: I just don’t guarantee at all. I mean I’m still billing mostly by the hour or by the day. Typically I bill by the hour but blocks of a day. So I’ll say, “Look. This is part of the work and I’ll work on it. I’ll try to get it done as well as possible and as quickly as possible but I found that offering a guarantee is an invitation for people to come and take advantage of that.

I do have a current client where they keep making these distinctions between, “Well such and such is a feature and such and such is a bug fix.” I think they believe—or at least the project manager believes—that I will treat these differently. I treat it differently in terms of priority, not differently in terms of billing. But she didn’t sign the contract. The CEO did, and the contract says very clearly that I’m just paid for the time I put in. So I don’t put in any sort of guarantees.

CHUCK: Yeah I’m pretty much the same way. I don’t have any kind of guarantee. If it’s something that I did that broke stuff or something like that then I’m OK going back and fixing it. But, again, since I usually bill by the hour or I’m pretty well inclined to make them pay for the time that I spent fixing it.

CURTIS: I absolutely do. Bugs are going to happen in software. If they can’t afford that then they need to pick something off the shelf, and use whatever features it has, and not complain about it if they want don’t want to pay for bugs [chuckles]. That’s all they want to afford.

ERIC: Yeah. I do have to check my contract. I think it’s like a 30 day after I say the project’s done and they get back to me on the bugs. That’s still paid for. They pay if it’s hourly or if it’s in another week. I used to give guarantees because I saw them in a lot of different template contracts. But I got away from that. No one would use it—or the people who did would try to abuse it. So I got away from it and said, “If you have any problems within 30 days—maybe 60 days—I’ll just add it on and move my schedule around if it’s that kind of an emergency.” No one’s really abused that for five or six years since I switched contracts.

CHUCK: Alright. So the next question in the chat is how much of your work is completely remote? We’re thinking about moving in a few years. Do you think it would be possible to get enough remote work so the transition isn’t too bad? So how much of your work is remote, guys?

CURTIS: 99.9%. I have two local clients and I happen to see them more often at Starbucks randomly than anything for work [chuckles].

CHUCK: Yeah. All of my work is remote as well. I have been hired by local companies. The first contract I got when I went freelance was a, “Come into our office and be here.” But after that it’s all been remote.

REUVEN: I would say that almost all of my project work is remote but my training, at least for now, is in person. I’ve been doing a ton of training. So between two and four days a week, I’m out of the house training on site with some company. But then the rest of the time—meaning nights and other days—I’m working remotely. Because I’m in Israel and I work with people often in the U.S., it means different time zones. While it’s late at night for me it’s during the day for them—I’ll talk to them then.

That said, I’m trying to set up a little more time for project work and less time for training because it’s easier on the family. My kids and my wife really appreciate when I’m home as opposed to traveling—even if I’m only traveling what other people do for a normal job. I’m getting up in the morning. I’m getting on the train. I’m coming back in the evening. It’s very nice to be home and be with my family during the day. So I’d say it’s definitely better. Can you do it? Yeah. You definitely can, but I think you should start putting wheels in motion already. If you’re planning a move, you should start trying to figure out—see if you can get some remote contracts all ready, even some small ones—so that when you move it won’t be a sudden shock either to you or to your clients.

CHUCK: Yeah. The other part of that question is do you think that it would be possible to get enough remote work—my answer to that is yes. There are plenty of people out there who are looking. Most of them are reasonable enough to recognize that I want to work from home. And I don’t think you’re going to not have enough work down. Anyone have anything to add to that?

REUVEN: Look. I definitely had some push-back from people—the fact that I’m not in the U.S., the fact that I’m not in their time zone. I think it definitely depends. There are some companies that are totally OK with having people work remotely. They couldn’t care less. There are others that it’s just a full stop—no way can we talk about it. But I think Chuck’s right. There’s so much work out there. It’s a matter of putting out your feelers and finding people, and you will find someone who’s okay with it.

CURTIS: When I had the odd client that insists on it I just charge them exceptional amounts—that I think are just wild. They typically go, “Oh, I don’t want to pay that.” So there’s one recently and I included two days on site—because they wanted two days on site to launch it. The rest of the contract is very profitable and it’s not even right in the city. For me it’s a short drive to one of the bigger towns outside. But then every day after that is $1000 a day for me to come in—every day. They looked at me, and said, “I don’t think we’ll need you more than those two days.” [Chuckles]

Typically it’s $1000 a day for me to go into the city, and they say ‘Why?’ I say, “Well, I can’t work all day. It’s a pain in the butt, and that’s what a pain in the butt costs.” They say, “Oh, we can just deal with it on Skype. Yeah. We can.” [Chuckles]

CHUCK: I put it in the contract—well, not the contract. Some people insist that I come into their office, and I tell them that there is a hassle fee. I put it in the invoice, and it says Hassle Fee and it’s outrageous.” [Chuckles]

CURTIS: I’ve never met face to face most of my clients, unless you can count Skype face to face—in which I met all of these guys too [chuckles].

REUVEN: I have a new potential client that I’ve been talking to and sent them a proposal. I think it was pretty clear but I’d have to do much or all of the work on site with them—it’s not so terrible. But as part of the proposal I also offered them some add-on support. I think I made it clear by putting the word ‘remote’ in there. We’ll see what they think when they get back to me on the proposal. But the support that I would give them for the post press stuff would then be remote after 10 hours a week. So you can sometimes mix it up a bit with different clients depending on who they are and what sort of a relationship you have with them.

CHUCK: Alright. So let’s move on to the next question, and that is a question by J. Jason Clark. It says, “Can you discuss the use of freelancer’s job sites to find work: oDesk, Elance, Fiver, etc.”?

ERIC: It’s a good place to recommend clients that can’t afford you. That’s what I do. I think I got it from Ittybiz. I think I’ve talked about their site before. I have a template like, “How do you say no to a client without pissing them off or burning the bridge?’ One of the parts is like, “Hey, if budget’s an issue maybe you can look for someone on one of these sites.” For me, I charge a premium price because I do a premium service. So there’s a lot of times where I get sticker shock from clients that are just shopping around.

I say, “Look on there. There’s a lot of developers on there that can do stuff. You might pay more in the end. It might be more hassle. There’s going to be a lot more project management time expense you have to do.” But some clients, if they don’t have the budget, that’s the only place they can go if they want the work. So I use that kind of as a referral source; at least they give them an option. ‘Go here. Look for someone like this. This is the criteria you want to look for.” Help them—not write the ad—but make it a little bit easier for them.

CURTIS: Yeah. I didn’t find those very useful when I started there. I tried them a bit but I had more luck looking on other job sites—even Craigslist—and finding jobs off there rather than being on any of the sites that were just mentioned in the question.

REUVEN: I actually had one, and have another great long-term client that I found on Elance. Every so often-every eight months or so until about two years ago; maybe even a year ago—I would send some proposal and say, “Yes, I know we’re more expensive than the other people here, but I’m worth it. I’m this and this and this.” There were some people who would bite on that.

But that a certain point to I said, “The number of proposals, even if they’re boiler plate, even if they’re this and this and this—the number of proposals that I’m sending on—say Elance—to try to find that one amazing client is just totally unjustified.” If I’m going to spend—even if it’s an hour or two a week which is a lot posting just job things–I should be doing other stuff. I should be going to users and posting on my blog and making myself better known. So that’s what I’ve decided to do. So I’ve ignored them for at least a year and I don’t think it’s affected things in the slightest negatively.

ERIC: Exactly. I think there are two people on my newsletter who contacted me that get a lot of work. Most of their work comes from there. After talking with them about it, it seems that they have a strong, robust system for doing proposals, making bid pitches or whatever they’re called—not wasting a lot of time on it but still getting results from it. I think if you’re going to get work off of those kind of places, you really have to have a process in place. You’re watching yourself like a hawk. If you’re more on the open market it’s fine to waste an hour or two writing a blog post because that’s a lot more marketing value than pitching on projects. I know people who can make work on there, but it’s really hard. A lot of people I talk to get work on there and are trying to get off it, because it’s so cutthroat.

