What's your process for managing clients?

I'm new to the forums and relatively new to freelancing. From my experience so far, I'm finding the hardest part is managing leads / clients. Do you have a successful process for client management that you can share?

This has been my process (more or less) so far:

1. Make first contact with a lead
2. Send portfolio of items that relate to the potential project (I'm a PHP developer, so I send links to websites and sample code if requested)
3. Discuss project objective with lead via phone / email
4. Send a proposal by email - usually hacked from a Word template that I've used for another client
5. Follow up with the lead to answer questions / confirm their interest
6. Send a PDF contract for them to sign and return
7. Collect deposit if agreed upon
8. Begin work on project - very little communication happens during the work phase
9. If it's an hourly project, jot hours down on a timesheet and send invoices (another Word template) periodically
10. Send URL of work-in-progress to client for review
11. Follow up with client, get signoff
12. Install project on client's server
13. Send final bill and wait patiently for a check

These are the issues that I'm facing:

1. I feel extremely disorganized. Each time I share a portfolio, I gather resources to send and it seems like I'm doing duplicate work. For proposals / contracts, editing Word documents seem kludgy at best. Communication with the client is spread across many emails (and phone calls that aren't even tracked).

2. Clients change their minds. It's a problem with scope as well as flip-flopping on features. Then I need to dig up an old email to "prove" to them that they originally asked for "A", not "B".

3. Need to drag clients through the process. I'm often waiting for feedback from a client that puts development on hold. And getting them to pay for work that is already done can be like pulling teeth.

4. Lack of transparency for the client. While I'm working on the project, it would be helpful if the client knew what was going on. I think part of the reason that they drag their feet is because they don't realize all the work that I put into their project.

Any insights are appreciated. Do you deal with the same issues? Have you mastered a process that works for you?

Also, is there any software that will help manage the whole process? I know there are tools for certain aspects, like Basecamp or Freshbooks, but I'm wondering if there's an overall magic bullet that takes care of everything?

Thanks!

- Joe

I don't have a set process, I just keep the business cards of potential leads or flag their emails as important and schedule follow ups in an appropriate timeframe. I'm quite public with my portfolio, what kind of marketing is it to only show past works on request? If you don't have a website portfolio you really need to get one. Once I get the client I'm as flexible as they permit, if they always pay on time and don't play games I'll often be equally easy to work with (these clients are rare). If they try to act all "big corporation" or they like to play payment games I do everything by the book. In general we get a contract together, I do the work and keep them updated often, they review the work, I modify (repeat as necessary) and finally we finish. As long as clients understand they are paying for your time this goes pretty smoothly.

To address the problems one by one:

1. If you use a webmail interface switch to Outlook or an equivalent program (such as Thunderbird). I use Outlook for all my emails and it makes my life many times easier. I generally categorize emails by project, even if with the same client. I don't keep great track of leads since most fall though in a short time-frame anyways; I just keep notes in my calender to follow up. Phone calls are virtually impossible to track, it is sometimes illegal to record phone calls without informing them first so that presents a difficulty of its own. While communication over the phone is quick I always request to get things in writing before they are considered confirmed (I usually say "I'm gonna forget at least one detail of this, can we get this via email sometime today so we can have a hard copy?"), I've never been told no.

2. Have an exact description of the project in writing with their signature on it. Have a clause after it saying that there it is understood that there are no features implied, inferred or agreed upon outside of that description which will be part of the estimate. If they are the type of client who plays games go by the book, get even small changes in writing. Clients generally loose the attitude of "this is what I asked for but not what I want" when they sign it.

3. This falls into three issues, communication, billing and enforcement.

Communication
They have to get back to you promptly. Have a provision in your contract that puts them in breach if they go 7 days without getting back to you. If things keep holding them up advise them to come back when they have things in order. If they drag things out and aren't willing to stop finish the contract and don't do more work for them.

Billing
This is the hardest one, clients love to drag this one out. The biggest pitfall is to pay in milestones, they are usually poorly defined goals that get switched around. Other than the upfront and the final payment always bill on the 1st and 15th of each month, have all invoices be due in 7 days (have the upfront count as credit towards the first payment). If they don't pay within 7 days you stop working, give them seven more days before they are considered in breach. As with everything else make sure to specify it in writing.

Enforcement
At some point it might happen, the client has the work on their server and decides that paying a few thousand to you for it just isn't necessary. If the contract is in writing there are things you can do from a legal perspective, small claims court is a great way to go if they simply will not pay you (and you are both in the US -- I'm sure other countries have equivalents). Also under US law it constitutes theft to do that, its like writing a bad check at the store. If all else fails file a complaint at the attorneys office and things could go criminal.

In any case legal options are time consuming and costly. A simpler method for PHP programmers is to encode one of the mandatory class files via ioncube and have it execute die() after a certain date (usually a week or so after the expected end date of the project). Replace it for the normal source one after they pay.

4. Sounds like you quote per project, I used to do that but never do anymore. Always bill by the hour and give estimates. You are a consultant providing a service, not a vendor providing a product. I have written about this is great detail here.

