client advice
Out of context: Reply #3
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- noneck0
It's partly taxes, but for me it's more about how to think about the deal. You're not really doing a job for $500 + some nifty sweaters. You're doing the job for $2500 and then buying $2000 of sweaters from the client (even if only $500 changes hands). Maybe it's the same to you, but to me they're totally different deals, and would change how I negotiate the deal.
I'm assuming that the client told you that their budget is $500. The way I would do it is to sit down with the client, provide an estimate for $2500 and let them know that this is the least you can do the project for, BUT if they're up to it you'd be willing to barter the remaining $2000. If they agree, I'd do up a short letter of agreement that states that you'll receive 200 knitted sweaters from the client in consideration for $2000 towards the project, and that the balance of the transaction will be paid in real money. Have them sign both the estimate and the agreement.
You need to both agree that the total project value is $2500, that's your estimate. Then you're both agreeing that you'll accept 200 sweaters from them as though it were $2000. This limits you're exposure should things go to shit.
Lets say the project does go to shit.
If the project has cost overruns, you probably want any overruns to be paid in cash, not knitted sweaters. Because you've limited yourself to accepting 200 sweaters as $2000, and the balance to be in dollars, there won't be any question as to how the overrun will be paid.
Also, if the client can't produce 200 sweaters as agreed, they don't get to provide you with 800 mittens instead. And because everyone agreed that the project cost is $2500, there won't be any disagreement as to how much you should be paid.
Always be clear about the transaction. You're doing a $2500 project, not a $500 + 200 knitted sweaters project.