* The Business of Software

A former community discussing the business of software, from the smallest shareware operation to Microsoft. A part of Joel on Software.

We're closed, folks!


» Business of Software FAQ
» The Business of Software Conference (held every fall, usually in Boston)
» Forum guidelines (Please read before posting!)


Andy Brice
Successful Software

Doug Nebeker ("Doug")

Jonathan Matthews
Creator of DeepTrawl, CloudTrawl, and LeapDoc

Nicholas Hebb
BreezeTree Software

Bob Walsh
host, Startup Success Podcast author of The Web Startup Success Guide and Micro-ISV: From Vision To Reality

Patrick McKenzie
Bingo Card Creator

Paying contractors


What is the best/fairest (to company and contractor) way to pay a contractor for a development project?

1. Pay by the hour
2. Pay per feature
3. Agree on a price for the project?
4. ?

Justin Todd Send private email
Tuesday, June 03, 2014
Generally, the contractor will want to be paid by the hour, as then they still get paid when things change or unexpected stuff comes up. The client want certainty, so prefer a fixed cost.

Neither is ideal, so really it is up to who can negotiate best.
Scorpio Send private email
Tuesday, June 03, 2014
Nobody likes to see a project fail, but equally nobody likes not to be paid because somebody somewhere else messed up :-)

9 times out of 10 a project fails because of the organiser (think any number of Gov't contractors in the UK) and not the people doing the actual work.

So, I'd say, pay for time spent. And don't, whatever you do, quibble about it. To you it may be a simple thing (add a user) but, to the person doing the work there could be knock-on effects that are not obvious to the person commissioning the work.

Communication is Key.
Ewan McNab Send private email
Tuesday, June 03, 2014
Thanks for the replies.

I think that we are going to go per sprint/iteration. Agree on a sprint goal and features and pay based on that.
Justin Todd Send private email
Tuesday, June 03, 2014
Hopefully you'll be able to find high quality people who won't think it bothersome to have to renegotiate contracts on a weekly basis.
Scott Send private email
Tuesday, June 03, 2014
I would never work on a contract under those terms.  A contract for me means being employed for a period of time, which may be a number of months, or sometimes a rolling contract. It is then up to the employer to make the best of my time.

I may be able to estimate how long a task may take, but then I cannot take into account all those unknown variables, such as the employer not providing an accurate specification, changing his mind, not providing adequate resources such as hardware or test data, or being forced to use an alien framework or other tools or procedures which make you less productive than you can be.

I once worked with a company to link their in-house application with a well known website using web services, but the software for this well known website was found to be faulty and it took three weeks to get fixed. Should *I* have to pay for those unproductive weeks? Hell NO!
Tony Marston Send private email
Wednesday, June 04, 2014
When I propose to a client I give a fixed fee because I have a solid understanding of how much work is involved and I want to give them the peace of mind of knowing what they're getting into financially in advance.  If they start changing their request I point it out immediately and increase the price (otherwise scope creep it gets out of control fast!)

But when I hire a contractor I offer to pay hourly if I can't 100% articulate everything I'll need in advance, which is usually the case.  I want us to both be comfortable if the request changes.

When I hire a contractor for programming I also try to start off with a small, inexpensive project to see if we work well together.  Once I've been working with someone awhile and our communication is good, I may switch to "How much would you charge to do X?"
Emily Jones Send private email
Thursday, June 05, 2014

This topic is archived. No further replies will be accepted.

Other recent topics Other recent topics
Powered by FogBugz