CHUCK: Yeah. The thing that I’ve noticed is that when they are looking to hire on there, they’re looking at your rating and your price. So if they feel they can get a little bit better work for a little bit better price—maybe a little worse price—then they’re willing to hire people off of those systems. But the other thing you have to realize is that it’s much easier to land a client if you’re the only person they’re talking to about getting the work done. That generally doesn’t happen on those sites. Generally, they’ll post a listing, they’ll get a whole bunch of proposals, and you have to basically convince them why you’re better than everybody else. If they’re coming to you off of your website or some other system then they may come. They may convince themselves, and then you’re the only one that they’re talking to unless they plain old can’t afford you.

ERIC: Right. That’s actually happened to me. I hired a couple of VA’s off oDesk. I spent time on the ad. I made the ad so it’s like, “Please put this special password in so I know it’s you and I can filter out’—I don’t know. I got 100 applicants, filtered that out until there were people that could actually work and seemed like they weren’t just blasting out there. Still it was like 20 or 30 people. So I had to do three rounds. I think it was another two after that to figure out who’s a good fit for me. At the end, it was sucking so much time. It was so hard, I just ended up hiring someone who had the lowest rate. I was like, “These 20 people are good. So I’m just going to pick this person and see how it goes.” Having the rates in having the ratings on those—it’s nice for that client but it also can make it like a race to the bottom.

REUVEN: That’s the key thing with the sites where it’s 100% the race to the bottom. Yeah, I found that I was able pretty easily to demonstrate my value above and beyond Eastern European and Southeast Asian companies that were charging $10.00 a day for a whole group of people. But you’ve got a lot of other people, even in the U.S., Canada, and Western Europe, who are willing to take a hit on the initial project, hoping that they’ll be able to get a long-term gig with some client. I just can’t do that. I think I have better things to do with my time.

CHUCK: The next question is does anyone have a contract clause to pause development without defaulting on the MSA—AKA, stop further work until whatever round of funding?

CURTIS: No. If they don’t have money to pay me, they can just stop and start paying me whenever they want later. It’s not my problem. Your cash flow is not my problem.

REUVEN: But they also pay you in advance. Right, Curtis?

CURTIS: Always. That’s another question coming up. What do you do with people not paying? Just pay me in advance, or I don’t work. I actually had that last week. They said, “Hey, we applied for some new credit cards. Can we pay you later?’ I said, “You can pay me whenever you want, but I’m not working until you pay me. So that’s going to affect the thing and it’s going to impact the week because I have said no to other clients this week. So you still owe me for the week plus you’ll owe me any extra weeks that may come up.” They said, “I’ll pay you at the end of the day.” I said, “Great. I will start work tomorrow.”

CHUCK: Yup [chuckles].

REUVEN: I so admire that about you [chuckles]. I can’t imagine a) saying that to a client and b) my clients at least in Israel actually respond but maybe I just have to try it.

CURTIS: I couldn’t either. It took me a whole year to get to weekly pricing, because my wife said, “There’s no way.” I just finally think I convinced her mostly and then didn’t tell her I was going to do it. Now she loves it [chuckles].

CHUCK: I think it just comes down to setting expectations. So the expectation is, “You’ll pay me and then I’ll work.” So it’s reasonable there. Going back to the question here my answer is, we both signed the MSA. The MSA says we can stop work at any time—either of us. They just pay me for whatever work they haven’t paid me for yet, or I’ll refund a deposit later if they paid one. I don’t set an expiration on the MSA. Sometimes I have one in the statement of work that I send with it, in which case we just need a new statement of work to attach to the contract. But I haven’t really dealt with that, and if I need to change my rate or anything like that then we just pull something out and sign a new MSA.

REUVEN: Do you guys all have MSAs because I don’t. I just have a contract that I have clients sign that says, “I’m going to be working for you. You own all the materials I’ll be working with.” It goes through the basic stuff, and it says, “I will be charging you X.” X in terms of—X amount per timeframe. That’s it. If I keep working with them it’s still in force. If I stopped working with them then it’s not.

CURTIS: Yeah I just have a contract. Mine also says—I’m going to have to look at it but I think it says something along the lines of, if they delay the project enough I’ll rescope the project as a new project.

CHUCK: Fair enough.

ERIC: Yeah I’ve got a MSA statement of work, SOW. My MSA is like, terms and conditions, legalese, all that. It kind of sets the defaults. There’s stuff in there about if they want to cancel the contract or hold the Statement of Work but there’s no specifics about pausing. How I would handle it is kind of like Curtis but I don’t have that kind of confidence with my pricing yet. But it’s, if they want to do a statement of work for a week and then cancel it a week early we will negotiate how it would work. I’ll probably say, “Sorry, but you paid,” but if they want to pause development. Like say we finished out these three weeks and they want to pause before they do another four or five. I just say, “OK. The MSA says it still valid. I just won’t schedule you. Then when you have the money, we’ll just schedule another SOW and start again.

CURTIS: Yeah. My payment terms say that if you decide on an idiot after week one you can walk away after week one and only owe me for week one. That’s fine. I can do the same thing and say, “I’m not happy with this. I’m done. So I’m just keeping what I’ve done. Here’s all the work. You can take it to anyone. I hold no license on it. Just take it.” So if they say, “Oh, we just don’t have money. We can’t pay you right now.” That’s fine. I just deal with it. I don’t lock them in, which is part of the thing I give them for prepaying me everything.

So I’m probably going to move and start looking at 100% prepayment. I’ll have to see because that won’t work necessarily with my out clause. Then I have to wrestle money back; figure out who owes who what. Do you know Kirk Bowman who we interviewed on 109 who actually does 100% prepayment, and if they delay a week he reschedules the whole project. So they might owe him 100% again [chuckles].

REUVEN: I should say when I do retainer deals—I’ve done a few times—I have a clause in my contract that says that either of us can stop it at any point but we have to give 30 days’ notice. On two occasions this is come in real handy because first of all, if you’re doing a retainer deal you’re expecting certain income and every month. For them to just sort of come to you and say, “Bye, bye!’ That can be really bad financially and professionally. So I’ve done this three times with clients and in two cases they said to me, “Well, we don’t need you anymore but the contract says 30 more days so I guess you’ll be coming here twice a week until then.” [Chuckles]

Yes, yes. So the used stuffed animals as part of the communications theme. There was a third client though where it was a little messier. I was doing a lot of traveling, doing my PhD, going abroad to teach, and they didn’t really need me. So they said, “Listen. We want to stop. Now we know the contract [inaudible 18:27] and I called the training company I work with. They said, “Yeah we’ll fill in those holes.” So I went back to the client and said, “Fine. Done. We’ll just end it now.”

ERIC: Yeah. Retainers are kind of weird. They’re basically paying for access to you. So if you don’t have access—say you’re traveling like you said—the client’s not getting some of the benefit. If they’re paying for access to you and they’re just not using you that’s kind of on them. I try to remind them–it’s every other week, if not every week of, “Hey, here’s your retainer. Do you need anything?’ If they don’t take advantage of that, they don’t take advantage of that.

I have a support contract that was pretty much like a retainer thing. They used me two or three times throughout the year and I kept following up with them seeing if they needed work, but they never did. So it was good. It was a support thing, and they didn’t need to support. So they were fine on their end. They could’ve taken advantage of my knowledge a bit more.

CHUCK: Alright. Should we move on to the next question?

REUVEN: Sure.

CHUCK: Oh, I know that there are stories for this one. Have any of you encountered issues getting paid on time? [chuckling] No! No! I always get paid, or get even [chuckles].

[Crosstalk 19:34]

CURTIS: I told you my big story where I just don’t work, and that’s been almost a year now. Ever since then I’ve been very lucky. All my clients have paid me. I have one client that I’ve had for five years that every so often that date goes past. They have a few hours that I do for them in a month and the date goes past 10 days. I say, “Hey, you haven’t paid me and here’s your interest.” They just go, “Oops’ and pay the interest. I’ve had them for years. I don’t generally sweat it, but even then when they haven’t paid I’ll tell the development team, “I just can’t work for you.” That head dev goes, “Yeah fine. I’ll go talk, and take care of that for you.” [Inaudible 20:07] So that’s my big one, but I’ve had them for so long. It happens every once in a while and I typically don’t sweat it. That’s the one I was just mentioning. It’s under 2% of my income in a month so it’s not that big a deal.

