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By David R. Lorentz

Another very interesting session today involved a panel of successful web development entrepreneurs from Canada: Dana DiTomaso, Kendra Gadzala, Nadine Lessio, and Stacey Mulcahy. Much of the tax and business stuff was meaningless to a non-Canadian like me, but there were plenty of gems elsewhere, such as the following:

  • You need a good accountant. This sentence was spoken by the various panelists at least 5 or 6 times. Even if you’re just getting started, you need to get serious and have an accountant. Otherwise you’ll either get burned, or do your taxes all wrong, or end up spending money that isn’t actually yours. Accountants can also give you advice on issues like whether or not to incorporate.
  • How do you know if you have a good accountant? You won’t know, until there’s an accounting crisis. Hmmm.
  • Contracts. Lots of talk about them. The panelists are in the convenient position of drafting up their own contracts, which I guess is the norm for most web development, though for me doing Flash games, my experience is that the contract usually comes in boilerplate form from the client. Either way you can always make changes to the contract. Here are some of their pointers:
    • Pay close attention to the IP—who owns it? Who owns the code? If the client wants the IP or code, make sure you’re charging them extra for it. Otherwise, be clear that you’re keeping it.
    • Add a clause about what your IP and assets can be used for. If you don’t want your art to be seen in print or on T-shirts, for example, make clear that it’s only to be used on the web in the context you delivered it.
    • One thing you must always ask for a deposit up front. First the money, then the work. Based on the relationship you have with the company and how much you trust it, this deposit could be as low as 30-50%, or as high as the full 100%. Always be careful, and don’t work on spec.
    • Add a cancellation clause. If, for example, the project gets cancelled at 90%, but you only got paid up front for 50%, make sure there’s a clause that gets you the extra money you deserve. One way to so this is to specify a cancellation fee, plus the right to invoice for work done.
    • If you need to set up a set of boilerplate contracts for yourself, one great method is to hire a lawyer. Most lawyers can make you a solid contract that meets your requirements for about $500.
  • Although none of the panelists has ever been sued by a client, they all seem vigilant about avoiding it. How do you prevent a client from deciding, a few months after your project is completed, that the work was insufficient and lost them money? One solution is to do a 30 day warranty—call the client back after 30 days and get them to sign a document saying they’re completely happy. Ideally, the client should be signing documents like this at every step of the dev cycle. Another option is “errors and omissions insurance,” which apparently exists in Canada, though it is very expensive.
  • Marketing tips:
    • Don’t pay attention to the competition; do your own thing, and it’ll be exactly what some clients want.
    • The best marketing is word of mouth. So devote a lot of time to client relations and networking.

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