The Way We Work
October 31, 2011 by Stephanie Gonzaga

Projects aren’t always billed by the hour. An employer may want to pay on a per-project basis instead, to closely manage the budget. He may also want to test his potential hires first by letting them do a small paid test job.

Unfortunately, the fixed price model is often misunderstood and abused, and the last thing you need is a dispute for unpaid work, so let’s take a look at tips for contractors working on a fixed price project:

  • feedbackEvaluate the employer’s background on oDesk. I encourage contractors to make a habit of looking at the employer’s feedback and payment history before agreeing to do a fixed price project. If the employer is a regular oDesk user, read the feedback ratings of past contractors. If his profile is still fresh, make sure to discuss all the details with him during the interview before saying “yes.”
  • Make accurate project estimates. There’s less flexibility in the fixed-price setting, so take into consideration every aspect of the project before agreeing on a price and timeline. If it is necessary, don’t be afraid to go over the employer’s budget a little or extending the deadline so long as you agree on these things as you go, and ultimately deliver a great product. Top quality work is much better than a poorly done rush job.
  • Ask for payment up front. Seasoned freelancers know how important it is that they’re paid for their work, so securing an upfront payment isn’t a mere option for them. You can ask for a 30% to 50% upfront payment at the beginning of the project. Once the deliverable is ready and handed over, you can then request for the remaining balance.
  • project and payment milestoneBreak the project (and payments) down into milestones. Make things easy for your employer by breaking the project and the payments into pieces or milestones. Once a milestone is finished and the employer sends partial payment, you can move on to the next milestone.
  • Communicate often. There is a large brick wall between you and your employer, so communication must be strong and transparent. Send work progress reports to let him know how the project is doing, or hold weekly or monthly meetings to discuss about more in-depth details.
  • Establish trust through honesty and reliability. For example, set an ideal deadline for your employer’s project and follow that deadline. Follow your employer’s instructions, take note of his feedback of your work, and never do anything to break his trust in you. This means never running away with the project, his budget, and lying about your shortcomings. Trust me, employers appreciate and value complete honesty.

Although protecting yourself is important when working on a fixed price project, your first priority should be establishing a higher level of trust between you and the employer.

Show your employer that you can are a true professional and you mean business by being honest, transparent, and reliable. Your employer will then respect and trust you to want to pay your professional fees upfront and hire you for another project in the future.

Every contractor handles fixed price projects differently, so I’d love to hear what your strategies are when working fixed price. Do you ask for upfront payment, or trust your employers completely? Share your experience in the comments below!

Stephanie Gonzaga

Freelancer, Blogger, and Creative Writer

Stephanie Gonzaga is a freelancer and blogger of The Freelance Pinoy, a freelancing blog for the Pinoy solo professional.