I actually have a friend and his account only works once a month so my standard invoice time is out in 10 days and his account works once a month. So he’s always late, but it’s only $25.00 for domain or something like that. It’s certainly nothing that I ever concern myself about. He pays me eventually and that’s it.

CHUCK: Yeah, I have two stories on this. One is, I had a client. They wanted just a really simple site built. So when I quoted him I said, “Look. If everything goes absolutely smoothly, it’ll be $4000 and if it doesn’t it’ll be $10,000. I’m guessing that—I was billing hourly—it’ll be about $8,000.” It turned out I was within $100. It was $8,000. So he paid me the 4,000 upfront and then he refused to pay the other 4,000 saying, “Well you said it was only going to be 4000.”

REUVEN: Yeah.

CHUCK: I sent him copies of the email; blah, blah, blah. [chuckles ] He didn’t send it to me. So somehow I neglected to send him the rest of the code. [crosstalk 20:16]

CURTIS: Somehow?

CHUCK: Yeah [chuckles]. I got a whole bunch of nasty emails and things like that. But yeah, eventually that’s what it came down to. If you want the completed web site that’s fine but you don’t get the code. You can’t always do that, but in that case that was something I was able to do. So they just didn’t get the value pack. Of course I had to pay my subcontractors on that, and that’s another issue. But that’s one incident.

The other incident was last year. There were some communication issues between my client and his client. I was actually subcontracting for him. He had to fight them to get paid and therefore I wasn’t paid. Eventually, I don’t think he ever got paid because his contract said, “If you’re not happy, you don’t have to pay me.” My contract said, “I don’t care if you’re happy. You have to pay me.” [Chuckles] I do care if they’re happy, but it says you have to pay me anyway. So, it took him six months to finally pay me everything he owed me. So I had gone way out on a limb to pay subcontractors on that contract as well. So it was really painful to not get paid.

Eventually, what did it—he’s actually a local guy. I have an answer to the next part of the question in a second where it says, “Any tips for recognizing shady gigs up front,” related to this. So he sent me the money in May of this year, finally. What it was, was I emailed him and I said, “The next email is going to CC my attorney so that we can start figuring out how to get paid.” That’s when he forked over the money. But the thing is he’s local here, so he knew that I could sue him. So I think that’s why he wound up paying out; because all I had to do was take my contract and invoices in and he had no recourse.

ERIC: The pin on your contract; that’s the last straw. Most of the time you’re never going to get that far. But on your contract, you can say how ownership is and mine calls out—even if it’s work for hire where they own it; all the code—it says I don’t transfer ownership until all payments are current and all that. So in a way, technically if they don’t pay you, they’re using the half of the code that you’ve given them but they’re using it without ownership. I don’t know if it’s DMC but you can do legal actions; actually take it back from them and sue them for damages and all that.

That’s the atomic version of that. But I found that just bugging the crap out of them tends to work. One of my first clients, I called their AP office every morning for two or three weeks until they paid my invoices. It annoyed the crap out of them, but I got paid.

CHUCK: One other trick that I’ve used is that my contract says that I get 10% per month in late fees. So I’ll email them after a month and say, “You realize that you’ve just tacked on about $400 or whatever [chuckles] in late fees. If you pay me this week, you don’t have to pay the late fees. I understand. Things happen.” That way it’s not this antagonistic thing. It’s a, “Hey, I get that things happen, so let me help you out here. I understand, and I’m going to be understanding. But I also want you to understand that I need to get paid this week.” [Crosstalk 24:27]

CURTIS: There should always be room for understanding.

ERIC: Yeah.

CURTIS: I’ve sent invoices on Wednesday, and then I get an email within 20 or 30 minutes from the head saying, “Our accounting department is on a conference. They left today. They will not be back until next Wednesday. Is it OK if they pay you next Wednesday?’ I say, “Sure. Get the invoice paid by next Wednesday, we’re good to go.” We’ve been working together for 15 weeks. Everything’s been paid already all the time, and so it’s not a big deal. I’m not concerned over the extent of grace. The last one was, “I’ve paid one invoice months ago. Now I’m paying for my first second week. Can I pay late?’ ‘No. You cannot pay late. On the first time, you really owe me a payment on time.”

ERIC: I had a client that was a multiple year client, I think, and they lost my invoice—I think it just didn’t get transferred over—and it went in between their AP cycles. It ended up being late. I’m like, “Yo, what’s up? You’re late on this.” All of them were like, “Oh!’ and they jumped on it and paid right away. But at that point it was already late. My point is sometimes I think I need to send a reminder around net 15 and say, “Hey, FYI you still have an outstanding invoice. This is just a reminder.

REUVEN: So I just had something with a client last week in England; I’ve been working with him for at least three or four months now. It’s overall been OK. The first invoice they paid totally on time. The second invoice I messed up, and I thought I’d sent it but I had not. So I sent it three weeks late and begged them to pay me a week later that would normally be net plus 30. They were nice about it and they did. It took a little bugging, but they did it. The next invoice was totally fine, approved, everything. So I guess it was September, it wasn’t on time. I got an automated response from her saying, “Well I’m on vacation right now. I’ll be back in a few days.” So I emailed the project manager and said, “Hi. I just wanted to make sure that this is going to be on time.” No response from her about that, but I did get a response from her say, “Yeah, I’ll get back to you about your email messages soon.”

Comes October 1st: no payment. Comes October 2nd: no payment. So I emailed the bookkeeper again. I said, “What’s going on.” She said, “Oh, I haven’t received approval yet from the project manager for your project. So I don’t think I’ll be able to do the payment.” That’s when I went completely ballistic. I was on site training with a client, and here I am having to deal with this email and this payment business. So I emailed the project manager and the bookkeeper and said, “Look. This was invoiced on time for work that was approved that you are contractually obligated to pay me for. You had to pay me by October 1st. Why is this not done?’ To which the project manager emailed me back and said, “I’m on a train to London right now. I’m meeting with clients this evening and I’ll be meeting with clients tomorrow. So hopefully I’ll be able to deal with this tomorrow afternoon before the weekend.”

So I emailed her back and said, “Look. It does not have to take time. Call the bookkeeper. Approve it.” Then I sent her an SMS on her phone and said, “This is Reuven. I know you’re in a meeting. Please take the 30 seconds you need to call the bookkeeper and tell her to approve it.” What do you know? As Eric said, being annoying does have its benefits, not with the people who live with you but with the other [crosstalk 27:27] [chuckles]. Basically I got an email from the bookkeeper saying, “Yes. I’ve approved the payment.” Now we’ll see if we’ll continue with this project. I’m not sure if they like me, I’m not sure I want to work with them. But this was just ridiculous and the squeaky wheel definitely got the grease.

ERIC: Yeah. What I would do after that is change your payment terms so next time you renegotiate say prepayment up front, or you need to put up a deposit of 50% and we’ll draw for that at the end. Put stuff in place. I’ve done that to clients, and where I’ve kicked them from net 30 to net 0 to prepay before. It’s a business risk for me to basically play the credit card company for you and give you a loan. I take checks. I take Paypal. I have Stripe set up so they can pay with a credit card. If you don’t have the cash, that’s the only reason you shouldn’t pay me. If you don’t have the cash and you said you did when we started, that’s a different discussion. But it takes maybe 30 seconds to pay an invoice. I don’t even care if they have the invoice number. Send me the money, I’ll figure it out, and I’ll account for it. Sometimes you just have to treat your clients a little bit harder and say, “Look. If you can’t pay me, we’re probably not doing business together because business is a transaction on both ends,” and move on.

