Randy;

One thing I ran into on my first contract was after delivering the project, the owner said: "Who is going to type in the data from the lists"? She suggested I should do this as I wrote the program. I realized I had not addressed how data was to be handled. I told the owner I would type in the data for $95 per hour. The decision was made to use a clerk typist instead. Thereafter, I have always included specific information about data. Each job is a bit different and you should ask every question possible and put it in writing. Remember the companies data is more important than the tool used to create the application.

Depending upon how you like to work, you should at least have a written contract. One approach is to do a needs analysis, provide proposed screen shots and get the client to sign off as each item is approved and date it. Have a clause that states what you will deliver and when (proposal, needs analysis, screen shots, prototype, etc.), payment at each stage, and any additions to the written agreement will be done at a rate of $XX per hour. Watch out for scope creep (gee, how about adding these bells and whistles while you are at it). Users always dream up new requirements along the way.

You may wish to consider payment up front of a percentage of the proposal. Most companies have budgets and will demand a fixed bid, while others (not many perhaps) will pay by the hour. Be careful about any estimates. Always require payment as each milestone is attained and have an agreement about timeliness of payment. When you submit an invoice you should be paid within a defined period that is understood and agreeable to both parties.

Whil Hentzen covered this subject in several of his books and has given talks on the subject, which are very insightful. In one of Whil's discussions an approach to a fixed bid was given. Ask to create the needs analysis and screen shots and be paid by the hour. Take the amount paid for the above and multiply by five, which becomes your fix bid amount for the project, minus the work already delivered. If they agree, you have the needs analysis and User Interface completed and now have to create the business rules, etc. If they refuse the bid, you have still been paid for the up front work.

Best of luck.

Tom