[thelist] Ongoing maintenance contracts was: Sub Contract Work

martin.p.burns at uk.pwcglobal.com martin.p.burns at uk.pwcglobal.com
Fri Oct 19 08:47:42 CDT 2001


Memo from Martin P Burns of PricewaterhouseCoopers

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Hi Don

I have the same kind of outlook - I need the variety, which is why
I do the job I do.

But when you're freelancing or running your own company,
maintenance contracts are very much worthwhile, particularly
in difficult economic times.

Here's why:

To keep running, you need money every single month, just
to keep afloat. Short-term contracts are great because they
provide relatively high-value bursts of cash, but they're not
guaranteed.

Maintenance contracts, on the other hand, boost your bank account
every month, making sure you pay your power, your phone, your
connectivity and of course your salary.

As an example: When I was freelancing, I charged UKP40 an hour (cheap,
I know), but only worked 5 hours a week. When I moved to a contracting
role, my rate went down to UKP20 an hour, but I was guaranteed 37.5 hours
each and every week - my net income went through the roof.

Look at it this way:
For a 1-off contract, the value of a client might be $10k, all accrued
over 6 months.

For your next $10k, you've got to do all the sales work - find the people
who need your skills, contact them, pursuade them that your skills meet
their needs, negotiate contracts and on and on and on.

With a $10k contract with a sell-on maintenance contract of $1k per month,
for about the same amount of non-fee-earning work, you've got a year-1
value of $16k, and a lifetime value (assuming you keep them for 5 years)
of $54k.

The other advantage is that you're then the incumbent agency, so when
they need *another* $10k web project, your name and skills are already in
front
of them - why do they need to go to the hassle of selecting a design vendor
when they've got your contact number right in front of them, and you're
proving
your skills every single month?

Absolutely the best way to maximise your income is to develop long-term
relationships with clients, and look for every single appropriate sell-on
opportunity you can.

Cheers
Martin



Please respond to thelist at lists.evolt.org

Sent by:  thelist-admin at lists.evolt.org

To:   "'thelist at lists.evolt.org'" <thelist at lists.evolt.org>
Subject:  RE: [thelist] Sub Contract Work

All this hypothetical stuff and legalese is nice to talk about, but from my
personal experience I prefer just handing the site over to the client when
I
am done.

Why?

Mainly because I like to wash my hands of a project and move to the next
one. This way they won't keep bugging me for upgrades and modifications
just
because I maintained some sort of "right" over the work. If I have treated
the customer right they will come back to me with future modifications
anyways. It is much better to have a client "want" to pay you money as
opposed to making them feel "obligated" because of some legal mumbo-jumbo.
It goes back to the old Biblical saying "All things are lawful, but not all
things are advantageous." - which basically means, "Yeah, TECHNICALLY I
have
every right to be an arsehole and create a myriad of loopholes in the
contract, but it may end up HURTING me in the long run (or cause a tidal
wave of time-consuming paperwork - which is just about as evil!)."

Of course if it is something completely proprietary, then the rule of thumb
is to clearly define who has the right to the work when it is completed.
Sure, you can draft funky, verbose EULA agreements and crap like that, but
why? Most of the developers I know on this list 1)rarely have time to keep
up with all that legal junk, and 2)are not large enough to be able to hire
an attorney to handle all of that. So make it clear who gets what.




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