REUVEN: In this particular case a) I know they have the money, b) I was really, really close to calling the number of their board of directors, who’s a member of the investment fund that owns this company, and complain to him. He likes me, and this would have ended in bad things. But basically I know who to talk to in the next day or two about how we move forward in the project, and how we move forward with payment. I’m making it very clear about, “Either we change the payment terms,”—or they have to understand that I leave clients when they don’t this. I have done that in the past with clients. This is not a negotiable. I explained to them, money in small business is hard enough without having to worry about whether people are actually going to pay me for work that I did and they promised to pay me for.

CURTIS: [Chuckles] I had an old contract version that charged interest plus all my time to at a minimum, a half hour per email to do [crosstalk 29:26]. By the time I emailed them, it was like a half hour. They’d get an email and an invoice. “Here’s the new one; here’s the email I had to send you to remind it” and it would go up super fast, typically. They would get one, and they would say, “Oh, let’s just pay this now.” The pain was instantly their pain. I’d be like, “This is what the contract says. Every email [crosstalk 29:47].”

ERIC: All this stuff. All of this getting paid. If you go to prepayment up front, all of this goes away. I mean, I’ve done this in the past [crosstalk 29:55]. It’s like, “I’ll pencil you into the schedule, but before I give you a firm commitment and agree to do this, you need to sign the contact, sign the SOW, and here’s your first invoice for the first week. Once all of those are done, then I can schedule you in and we can work on it. If someone’s going to bump your time, I’ll let you know, give you a day notice to get everything done. But if not, you get your time bumped.” It’s worked. I’ve had people, I think within 20 minutes of me emailing the invoice, I get a payment. So I’m like, “Alright. That’s how we do this.”

CHUCK: Any tips for recognizing shady gigs up front? This is the other part of that same question.

ERIC: Trenchcoats. Dead giveaway [chuckles].

CHUCK: So on the two examples that I gave, the first one, I knew he wasn’t in the country and things like that, so what I did was basically got a deposit up front. So I ended up getting half the money up front and never got the other half. So I did have to front some money for my subcontractors because I subcontracted some of the work. With the other one, I actually talked to someone who had worked with them before. He gave me some warnings, and I ignored them.

ERIC: You took on the risk for it. You said it would be a fine risk to take on, and it paid out the wrong way. [crosstalk 31:03]

CURTIS: A lot of my client onboarding process is actually me telling the client, “I might not be a good fit, so you need to tell me why you’re a good fit.” That’s changed drastically in the last six months, even the type of clients and how they pay. When I say, “This is how they pay,” they just say, “OK,” because by that point they’re essentially chasing me. So even my first email. Basically at the beginning it has a bunch of questions. It says, “I’m going to figure out if I’m a good fit’, and all the next lines are like, “No, no, no, no, no, no.” There might be other things that are a better fit for you, and it’s probably not me.

ERIC: That’s how you do it!

CURTIS: Yes, I play hard to get, Eric. You are correct [chuckles].

ERIC: That’s not a bad thing.

REUVEN: Look. I mean, how do you recognize these people in advance? Well, my system for recognizing shady people is to tell my wife about the potential client, and she says, “Boy. These sound like terrible people to work with.” I say, “No, no, no! It’ll be fine. They seem great.” Then they don’t pay, and she says, “I told you so,” and I say, “Actually, you’re right.” [Chuckles]

CHUCK: There’s a lot of trusting in your gut that definitely pays off, there.

ERIC: Yeah. I tell a lot of people—I’ve written a series because I got tired of telling the same thing—but to figure out your ideal client stuff, I use good, bad, and ugly because it’s easy to remember. Make a rating system, and rate all your clients that are coming up. Let them know—or don’t let them know—but for me, if it’s an international clients it’s a bit more risk. So I don’t knock them down a lot. I mean, I don’t work internationally, but I say it’s a bit harder because I can’t chase someone in Germany. It’s going to be really hard legally to get them to pay, and there’s going to be other hassles.

So figure out that stuff before you get into a client because then when you look at them and evaluate them, you can think about—“So this guy is a four out of five on this scale so I’m just going to pass on this.” Maybe you take it on like Chuck did and go up front and say, “Here’s the risk point. What can I do to minimize it? I can ask for a deposit. I can ask for money up front.” Another one is to lock it down so the project you’re doing is shorter. So instead of being a month long, make it a week. Make it three days. Just renew it over and over so you get into this habit of having good successes and you can see are they going to flake out right away or not. But it’s almost a business in risk management, figuring out where you’re exposed and either being aware of it or working on some way to get rid of it.

CHUCK: Nice. Another question is, “What do you do with a client that is 100% late?” They always pay eventually within 60 days but that’s double the net 30 terms.

CURTIS: Double the cost, like your rate. I’d be very tempted to say, “Hey, you don’t want to pay that long? Totally fine. Here’s what it costs you to pay that late.” That’s what I would say, but it would be some multiple of enough that I think it’s crazy to ignore them because it’s just not worth it for me businesswise. That is extra risk for me, and risk is worth a lot, just like travel costs a lot. I just don’t want to do it.

CHUCK: For me, the time that I got paid after six months, it was nice to get paid but for that six months I may as well have not gotten paid. There was a lot of hassle and personal stuff that I had to deal with in order to make it work. [Crosstalk 34:12]

CURTIS: Like with prepayment now, if they didn’t want to pay me for sixty days I guess they’d be paying me the whole time anyway. It’s like their invoices keep growing a weekly rate all the time, so I really don’t have to deal with that now. One day late is really all I’ve dealt with, and the one is usually one day I’m not working so the next day I say, “We really need to figure this out how we’re going to recoup this day, and it’s probably going to cost you an extra bit at the end of the project too.” That’s the end of late payments.

REUVEN: Look. I have a client like that now, where he was paying here late. You got to drag it out [inaudible 34:43]. You’ve got to send checks on the first of the month, and you invoice us on the second of the month. Then I wouldn’t invoice on the last day of the month and he’d say, “Yeah, I was travelling and I couldn’t get to it.” I’m thinking to myself, the guy actually has a business. He has a few people working for him. It seems very strange. I think Curtis was right. None of that is your problem. I said to him finally, “Look. I need to get paid on time. This cannot work if you just keep delaying these things.” Sure enough, this month and last month the payment has shown up on time. This is just the sort of thing that as it [inaudible 35:13], it adds to my stress [inaudible 35:14 things. I want to be doing other stuff. I have little enough time as it is. [Crosstalk 35:21]

CURTIS: I have one client. I subcontract for one freelancer, and I really love working with her and she had a similar issue where she was late and she said, “My client’s paid me late.” I said, “We’ll let it go this time. We’ve worked together for a long time, and I like working with you. But that’s not my problem. Next time if I’m invoicing you, and you’re signing the contract, you need to save whatever you think you’re going to pay me—20% extra just in case because that happens—and then you pay me. If you’d like me to invoice the client, I can have that discussion with them.” She decides that I’ll work with her. She’s awesome, and that time I said, “This time, let’s just let this go. You get paid, and however you think you can pay me, just work it out because I don’t want to do that. I like our relationship.” We still work together and we trade projects back and forth. She does design. I do development. But it’s not my problem. It’s your problem. So if this is how you like to deal with it, this is how I deal with it. You should deal with it that way or find another way that works.

CHUCK: Right. Next question. How do you handle intermittent expenses when [inaudible 36:16] bucket for testing, if you fiber icons, copy text, etc.?

CURTIS: I think profit margins should cover that.

CHUCK: Really? My contract says if I incur any expenses building their software then they will pay for it and [crosstalk 36:30]

ERIC: Mine does too, but S3 is a drop in the bucket, fiber is cheap, and copy text that can get into grand, hundred dollars. That I would pass on or I would just make my client buy it straight up. I would say, “Here. Buy this thing. [Crosstalk 36:46], when I’m done.

REUVEN: That’s the key. I had terrible problems where I bought things for clients, and they have to pay me back, and then who owns things and so forth. Domains and whatever. I much, much, much prefer to say to a client, “Please buy it. Here’s what you need to do.”

