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 on oDesk and blogger of The Freelance Pinoy, a freelancing blog for the Pinoy solo professional.

  • http://caseystrouse.com Casey

    I like to do a balance of fixed-price and hourly jobs on oDesk to give me some guarantee of income for the week. I've not have a problem getting paid on fixed-price gigs because I've done what you said above (evaluated their payment history, etc). I also only bid on jobs with a verified payment method and that have written a clear project spec.

    If a potential client is hesitant to provide job details until after you bid and your bid's accepted run the other way! Often these clients will add heaps of additional tasks to the project once you've committed to it.

  • Bogdi

    I have also only had like 5 fixed-price jobs on oDesk so far, i prefer hourly-based, but I also work outside of oDesk on fixed-price basis. I usually trust my employer, guess it all comes down to the relationship and communication.
    Although most of the times you'll have minimal contact (you won't phisically meet them, just via skype at best) with the employer, you need to be an outgoing person and convince them from the start that you are both a professional and a nice person that will help them.

    • https://www.odesk.com/users/~~85f14e964d609154 Stephanie

      Thanks Bogdi for the comment. You're right, the work relationship and communication play very important roles in the success of a fixed price project. And it's certainly important to show the client that you mean business (re: being professional).

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  • Plamen

    My first, and still the only job at oDesk was "fixed". Some 65$. I've done the job and.. didn't get paid :-)

    Very disappointing!

    • https://www.odesk.com/users/~~85f14e964d609154 Stephanie

      Oh no, that's terrible! Did the client just walk away with the work? I hope the succeeding fixed price contracts you received weren't as bad as this one.

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  • Cartrell

    Hey.

    Useful advice, Stephanie. Thanks.
    I haven't had many fixed projects, especially large ones on oDesk, so my experience here is small. I will keep these in mind.

    -C. out.

    • https://www.odesk.com/users/~~85f14e964d609154 Stephanie

      Hey Cartrell and you're very welcome! I started out with fixed price jobs back in 2009 and so far, I haven't been burned by an employer. But I guess that's because I'm quite paranoid when it comes to collecting payment due. Haha!

      The best of luck on your next fixed price project. ;)

  • http://salmanaslampr.wordpress.com Salman Aslam

    I started my career through a fixed price project i didn't ask for a milestone in the beginning of the contract but i asked it in the middle but my employer even though was pleased with my work never give me a milestone.
    and the agreed budget was $6 but i was paid only $1.98 i know that employer is at full discretion whether to pay or not but it is totally unfair!
    Nowadays I am doing my fourth fixed price contract and
    I thank God for giving me a nice employer he pays what
    he promises and i like that and i want it that way!

    • https://www.odesk.com/users/~~85f14e964d609154 Stephanie

      Hi Salman! I'm glad that you managed to build a strong working relationship with an employer who does not fail to pay you on time and the right amount. It's disheartening whenever an employer or a freelancer fails to stick to the terms of the contract. I hope that with these tips, freelancers will feel more empowered and secure to take on fixed price work.

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  • http://www.contractorscapital.com Kyle Ambrosas

    Fixed-Price is definitely an interesting creature... The issues I run into most are usually solved by having very clear and thorough requirements for a project and also being very honest and upfront about what can and cannot be accomplished from the start.

    • https://www.odesk.com/users/~~85f14e964d609154 Stephanie

      I completely agree Kyle. Communication and honesty upfront are both essential in a fixed price arrangement. Without one or either of the two, there are bound to be problems along the way.