From the field: On Josh's Rules (of Database Contracting)

Josh Berkus wrote an excellent bullet point list of things to do and not do when doing Database Contracting. I would like to expand on that list and add some comments to a couple of his points:

  1. Data Reflects the Business: show me a client with a chronic database problem, and I'll show you a client with a chronic management problem. Generally I would agree with this statement but remember, that is why they called you. A lot of times it isn't a chronic management problem, but a chronic ignorance problem which I would classify as different.
  2. Bad Clients Will Destroy Your Business: half of your success will be built on the ability of recognizing bad clients and avoiding them or terminating their contracts before they suck away all of your time and resources. Always be able to walk away. Hands down a winner on this one. Remember that the relationship is this: Vendor<->Client It is not: Vendor->Client Keep expectations clear.
The following are my additions:
  • Get a retainer. If your client isn't willing to pay a little upfront then walk away. There are exceptions of course, specifically Government entities and or large corporations. If you run into that, then make sure you get a purchase order.
  • Charge interest. Require due on receipt invoices, Net-10 for qualified (customers you do business with a lot), anything and I mean anything over Net-30 is charged interest. You are not a bank. Don't let customers treat you like one.
  • Eliminate paper. Don't send out paper invoices. It takes too much time (not to mention paper, envelopes and stamps) and time is money. Use PDF to email or fax.
  • Explore payment options. Get a merchant account and accept e-checks. It is generally cheaper to take the 2.25% hit on a Visa charge than to wait for payment (see retainer above). If you do E-checks do *not* allow your merchant to take a percentage. There are plenty of services that charge a flat fee from .30 to .75 cents. The more convenient you make paying you, the faster you will be paid.
  • Kill your cell phone. I can hear the wails of discontent on this one but I am serious. Clients do not need your cell phone number. Not even if they pay you twice what you normally get per hour. Get an answering service and the answering service gets your cell phone.
  • At 5:01pm, your rates go time and a half. O.k., this one is variable based on your lifestyle but remember that your time is your time. If they are going to call you at 10:00pm, they should pay for the fact that they are calling you outside of normal hours.