CURTIS: Yeah. My general expenses like servers and stuff I just pay it. It’s just part of my profit margin. When I do AV testing and I have to get a more expensive optimizing account, that’s just part of the profit margin I built into it. When they need a plug in, that is something they buy and they provide to me because I’ve not even who owns it, and guess who owns it. They come back and go, “Hey, I need to get an upgrade key,” and having to bug them all with renewals. I don’t really want to deal with it. I have a way better things to do with my time than that.

They’ll buy it. They’ll give me access to their account. I’ll set it up for them, and they get all the invoices for it. A few clients in the past have said, “Hey, I want you to buy for me.” I literally just doubled the price. I say, “Now it’s going to cost this much for me to buy it plus my time to go do it.” I don’t want to do it, and that’s trying to account for long-term pain in the butt factor. [Crosstalk 37:49] I make it their problem a lot. I just double the price, so that way it’s their problem. It’s more convenient for them to do with the other way which I think is better.

ERIC: Just say, “If you want this theme or this plug in and it has to go through the purchasing department which will take a bit of time with cut of PO.” Add some BS around it so it does justify the extra expense.

CURTIS: No. I don’t even do that. I just tell them it’s a pain in the butt. This is how much it costs to be a pain in the butt to me, and I tell them why. I say, “This is why it’s not a good idea. I’ve done it before. This is why it fails. So let’s not do it, and here’s the process.” They say, “I’d still like you to do it.” I say, “That’s fine.” It’s like a $200 expense turns into $500 instantly. Double plus frustration right? It’s that every year they want to renew it too. It’s double plus frustration.

CHUCK: Yeah. I don’t usually put those things on the invoice unless it’s recurring or something I would’ve bought anyway that costs more than a few dollars.

CURTIS: I include it in their estimates for them so that they can see it as a cost. Like, “Here’s your extra expenses and extra purchases,” so they can factor it in. I don’t put it as an item that they’re paying to me. It’s just an extra expense or an extra purchase that they need to make.

ERIC: Like if I know the final document that I have, there’s work product that I create that is unique to what I make. There’s third-party resources, which is typically open source stuff. Client materials, which is stuff they supply. There’s another category that’s other things—like if they have to buy something, I’ll document it there as an estimated cost. I wouldn’t invoice it unless I had to get it, but it’s just so they know when they’re signing it. ‘Oh, there’s another 1500 for copyrighting for a certain page.”

CURTIS: I have clients buying a WordPress plug in called I sell, and they said, “Can’t you just get it?’ and I said, “No. You need to set up an account, and purchase it yourself, and then deal with it,” because if they decide to go with someone else later, I’m entirely divorced from the relationship outside of me as a plug in vendor. That’s a separate chunk of my business. I had a few clients, “Do you need the account?” “I don’t actually need the account. I don’t need you to send the login information for that account because I can see your license keys, but you need to go purchase it first. So once you’ve purchased it, then I will install it on your site. Until that point, nothing.”

CHUCK: So which type of work is preferred for selling time work project? [crosstalk 39:58]

CURTIS: That’s when you’re going to charge hourly right?

ERIC: That’s what I think.

CURTIS: Under these type of projects, don’t charge hourly [chuckles]. No.

REUVEN: Basically, the advice of the evening is, just do what Curtis does [chuckles].

CURTIS: I’m just going to sit silently now for other people because [crosstalk 40:16]

REUVEN: Actually I would love to get to where you are, Curtis. It’s very impressive what you’ve actually done with contracts, and billing in advance and so forth.

ERIC: Just say no, and be mean to your clients seems to work [chuckles].

[Crosstalk 40:35]

CHUCK: I do have to say that a lot of times when I’m talking to clients—so for example project and feature based work vs. staff augmentation—it still depends on the client. You just have to talk to them and figure out what makes sense so a lot of times they have a certain amount of budget they’re willing to drop on you every week or every month. Sometimes they just want to do it per hour, and pay for whatever time you’re willing to put in. Sometimes they have a budget for the entire project or that particular feature. So what you may wind up finding out is that, “This is what it’s worth to us to get it done.” Then you can figure out if that makes sense.” But I don’t know if it necessarily directly correlates to staff augmentation or project or feature, or other types of work.

CURTIS: Yeah. If you’re going for staff augmentation, I’m selling my value to the team right? I think that the last staff augmentation it was getting the development process solid and everything else. We were looking at, “You lose this many sales when you crash your site on every launch. So we’re going to recoup all of those sales.” So selling based on value rather than, “Here’s my weekly rate,” which I suppose is a unit of time anyway.

REUVEN: Yeah. I’ve found it’s harder and harder for me to sell myself for staff augmentation. For those who don’t know, staff augmentation is basically you more or less become a member of their staff just on a contract basis and maybe a temporary unit of time. So you’re there for a month or two months, or even a week just to help with the development. They either can’t, or won’t, or hire a developer. So I found it’s harder and harder for me to charge high rates for doing that. But as Curtis said, charge higher for a specific kind of development that they really need, and that will help them get from point A to point B. There they’re willing to pay a little bit more for, and they see it in a different light.

CHUCK: So the next question is, does keeping the code only work on single person projects? [Crosstalk 42:32]

ERIC: I think it’s in regards to if they didn’t pay you all the money they owe you.

CHUCK: In general for freelancers, if you create anything basically then you own the copyright to it by default the way the law is written in the United States. So if you write some code, then you own the rights to that code. Then in your contract or statement of work or some other document that has some kind of binding legal agreement you agree to either grant them a license to use it or you grant them ownership. In either case then, they can use the code, or the artwork, or whatever else that you’re freelancing.

So it doesn’t matter if you’re contributing to a group project or whether or not you’re working on your own; just you contributing to the project or people that work for you contributing to the project. There has to be some agreement that the intellectual property changes hands. If the terms are based upon payment, then when they pay you the contract basically says, “You have an ownership, or you have a license.” If they don’t, if they fail to do that, then they just don’t. It’s pretty much that simple, and even on pull requests on GitHub for example, which is a way of contributing a section of code to an overall project, you still own the code that you wrote until it changes hands.

ERIC: On a team it might be a bit harder to not give them the code or enforce taking stuff down because you might be one of 10 people working on a project but legally they are in a way legally violating. In a way it’s like they stole the code from another company and put it in their project until they pay you. Legally you can chase after them and do a bunch of things. Practically it’s going to be a pain. Usually I just go to the client or the project manager, lean on them or lean on procurement or whoever is holding it up. I had a client before—my invoices were frozen and they should have been approved but they were approved.

It was just bureaucracy stuff, and I leaned on my project manager and they went and basically said, “Send Eric a check. We don’t care about PO number or any of that stuff. We just want to send him money because we need his help. If we don’t get his help, then this project’s dead.” That broke the ice, and from then on the project was successful and worked. I could’ve at that point said, “Okay, my attorney’s going to be sending you a cease and desist letter, and we’re taking back ownership of that code. You’re using illegally therefore your startup is infringing on IP,” and a whole bunch of stuff like that. In that case they had more money and more time than me, so they could’ve fought it out in court. Even if I won, I would’ve probably lost my business or would’ve had to deal with it for years on end. It’s easier to just try to get them to pay; like I said before, get them to pay upfront and make it not even a problem.

CHUCK: Well and the issue there is usually that you’re basically threatening to cause them more hassle than it would take for them to walk down the hall to Accounts Payable and get you paid. That’s kind of the deal with getting paid once it goes to the point where it’s not really a discussion anymore.

ERIC: Yeah. But some companies are, if you sue them, the project manager now is not even involved. It goes to the Legal Department. So it’s actually out of their hair and it might be easier than getting you paid.

CHUCK: That’s true.

ERIC: Try to get into that situation in the first place, but if you do—I mean sometimes you just walk away. You just have an unpaid invoice. You just write it off and say, “I couldn’t collect on it.” It sucks but it might be the better thing to do for you personally, emotionally, and also for your business to just write it off. Find a new client and replace the income.

