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SappyQ · Aug 6, 2003, 11:21 AM

I've been given the opportunity to design a website from the bottom up. It would be my first website. It would involve a 6 mos. design phase and launch after the 6 mos. I would be doing the Web Architecture, Interaction and Interface design as well as the look and feel and co. identity...

The catch...they can't pay me until they start making some revenues, but promise that they will double the amount I bill them to take the risk. I'm charging $15,000 for about 200hrs. I'm also going to request an intial payment of $800 as a retainer fee and to cover any production costs. I've also developed the AIGA contract which states the total payment should be recieved within 1 year from the launch date...

They haven't seen the contract yet, and may not agree to it because there is no gaurantee how quickly the service will sell.. If that's the case is this too much of a risk, or I'm I lacking faith because of today's terrible financial market. I have a full time job already... any opinions greatly appreciated!

Sappy Q

cowerd · Aug 6, 2003, 11:48 AM

Dude, you're basically investing $14,200 in their company, for a $30000 return. When you look at it that way would you do the job?

What's their business plan?
What round of VC funding are they in?
What is their track record?

If you don't know any of these things I suggest you find out.

EnVoy · Aug 6, 2003, 12:02 PM

Do not do anything without a signed contract!!! This not paying until they make money sounds fishy, I wouldn't go for it. It usually means "we are going to drag this on and on and never pay you". And paying you double, ya right!

If you have to do it, forget the double pay thing and just bill them 30K up front. Also demand 25% up front, and another 25% kill fee, since you are taking a risk of not getting payed. After 6mos of you hard work, you could end up with squat when you find out the company goes belly up.

Be professional, and expect to be paid like a professional. If I were you, I would invest the 6 months in finding clients who can actually pay you.

SappyQ · Aug 6, 2003, 12:06 PM

Thanks Cowerd.

Very Good Points... Thanks for the perspective.. Those are three things that really bother me... There is no business plan, I don't know what VC Round means, and this is a first time for this company....if you could call it a company yet. It's a guy I used to work with, so it's more of a casual friends helping friends situation, but that doesn't mean I can't get screwed.

It is a risky situation... Good experience as my first website project but is it really worth the 200hrs. I'd be putting in?.

OptimusG4 · Aug 6, 2003, 12:58 PM

Is this your first website ever? Or just first site for commercial purposes? To be honest, I wouldn't invest that much time into something like that. Work on small projects and build up. For example, a company I wanted to do a site for contacted me about a project. I had no idea what to charge, so I sent a proposal, with an estimate of $1000 (it was a basic makeover of the site, no database or anything). Even that was too much for them, plus I didn't have much of a portfolio. Fast forward to 1 year later, today, and I have a few sites under my belt, which I'm thankful for so I can do big projects like yours.

My main point is that if you charge too much without a portfolio, they might just laugh it off. If not, it could be a scam for them to just get a site up and promote them.

cowerd · Aug 6, 2003, 01:45 PM

There is no business plan

No bank will talk to you without a business plan. No business plan means they also don't have any venture capital investors as they would have hired someone to writeup a business plan.

This sounds very half-assed.

Powaqqatsi · Aug 6, 2003, 04:50 PM

$15000 for 200hours ???

SappyQ · Aug 7, 2003, 11:18 AM

I'm about to post an email to tell these people that I can't take that kind of risk in my career, especially without a business plan and signed agreement of the payment schedule I requested.

Yes it would have been me very first website, which was making me a little more openminded to the risk, however it is not my first design project and I know I'm good and these people would have an awesome site. I would hate to have done all that for nothing.

If it did work out and I got paid even the 15,000 that would have been worth it, but without the promise, it's not.

Thanks again for your professional advice, it has given me the push I needed to make the write business decision.

Yours Truly,

Sappy Q

mitchell_pgh · Aug 7, 2003, 02:48 PM

This is a tricky situation. In one breath you are saying that there are contracts and deadlines involved and in another breath you say it's between friends. Which is it?

If it's friends, I think 200 hours over a half year (6 month design phase) or app. 24 months isn't all that bad considering it's less then 10 hours a week. The $800 payment is nothing for a real designer, but if it's friends, it's a bunch of money considering they probably don't have much cash for such a project.

If it's a friendly business, I would charge a $1500 retainer (or more) and charge a monthly "fee" so that you make something for your time... even if it's minimum wage. If the deal folds, you walk away with something other then a few guys you once called friends.

200 hours @ $75 per hour = $15,000 (makes sense to me)

MY QUESTIONS
- Is it a:

REAL SERVICE OR PRODUCT
Something like lawn care service, cooking service, bike sales, etc. etc.

or is it

A DIGITAL SERVICE
Developing film online, digitizing something etc.?

That would make all the difference in the world!!! Real businesses will do well with nice online advertising, but new eBiz companies are dying...

art_director · Aug 7, 2003, 03:38 PM

i've seen this scenario a hundred times. take that project and you won't get paid a fare rate. i guarantee it.

as for the $14,200 investment, well, you're a designer, not an investor.

SappyQ · Aug 7, 2003, 10:32 PM

Thanks All, My client / friend has agreed to look for the funding to insure my payment along with the payment schedule...a deadline of one year from the launch of the site...march. 2004. It's an international dating service...that's all I can say. Sounds like a great opp. I will not be starting any projects without the signature of that wonderful AIGA contract I proposed... Thank god for AIGA. They have saved my ass more than once. Wish me luck. I'll keep you all posted if your curious...

SappyQ