Lesson 1: Get Paid Weekly!
In the world of W2’s, employees and slacks, people work and then get compensated for their time and effort. Sound pretty simply right? Well somehow this concept gets lost in translation somewhere between the W2 world and the world of 1099’s. Today we’re going to help make sure you get paid weekly and explain why it’s advantageous to both the contractor and the contractee.
Many times businesses fail to pay one another. There are many reasons for this, sometimes the funds are not readily available, other times it is a direct refusal to pay for service. In any case, it’s best for both parties to limit the amount of outstanding hours worked on any project.
For One Time Projects:
Use Milestones – Milestones are a great way to break down a large project into sections, at the end of which payments can be demanded.
For example: You are doing a large web project for a business, and you’ve both already agreed to a price quote. Break the project down into 2-4 milestones which, when achieved, a portion of the total quote is paid.
Most milestones can be broken down into 40 hours of work. So you will always get paid weekly if you do this correctly. This makes the client happy as they are able to see progress on their project, and now you can buy bread!
For On-going Contracting Work:
Ongoing contracted work is less common, but it’s easy to rack up a lot of unpaid hours when doing so. It’s also more difficult to agree upon a contract since there are not as many specifics to write into it. So here’s what you do:
Write into the contract to get paid weekly or bi-weekly
This will save both contractor and contractee a headache in the long run. If the contractee refuses to pay you, fine then. Walk away and you’ve only lost out on a weeks worth of pay. This might sound like a lot, but when you’ve experienced a refusal of payment for 120 hours of work already logged, you will understand.
Not only is your bank account empty, you now have to go to court to recover the funds. 40 hours of work is much easier to walk away from and easier to recover.
Both parties benefit when you get paid weekly. This lowers room for discrepancies and limits the time you will spend in the courtroom. And trust us who have experience recovering funds in court, it is not fun. Not only is it the polar opposite of fun, it takes up valuable time which could be spent working. So hit the easy button and get paid weekly.
That is all for today. I hope anyone reading this takes these valuable lessons home and uses them. We have learned the hard way, and hope to prevent you from having to experience the same mistakes.
Have a great day!