CURTIS: I did that once when I worked for lawyers—twice actually when I worked for lawyers—basically the part with the project said, “Eh, we are lawyers, we can take you to court, and you can’t do anything about it.” I could never afford lawyers either. That’s basically what it came down to. Their email was all legalese and crap. I just looked at it and said, “This is not worth it in any fashion for me to do this.” I wrote off the money and my wife and I dealt with not having that much money for a bit. Even my dad who is a fighter said that they are probably contributing all these laws. My uncle who is now a lawyer—wasn’t quite at the time—was saying, “Oh, I could totally help you with this.” But the stress alone—dealing with it was like $1500, which was a lot at the time—it just wasn’t worth it. I was like, “That is not worth $1500 to me. I’d rather get a second job then deal with that crap.”

ERIC: Yeah.

CHUCK: Yup.

REUVEN: When I was in graduate school, we rented our apartment to total deadbeats who didn’t pay us. So we had to deal with lawyers, and court, and going after them. It’s not freelancing or anything, but the amount of time, energy, and money you spend going after people to get them to pay, and then try—we had a judgment in our favor. The judge was like, “Clearly these people owe you money. For beating you ass for two years.” Trying to collect from them is basically an incredible, incredible hassle, and if it didn’t amount to me signing a form every eight months to a year, I would have given up on it entirely already. Now I’ve mostly given up on it, unfortunately.

CHUCK: Yeah. I want to go back to the ownership question just for another second. You’ll notice that a lot of open source projects, especially if they’re using the Apache license, or BSD license, or the GPL license, they’ll have their contributors sign a contributor license agreement that basically assigns ownership of their code contributed to that project. That is so they can actually then distribute it without the developer having any recourse—to say, “You’re using my code without a license.” So it really does come down to that, and a lot of times they have to be aware of it.

[Crosstalk 48:09]

ERIC: It’s to protect them, and I’ve seen that a lot. If people are getting venture capital or any kind of investment, at that sophistication level they really need the IP stuff for all the boxes to be checked. So they’ll use stuff like that. They’ll use simple little documents or contracts to make sure that, “Yes. I have transferred all the rights to this company.” Even though there’s this big contract that states having that, so that when they go for another round and they’re doing due diligence, they can tell their investors, “Yes. We own all this code. We are paid up.” All that stuff. So typically you don’t have to mess with it. The company will come to you and do that. But that’s there too.

CHUCK: The next question I’m seeing is, how long do you typically keep a client?

CURTIS: As long as they’re paying me [laughter]

CHUCK: As long as I’m happy working with them and they keep paying me.

ERIC: Yeah.

[Crosstalk 48:58]

CURTIS: A lot of my clients are, say, three or four months maybe at the long end. Then I have the odd—I have that one client that I talked about that occasionally just pays late because whatever. I’ve been with them for five years. They came with me from $50.00 an hour, to now I charge them $150 for their small fixes now. They’re quite happy to keep paying me. They never complained about a rate increase. Why would I stop working with me if they’re generally very easy to work with when they say, “Hey, we need this.” I say, “I can’t do it for two weeks,” and they say, “Yeah, that’s fine.”

CHUCK: I’ve had a few that drifted back. Every six months or something they have work for me for a few weeks. Yeah, but for the most part it’s usually 3 to 4 months. I had one client when I was first getting going. Actually I had two of them. They were concurrent more or less, and they both were about a year; year and a half. But it was a larger project on the one case, and maintenance on the other. So I think it just depends on the contract. But as long as they’re paying me and I’m happy working with them.

REUVEN: So I’ve had two clients now for five or six years, and if one of them haven’t gone out of business then I probably would still have them for more than 10 years. It wasn’t my fault, folks. It wasn’t my folks. It wasn’t my fault [chuckles]. Those random website crashes weren’t my fault at all. I actually really like having long-term clients—very long-term clients. It’s fun. It’s interesting. It means that I’m an integrated part of the team. There’s a huge amount of trust that is built up. Unfortunately I often see that as normal, or to be expected as opposed to exceptional and nice. But no, I really like working with some of these people for long periods of time. I tell people that when I start working with them—when I do an initial call with them. I say, “My basic criteria are I want to work with nice people on interesting projects for a really long time, if possible.” I also don’t work on a weekly basis. So it’s really going to be a day here in the day there, or my employee will do stuff. I’m very proud, actually, of how some of these companies have grown over time, and really improved over time.

ERIC: A couple of my clients are four or five years, and I’ve had a couple that are like a year, maybe two years constant. Then there’s some that they want a week or two weeks to three weeks and that’s all they need. So basically for me, if I enjoy working with them and they enjoy working with me—if they’re paying and not doing anything stupid. The third thing is if I can provide value. If I can’t provide value for them I tell them, “Hey, this work I’m doing, you need it, you want it, but I feel that it’s not the best use of my time and, I don’t think, of your money.” Some clients will say, “Yes, but it’s really important to us,” and I’ll still help them. But sometimes they’ll be like, “Let’s scrap it for this month,” downgrade the amount of time or something.

CHUCK: Alright. Should we talk about proposals now? Work proposals: how do you write these—write them out custom each time, or do you have a template or do you just not prefer to do proposals?

CURTIS: Yes [chuckles].

[Crosstalk 51:55]

REUVEN: Shower money on me without writing anything, but that hasn’t worked out so well.

ERIC: I try not to write them.

[Crosstalk 52:02]

CURTIS: I used to hate sketch, and really streamlined what I put in them, and that has helped exceptionally. I do very similarly to what you’d see in a sales cycle. You describe the problem. Then I talk about my expertise. I talk about my solution. Then I tell them the price, and I end off with a con. I tell them the next steps, like paying me a deposit and sign the contract and then here’s the contract at the end. They can accept it and sign Bidsketch and so we’re done with like that one step in getting their project scheduled.

REUVEN: I don’t have any sort of template. I write project proposals from scratch, maybe because I enjoy writing, maybe because I’m foolish with how I manage of my time. Both might be true. So here’s the thing. I recently just two weeks ago sent in a proposal to a client. I decided to try a radically new approach. In the past I did this standard proposal thing of, “Here’s what you want me to do. Here’s what I’m planning to do. Here’s what I’m going to charge you for it based on the estimated time.”

I’d tried the whole value based proposal sort of thing, very much in the Brennan Dunn style that other people have talked about which is, “This is where you are now. This is why it really, really hurts. This is where you want to go. I’m going to get you there. You’re going to make’—in this particular case I said—‘you currently have a client who has paid you millions of dollars who has told you this product is useless. You want to sell to many more companies. They’re not going to want to buy from you. This is worth millions of dollars to you. Thus,” Then I gave them the pitch for a relatively high priced thing. It felt different.

It felt different. It felt better. It felt like this was really going to connect with them more. Even if it didn’t connect with them more, I felt like this was the style I wanted to use in the future. So I may use this as a template in the future. It was a nice breath of fresh air to try this.

ERIC: It’s a copyrighted technique. Amy Hoy has a good description of it. It is basically for sales pages but you can use it any time you’re selling, trying to persuade. It’s a pain. ‘What pain are you in right now?’—you, meaning the end client. So pain, dream. ‘What would your life be like when that pain was gone?’ So if someone handled the project or your site was performing better or whatever. Then fix, and this is where you describe what you’re going to do to take them from the pain point to the dream. That’s the summary. But I actually do more than that. That’s what I base a lot of my long sales pages for my products, and it works really good.

CHUCK: Yeah. One thing that I do is when I’m doing a proposal or an estimate, I do both. If it’s hourly I’d give them an estimate. I’ll give them the best case and a worst case. Then I usually come somewhere in between and say, “This is what I think it’s going to take.” I’m usually within 5% of what I think it’s going to take to get it done. The other thing that I do is I also sit down with them and I start to figure out, “OK, these are all the things you said you want. These are the things that sound like they’re really important.” So when I give them a proposal or an estimate it’ll be, “This is what I think the minimum that you want or going to need is, and this is what it will cost. This is the next level of what I think you need, and what it will cost.” It’ll work out that way so they get a proposal that matches what they need and then they can decide what they want. Sometimes they come back and they say, “Well we do need the minimum level but we also wanted these couple of features,”—that I threw into the highest tier. Then they can help me reprioritize what they actually want or need, and then work it out that way.

