How many milestones do you set on your fixed price projects?

[Garnor M]

In our new client webinars each week, we advise clients to set milestones and use Escrow. One of my regular comments is, "we almost always advise more than one milestone." This probably doesn't make as much sense for lower priced projects, but for most projects it does help freelancers and clients better manage payments and workflow. 

One example I like to use for sequencing milestones is a logo design project.:

Milestone 1: rough sketch of the logo

Milestone 2: first draft of the logo in image file format (after 2 rounds of edits)

Milestone 3: second draft of the logo in color and black/white (after 2 rounds of edits)

Milestone 4: final image files in 2 different sizes, in color and black/white (after another edit round)

This is just one example. I'm curious to see your typical milestone calendar for the fixed price work you do. Do you regularly have the same number of milestones on your project? If so, what are the common project checkpoints you're using to dictate these dates/amounts? Share as much detail as you'd like. We'd love to get some examples of how milestones are used for different types of work, e.g. Design, Writing, Tech development, etc.

Thanks in advance!

[Ivan S]

Garnor, I my field (financial modelling and financial advisory) setting up milestones does not really make much sense - the client needs a very specific outcome (a model or valuation or advice) so half-baked solutions would just not cut it. The only time when proposed to the client to use milestones was when I was doing financial analysis of 6 or 7 different companies, so I've set up a milestones for each of those. 

Actually, the same is true with your example - if I would ask a logo to be developed, I would need just the final product, and not "second draft of the logo in the image file format", which I would not be able to use anywhere. 

[Douglas Michael M]

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@Ivan S wrote:

Actually, the same is true with your example - if I would ask a logo to be developed, I would need just the final product, and not "second draft of the logo in the image file format", which I would not be able to use anywhere. 

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You might not, Ivan,

Presumably you have not also read the hundreds or thousands of horror stories about clients who want to endlessly tweak designs. I have no knowledge of the specifics of Garnor's scenario. I know either changing direction or cutting one's losses is less painful after 10 hours of work than after 30.

Best,

Michael

[Adolfo N]

ok ... as soon as possible i will fix it that but depending upon by the agreement of my price . just name my price

[Julianne G]

So glad you asked! 

First, this is super interesting because this is directed at how the client should set a milestone.  But clients shoudln't be setting milestones. It doesn't work that way in any field that I can think of.  Throughout history, Contractors, business, and freelancers are the ones who dictate payment terms--not customers.  When I go to a restaurant, the restaurant decides if I need to pay upfront or after.  If I hire a plumber, he tells me if I need to pay upfront for materials and after for labor, or some other configuration.  They may even have different "milestones" depending on who the client is (corporate vs. individual).

Now, the client/customer doesn't need to accept the terms, but nowhere does it make sense to burden the customer with having to submit an answer to a question they can't possibly answer in order for the job to continue.  They do not know my business model.  They don't and can't know how I work, what my financial systems/requirements are.  And the poor client/customer is administratively burdened with a task he/she cannot possibly determine on their own.  

Which is why you asked us...

So, that complaint raised:

If the client is required to do anything midway to approve any part of the project, I absolutely (on Elance) create more than one milestone.  Although it may take me 24 to edit a manuscript, it often takes a client weeks or even months to review it.  Using a single milestone is very problematic because some customers/clients are busy and have other priorities.  So if I have an edit, followed by client review and then a final proof, there would be one milestone for each of my submissions, so that payment could be released for the work done up until the client has the ball.  That way I'm not left hanging and am not subject to their timeframes.  Yes, experience has taught me never to put that in the client's hands.

If it is a job that is a single step, unless it spans multiple weeks (which is rare), I use a single milestone, because it's easier.  

[Douglas Michael M]

Nicely summarized, Julianne!

Sidebar: One bonus advantage of the milestone scheme on An Upwork Company is the ability to set $0 milestones for clients (approval dates and so on). That builds protection into my schedule and workflow against being blamed for client process delays.

Ah, but that was yesterday, and yesterday's gone...

Thanks and best,
Michael

[Jennifer M]

I guess it depends. In writing, I don't like milestones because people tend to want to fund only the draft and then they fund 50% of the project. I then have to tell them that the whole project must be funded. There's just less back and forth and contention with 1 lump sum.

[Douglas Michael M]

Quick and dirty, Garnor:

A milestone should be an agreeable deliverable at an agreed-upon price. How big and how many they are will depend on the scope and nature of the project.

Best,
Michael

p.s. Let contractors set milestones...Let contractors set milestones...You are getting sleepy...Let contractors set milestones...

[Garnor M]

Thanks Michael and others. We hear you, and we're evaluating the request for freelancers to set milestones as well as clients.

Though clients may be finalizing the milestones in the contract terms, most freelancers will recommend these during the negotiation process or come to a decision on these together with their clients. That's what we're asking about here. How do you decide (not necessarily who documents) on these based on the types of projects you work on?

Thanks for sharing this insight and helping keep the discussion on topic.

[Douglas Michael M]

Garnor,

Thanks for responding to the diversion. That's good news.

Yes, this is the sort of thing that gets worked out in negotiation/correspondence. And that's true whoever sets the milestones.

To expand on my quick and dirty answer, here's how a current contract is working out.

• Client invites me to apply. Prior to an intial phone conversation, client sends sample materials. This gives me an overview of the total contract deliverable, and a basis for proposing a price.
• In a second conversation, client suggests doing about a third of the job (two training modules) as a paid test. This becomes our first milestone.
• A nominal two-thirds of the milestone (one of two modules) comes in a third again longer than the word count specified for both modules. I deliver that and ask for confirmation that I'm not inflating the word count (and thus that the job was underspec'ed). I make clear that I will honor my commitment to deliver the second module (even if that means taking a serious rate hit).
• The client agrees that the specified word count was too low, and that he will consider the first milestone completed by delivery of the first module. He sets up a second milestone for the remaining test module, at a price proportionate to its scope.
• After successful completion of the second milestone, the client and I both have a better idea of how to proceed. We stick to the original format of two-module milestones, adjusting word count, deadlines and cost to match what we learned from the (extended) test: About a thousand words per module, and $500 per milestone (module pair).

I hope that degree of detail helps. The overall point:

• Setting milestones, particularly with a new client, is often a dynamic process.
• That dynamic starts with what the client considers a deliverable (to use Julianne's examples, does the buyer enter the restaurant alone or with a party? for a quick bite, or for a multi-course meal? Does s/he want an emergency plumbing repair, or a bathroom remodel some time before Christmas?).
• The actual number of milestones may or may not be obvious at the start of work, may need to be reconsidered and modified, and for a long-term contract may be open-ended.

Best,

Michael

p.s. Where's my upselling credit? ;^)