Big gigs are awesome. A single $30,000 project can give you months of financial stability, a key portfolio piece, and career-launching connections. When managed properly, they can be amazing.
The problem with big contracts is they aren’t flexible. You can change a contract, but it can be difficult, and sometimes impossible. After all, the purpose of a contract is to understand everything that’s in it, set expectations, and come to an agreement. This doesn’t work well with projects because you will never know everything about a project until after it’s done.
The one thing that is always true with every single project I’ve ever done is that something I didn’t expect happened. Something will change in every project you do. Something will not match the expectations you had when the project started. Every. Single. Time. You have to expect this, and be able to be flexible when such things occur.
You Can’t do this if you’ve locked yourself in a gigantic commitment based on your assumptions.
So how do we take something that should be in-flexible, like a contract, and make it work with something that needs to be flexible, like a project? For me, the answer is simple - break a project into smaller pieces.
Big Gig, Small Scopes
Avoid putting the entire project into a single large commitment. Instead, create milestones that set goals of the project. Think of these as “phases” that suggest how far a project has progressed. Take the first phase, write out the scope for it, and create a contract based on that phase. From there, propose the first milestone as the first phase of the project.
This allows you to treat the first phase of the project sort-of like a “discovery phase”, where you will learn a lot about the project, and the customer. This gives you opportunities to pivot and adapt in future phases without making changes to the contract as it stands. After the first phase finishes, take what you learned in phase 1, and create the contract for the next phase of the project. Repeat this process until the project is complete.
This method has many benefits.
It Combats Scope Creep
As you progress through the project, you will discover things that need done, but weren’t considered at the onset of the project. The customer may even come directly to you and ask you to-do something that you did not include in your estimate.
Since you’re not building out the project in a single monolithic contract, you can usually choose to do the requested item in a later phase of the project. This allows you to include this item in the price when quoting out the next phase. I find this to be much better than going back to the customer and asking for more money, or worse, saying “that’s out of scope”. Yuck.
It’s Easier For Either Party to End, or Amend The Relationship
Nobody wants to talk about ending a client relationship, but sometimes it is for the best. You are not the best person for every client, and not everyone is the best for you. This is hard to recognize during the sales process, but will become obvious shortly after getting into a project. It’s much better to discover this with a smaller contract as it is easier to refund, or complete before parting ways.
Sometimes, the relationship doesn’t need to end. Instead, some adjustments need made in-order for things to run smoother. The end of a phase is a great opportunity to reflect on what could improve for the next phase.
It Creates a Comprehensive Timeline For Payment
At DesignFrame, our non-retainer contracts use the same payment schedule - 50% up-front, 25% 30-days later, and 25% due before launch. This ensures that my business gets paid without needing to send follow-up messages to our customers asking for payment. This also ties payment to the work, which makes it a lot easier to manage the expenses associated with the project. In fact, we have never had to involve a legal counsel to get paid - because our payment schedule ensures it happens.
This payment schedule is perfect for 2–3 month long projects, but it’s a poor choice for a project will take longer. The chasm between the second payment and the final payment may create cashflow problems, especially if you’re just getting started.
With a project broken down into phases, the total value of the work would break down into each phase. This means that each phase has its own 50/25/25 payment schedule. You receive less money-up front, but it spreads out over the course of the each phase. This makes the money a little easier to manage. Your customer’s cashflow will appreciate this, as well!
You Can Take a Break In-Between Phases
There’s nothing worse than putting a project on-hold midway through. You lose momentum, and it takes time and effort to pick that momentum back up. There are times in a project where you can mitigate how difficult it will be to resume work. If you break your project into smaller phases, it will be obvious when is a good time to put a project on-hold.
This isn’t just for emergencies, either. If you keep your contracts small, and set proper expectations for the next phase’s timeline, you will have you time to do things that you may have put on hold while focusing on this project.
It Gives You a Chance to Shuffle Resources
I outsource work. A lot. My business spreads a project workload that is traditionally done by 1–2 people to as many as 6 people. This means that, on any given project, there can be as many as 8–10 people involved in a single project! With that many people, it’s not uncommon to swap out someone.
Sometimes a person is a great fit for the job, other times, not so much. Smaller phases work for your vendors much like it works for your customer. It provides clear checkpoints to check-in and see if the person you’re working with is a good fit. If they’re not, and you know that, you can work to replace them in the next phase without needing to worry about any mid-project contract changes.
Firing people is no fun. Especially if you have a good working relationship with the person. No matter your personality, this is one of the hardest things to-do when you’re in a management position. It creates a barrier that will cost your business money, and clients if you allow it.
If things aren’t working with a vendor, you can replace them at the end of the phase instead of firing them mid-project. This removes the “fire a person” barrier because you didn’t take away from your vendor, instead you decided against giving them more. It is easier it is to replace a vendor with a better fit without this barrier.
I always start my projects by estimating how much time they will take to-do. If I find that a project will take more than 50 hours of development time, I try to split the project into phases.
If you break a bigger project into smaller phases, you will give yourself clear mile-markers for a project. This will help you balance your resources, and give you opportunities to come up for air when you need it. This will make you, your customers, and your vendors happier. It keeps your business flexible, and able to adapt to changes. This will keep your stress levels down, improve your relationships with everyone, and create more opportunities for you.