ERIC: Yeah, options are great. I used them all the time when I did proposals. I don’t do proposals anymore. I found that what works really good is I try to send my Master Services Agreement right away mostly because it has an NDA in it and I’d rather use my NDA them their NDA. My NDA work for both sides. It protects me. It protects them. It’s pretty easy, and if they agree to that MSA that’s 90% of the legal stuff right there. I’ll use Statements of Work as proposals. I’ll say, “Hey. Is this what you’re talking about?’ I’ll explain it a certain way, and when they agree to it it’s like, there’s all my contract stuff. It’s done. We just do the deposit or the invoice or whatever. The project’s ready to go. I felt proposals was just another documentation step most clients read and would be like, “We have to change a few things,” and I’d have to write another proposal and send it back to them. It was a dance. After all that than I’d have to send in the contract, and they’d start negotiating on the contract. I just cut that part out. One client recently asked for a proposal so I got a Statement of Work, filled it out, then just changed the title from Statement of Work to Proposal and sent it to them.

CHUCK: [Chuckles] Nice.

REUVEN: Actually, in this proposal I just described I tried three options, and I said, “Option 1 is just, I help you out and fix your problem so your software is not unusable. Option 2 is I do that plus I train your staff to learn how to do what I’m doing. Option 3 is plus we add in some potential remote support over the next year prepaid a year in advance.” This is where I actually got a little smarter on that because the odds of them actually needing 10 hours of help every month for the next year are almost nil. But for them to pay for that sort of peace of mind hopefully was worth it. Where I got a hint that options based proposal is useful, so when the guy emailed me back he said, “Here are some comments. I need you to update the proposal in a few ways. We’re not sure which option we are going to go with yet.” I thought to myself, “Oh my god! This really works!” [Chuckles] If I create it with options, he’s going to feel like he has to choose one of them. On any of them, I win.”

ERIC: Right. As I mentioned before, instead of choosing, “Should I work with you or this other guy or this other guy or this other gal,” it’s ‘How are we going to work with you?’ and reframing the question in their mind. It’s psychological marketing stuff, so it works really good. Even if they are comparing you against competition, it’s, “Is it your option A, option B, option C, or this other person.” You have more options in the lottery if they’re just going random.

CURTIS: Usually the middle option is the one I expect them to get, but the top option adds a lot of profit for often not a lot of work. It seems to work out that way easily. But we’re solving, say that’s that, you finally pushed the, “Here’s all the things you really wanted and here’s two things you dreamed up.” It’s their dream so we can add a lot of profit to fulfill their dream. Yeah. That last option is often over what they expected to pay. So if they expected, say, 20 grand for the whole thing—to get everything they wanted—we can say, “Oh, we can get your dreams for 24,” even if it maybe costs me five or six hours to get their dreams in as well.

ERIC: You would want to play with it, like your low option should be below their price range so that if their budget is a stretch they can always pick the low option. Your middle one should be right around their price range ends, maybe a bit more. The high one should be higher and it’s the idea of, “We told you we could spend 20,000, but hey, for what you’re giving us for 30,000, that’s a great investment. We’ll take it and we’ll pay you an extra 10.”

CHUCK: Alright. This is going to be the last question. How do you divide up your work days in terms of blocks of time? Do you do an 8 hour day, 3-hour sessions? Does it vary a lot?

REUVEN: Poorly, in my case [chuckles]. Actually, one of the things I like about going on site with clients who are doing training is that it structures my day for me. I go. I show up. I do the training or I’m onsite. I work with them. I come home. Then, all I then have to do is my clients who are abroad, or doing the writing of my journal column, or all sorts of other stuff. So I tend to work way more hours than I should and that’s one of the things I’m trying to work toward changing. That’s why I’m telling clients now, “Yes, I bill by the hour, but I do it in blocks of one day.” Then they can order a day from me. Hopefully, over time, that will be the only time during which I work. I’m hoping to move also to a model similar to Curtis’s in that I’ll then have a day or a half day to find—I just want to be Curtis. But I’ll have a day or half day to find where that’s when I have new potential client meetings or phone calls for that sort of stuff. I spoke to someone today who said, “Oh, I can meet on next Monday.” I said, “Yeah. Actually next Monday I can meet. Let’s do it.” But of course now that means I’ve got a hole in the beginning of next Monday that maybe I will or will not be able to fill with other stuff.

ERIC: I think it depends too. When I’m doing weekly stuff—I do Pomodoro Technique all the time. I’ll show you. I have a three by five card each day and so this has some miscellaneous business stuff, but then you can see this big old block with Xs. That’s the client work I’m doing that day. So I’ll set aside from 8 to 10 Pomodoros and try to get as many of them done as I can. Then I have 2 to 4 for myself to do business stuff, marketing, sales, whatever. That works for the good and I don’t have to worry about when I get it done. Like this day I had to get something done first thing. I did my thing first thing and then I did the client work after. Other times I’ll jump right into client work. Do that in the morning to halfway through the afternoon, and then have the afternoon part to myself.

But it just depends. Especially with Pomodoro and other things, I like to block stuff out so I work on one thing, finish it, and move on. That way I don’t have to switch going back and forth. If it’s meetings that aren’t with a client I’m working with, it’s a bear because I have to schedule around it. But if its meetings for a client, those go on the Pomodoro. I put an M instead of an X because like to track how long I’m in calls and all that. But for me, I try to do an 8 hour day. It’s running season so I’m usually doing a lot of running. That chops a half hour an hour off the beginning of my morning. Basically I work from 9-ish to 5. I’d take an hour for lunch or so, depending on how my day’s organized, depending on what I have going. Some days I’ll take off, and if there’s no client work then I might work 4 or 5 hours that day and go take some time off.

CURTIS: Yeah. I’m usually at the office between eight and nine. My wife runs, so if I’m watching the kids so she can go run early. I’ll get out most days between four and four thirty. One day a week I go for exercise later so I take off at like three thirty that day to go a run for a bike ride or something. I don’t do any client work Friday’s. It’s my general schedule. I might answer a couple emails but even that’s optional. I just tell my clients I have the previous engagement that takes all day every Friday. It happens to be with my bike, sometimes the movies, something like that. It’s a business/admin in the morning and then a recharge afternoon, so whatever I feel like recharges me that day which is usually cycling.

[Crosstalk 01:02:14]

REUVEN: Sleep.

CURTIS: Hiking in the mountains but occasionally just sitting at the coffee shop and reading a book or something.

CHUCK: Nice. What I’ve started doing is a couple of things. One is each day I pick the one thing I have to get done that day. So if it’s work a few hours for client, whatever—I actually built myself a little app that I used for that. It was kind of inspired by the episode we did with Kurt Elster where we talked about that, and it’s todayisasuccess.com. On Monday’s one of the first things I do is schedule out the week. So make the list of the things I need to get done this week. Lately I’ve been recording videos for a video series that I’m starting. So I’ll schedule the time I need to do the video on this day. I need to do this video on this date and this time. I do have podcasts to schedule around. I do five podcasts during the week so it keeps me pretty busy. So then I know I’m doing a 10 minute video so I’m thinking that it will take me 2 hours to 3 hours to research, get prepared, get it recorded, do the editing, all of that stuff, and then get it ready to be released. I figure that in. I figure in any client work I need to get done. I figure in any other admin stuff. Then I don’t feel like paperwork, or doing the books, or anything else is going to take over my day because I can timebox it into like 20 minutes.

ERIC: The most important thing is important. That sounds weird. I got the idea from Leo from Zen Habits. I’ll show my little card again. This is today on the side here. You might be able to see it. There’s like a D and two asterisks. Those are my three most important tasks, and D I actually got from Steven Pressfield at Art of War or War of Art, whatever. That’s what one task you have today that you’re afraid of the most? That’s a dragon. I have a dragon on my desk to remind me [chuckles]. It’s the idea of old knights. Like, slay your dragon. Today that’s a podcast because I knew with video we’d have a lot of technical problems and just weird stuff. But it might be sales calls. It might be I have to work with a difficult client. It might be giving a training that I’ve never done, or whatever. It’s not necessarily the most important thing, but it’s the one you have the most anxiety about. I found that plus the other two most important tasks is amazing. I have another piece of paper that says, “Do each day’ and it has have I done my three MITs for today. So far I’ve had a streak of almost two weeks doing that. That’s a great thing to do, and I plan that the morning of or the night before.