Finally if you get a bad feeling about a client don't take the project. If they seem unprofessional or at an early point look like they are going to be trouble just move on.

Thanks for sharing this information. I have a question. Is there any solution if out of country client cheat with you and after sending the bill they didn't pay. Any law?

The short answer is yes, but it's probably not enforceable without specific language in your contract.

And it's both time consuming and expensive so it might not be worthwhile to pursue unless you're owed the equivalent of thousands of dollars.

If non payment is a regular problem, you might consider:
1) asking clients to demonstrate that they have escrowed funds (i.e., put aside the money to pay you) before you'll start.
2)analyzing the ways you're acquiring clients. If you're attracting more than your share of deadbeats then maybe you're looking for work in the wrong places?

Thanks Village Genius! Your comprehensive response is very helpful.

I guess I may not be as organized as you - I hope that's not a deal breaker for freelancing

- It sounds like you generally rely on 1) good clients and / or 2) getting everything in writing and enforcing your terms when needed. I find the idea of policing my clients overwhelming. I'm wondering if others feel the same way? Or are successful freelancers the ones that embrace that side of the business?

- Do you find that your client's level of organization makes a difference to your process? I.e. if you work with a disorganized client do you find yourself doing more client management? Do you stay away from those types of clients?

- What percentage of your time is management (communication, billing, etc) vs. project work?

- Regarding fixed cost vs. hourly, I read your post against quotes and it makes a lot of sense. I actually started off exclusively as hourly, but recently moved to fixed cost as I thought it was a wise marketing tool. Also, it seems that other companies in my neighborhood are quoting fixed costs, so I figured I needed to compete on that basis.

I don't have a set process as client's needs are different from each other. What I do have is a schedule, what needs to be done for the week, who to update, billed and other stuff. This works fine for me.

Originally Posted by jmyers5678 I guess I may not be as organized as you - I hope that's not a deal breaker for freelancing

Everyone has their own system, you only need as much as it takes you to keep things in line.

Originally Posted by jmyers5678 - It sounds like you generally rely on 1) good clients and / or 2) getting everything in writing and enforcing your terms when needed. I find the idea of policing my clients overwhelming.

I've never had to actually do work to enforce them, clients take signed stuff very seriously since any legal action is a lot of trouble for them as well.

Originally Posted by jmyers5678 I'm wondering if others feel the same way? Or are successful freelancers the ones that embrace that side of the business?

Embrace is a bad word for it, its just something you have to do in business. I'd love if we didn't have to do anything in writing but that just isn't reality.

Originally Posted by jmyers5678 - Do you find that your client's level of organization makes a difference to your process? I.e. if you work with a disorganized client do you find yourself doing more client management? Do you stay away from those types of clients?

The more disorganized they get the harder it can be, but as long as they can get things in line on time its all good. If they are so disorganized that they are always late with payments and it takes them forever to get back to you you bet I'm staying away from them.

Originally Posted by jmyers5678 - What percentage of your time is management (communication, billing, etc) vs. project work?

I can't give a flat percentage as it varies from project to project and client to client. Communications happen at random times, either when I need to talk to my client or he gives me a call. Billing is fairly simple -- I use Quickbooks.

Originally Posted by jmyers5678 - Regarding fixed cost vs. hourly, I read your post against quotes and it makes a lot of sense. I actually started off exclusively as hourly, but recently moved to fixed cost as I thought it was a wise marketing tool. Also, it seems that other companies in my neighborhood are quoting fixed costs, so I figured I needed to compete on that basis.

I've never seen a non-online consultant charge by the project, it's exclusively the domain of cheap online coders (99% of the time they are outsourcers). If potential clients consider them real competition to you its time to move on because if they choose you they will expect your quality with their price regardless of what you charge. Be ready to lose a lot of leads to this one but I assure you its worth it because they aren't worth taking on.

On the other hand. . .

In the universe of all independent workers ("Freelancers" or solo entrepreneurs) the standard calculation of billable time to administration, marketing, etc. is about 1:2 or 3 for early stage startup, shifting slowly to about 2:1 for a well-run, mature business.

Yes, that means it's not unusual to spend one hour earning money for every 3 or 4 you work, at the beginning. This is why people often advise that you start your freelance practice while you have some other income stream.

You can do better if you have employees or outsource certain tasks, but probably not much. (The expectation in big businesses is that if an employee is onsite for 8 hours, on a good day 4.5 of that will be billable time or its equivalent.)

And

The decision to bill per project or per hour (or any other way) is a fairly personal one--depends on your tolerance for risk, where you see that risk and how good you are at telling a client "sorry, that's not in the contract." there are other ways to protect yourself.

It also depends on what you do. VG notes that only online consultants charge by project but I assume he's talking about the work he does. Project-based pricing is typical among writers, graphic artists (esp. those who sub in to agencies) and others.

I'd say. . .if you're serious about keeping your business going, figure out your business model and choose a pricing system that reflects that.

Originally Posted by Lowengard It also depends on what you do. VG notes that only online consultants charge by project but I assume he's talking about the work he does. Project-based pricing is typical among writers, graphic artists (esp. those who sub in to agencies) and others.

I should have been more clear, I am only talking about programmers.