CHUCK: What are MITs?

ERIC: Most Important Task. I think there’s a block. I’ll try to find it.

REUVEN: That’s not what I heard MIT stands for, but OK.

CHUCK: I want to see Eric spending his Pomodoro with his dragon and his knight [chuckles].

ERIC: I don’t have a knight. I had a bunch of Legos as a kid, and I think my mom threw them away. I had some really cool knight figures that I would’ve put on the desk next to the dragon because the sizing would’ve been perfect. But, eh, whatever.

CURTIS: All I have is a My Little Pony coloring book for when a kid comes by and needs to color.

ERIC: You could make it slay your little pony, but that sounds kind of weird [chuckles].

REUVEN: I don’t think that will go over so well with the kids. My kids like my whiteboard.

CHUCK: Oh yeah. My kids have glued stuff to my whiteboard. That made me really happy.

REUVEN: Oh my god.

CHUCK: Anyway, so are we doing picks on this one or are we just going to release it?

ERIC: I have picks if we have them.

CHUCK: OK. We can do picks. Eric.

ERIC: The first one is an episode of Startups For the Rest of Us. It probably one of my top three favorite podcasts. Episode 202 – it’s Outbound Sales for Startups with Guest—I’m not going to even try to pronounce his name. It’s about startups and bootstrapping, but the sales advice I think works almost perfectly for consultants. One good takeaway I got out of it was to take a little time. Make a document of common objections that clients have about your service, like you cost too much, you’re remote, and come up with a very well thought out, well-reasoned one or two sentence answer and memorize it or know it. When you’re on a sales call live and they come up with it, “Oh, well, we don’t want to hire you because you’re remote.” You’re like, “Working remote lets me have the best tools that I have at my access, and it also lets us take advantage of time zones. You’re east coast. I can actually watch your servers three hours after you leave work before you get home.” Stuff like that. That was a great show.

My second pick is—this is more for the exercise people—I got something called ‘The Stick’. I’ll just put it back here [chuckles]. It’s extendable. Curtis and I were talking about foam rolling. You use it on your muscles when you get sore. This thing’s amazing. They make a bunch of different sizes but I think if you sit a lot all day, doing this on your legs or wherever gets sore or tense, it might actually help and make you feel a little bit better. I did a session before we started. It took like five minutes and just rolled out my legs, and I’ve been standing this entire time with no pain. It’s a nice little thing and I don’t have to get [crosstalk 01:07:26]

CURTIS: How painful is it, Eric?

ERIC: It’s as painful as you want to make it because it’s bendable. Like look, see? It’s not that bad. You can just roll it.

CURTIS: Rolling is almost always just painful.

ERIC: Because you put all your bodyweight on it.

CURTIS: Yes you are, and it’s a good core workout.

ERIC: Yeah, but I like this just because I can never get balanced on foam rollers. They make mini ones so it might be good for a little bit of exercise. Like I said, I’m stationary most of the time. It might be helpful if your back hurts or your neck hurts.

CHUCK: Yeah. Before the call he said he rolled out his legs and I was like, “OK.” I was thinking deployment or he needed to roll them out before he inflated them [chuckles]. Reuven, what are your picks?

REUVEN: I’ve got two picks for this week. First pick is, I know that Uber gets a huge amount of press, much of it negative. Uber is not used in Israel yet, but there is a local startup that I think has expanded to a few other cities in Europe and the U.S. called GetTaxi. I’ve used it a few times. My wife has used it a few times. It is so addictive to not need to have cash in your pocket, to know when the driver’s showing up, to see them on GPS on a map. So I called for a taxi with GetTaxi. I guess it was about a month or so ago, and the driver—it said he’ll be coming in five minutes, four minutes, ten minutes, eleven minutes. I thought, “That’s kind of funny,” and I watched on the map as I saw him go all the way to another area of town, clearly dropped someone off, and all the way back to me. He came to me and said, “Boy, there was terrible traffic on my way to you.” [Chuckles] It was very nice, that now I had a tool where I could rate him poorly for doing that. So I’ve really been enjoying this app.

The second one is, like Chuck, I’ve put together—a small, one afternoon, one day project. This is to help me learn Chinese.It’s based on Kurt’s visit to us two weeks ago, three weeks ago that we spoke to him. He encouraged us to take ideas and run with them. So if you go to drillchinese.com, you can practice your reading of Chinese characters. If all goes well, I may expand it to other languages as well. But for now this has been fun and for me quite useful. Anyway, that’s it for me for this week.

CHUCK: I still you should’ve called it Fire Drill Chinese [chuckles].

REUVEN: I laughed so hard when I saw that [chuckles].

CHUCK: Alright. Curtis, what are your picks?

CURTIS: I’m going to pick thirteen books that I read last month by Lemony Snicket.

ERIC: Goodbye everybody! [Chuckles]

CURTIS: I read all the Lemony Snicket series last month. They’re pretty simple. They’re early teen fiction books and they are simply fun because sometimes you just need something fun to read.

REUVEN: I thoroughly concur. Those are my favorite book series for kids. I read it twice: the whole series—first to my two girls and then to my son. I think I probably enjoyed it even more than they did even. It was just so much fun.

CURTIS: After the fourth, when they changed it a little bit, I was getting a little tired of fourth one, but I advanced through some reviews and people said ‘They start to tell a longer story arc in the fifth one,” I think it is. Then it’s a longer story arc that carries you through a bunch of things. That made it better. So that’s one of the books that I wanted to read through and see if the kids—you know if I want to read 52 books in a year, I occasionally have to read some simple fiction [chuckles].

REUVEN: You said that Lemony Snicket has a new series out that the first two or three books of it—third one is coming out around now. It’s like hard-boiled detective novels, but for kids, and also super funny—not quite as funny, but still very, very funny. You should search online for Lemony Snicket or Daniel Handler Playing the Accordion For Princes When Doves Cry. That’s definitely, definitely worth watching and listening to [chuckles]. As I now waste the time of all of our listeners [chuckles].

CURTIS: And mine. I’ve got a call in two minutes.

CHUCK: I’ve got a couple of picks. So the first pick is actually related to my phone. Ghost in the Wires. I listen to it on Audible. It is a terrific book. It’s about Kevin Mitnick. He got caught a while back, and now he does security consulting. But it was really, really fascinating to listen to—just all of the phone hacking and computer hacking that he did to get all the stuff that he wanted to get and just his point of view on things and why he did it and all of that stuff. I mean it was super good. I couldn’t put it down.

Another book that really made me think and I really, really enjoyed was Think and Grow Rich by Napoleon Hill. I’m actually considering doing a study group on the book and just getting together on a setup like this on Google Hangouts. I don’t know if I’d publish them because I want people to actually talk about their lives and I don’t want people to worry about saying things that they don’t want public. But it was a very, very inspiring book, and it’s something that I would like to go back and read through again.

The final pick is that I found out that there is a recall on the iPhone 5, and the battery would go dead. So this is a battery case, and if I pull it out—if I would pull it out before, it would actually die within about 10 minutes, even if it was fully charged. So I took it into the Simply Mac store out here and they replaced the battery in 10 minutes. Of course I had to wait in line for about 45 but they replaced the battery in 10 minutes because they had one in stock and it’s been working great ever since. I want to pick Simply Mac because the service was terrific. It wasn’t their fault they had a big long line. Anyway. So those are my picks.

REUVEN: Yeah, and maybe in a week or so I’ll have a pick or an anti-pick of the battery I bought to replace my iPhone’s battery. We’ll see how it goes [chuckles].

CHUCK: Alright. Well, I think I’m going to stop the broadcast. I know we have a few people in the chat so what I’ll probably do is paste the Google Plus Hangout into the chat. That way you guys can join us here for a minute because I’d like to talk to you guys and see how this went, what you thought, what was great, what you thought wasn’t great, and just get a feel for who you are as well. Anyway. There you go.

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