How do you avoid getting the raw end of the deal in business?
Huge question, so let me focus just on contractors who are moving into running their own professional services business.
Watch the Red Flags
Let’s take three gotchas that affect freelancers moving into their own business. These are three red flags where people often get burned.
“We’ll give you equity in the business”
The first is the promise of equity. “You could be missing out on the next Facebook.” This is a red flag, because most new business ideas don’t become the new Facebook, or even generate any income at all.
“Exposure: this will lead to lots of other business”
The second is: “exposure.” You believe by getting your foot in the door at a low rate, you’ll get the next big gig at a high rate. This has a lot of problems about it. One is that it’s very hard to change a relationship from “cheap hands-on guy” to “premium consultant.”
“We’ll pay you later”
The third is getting paid too late: 30, 60, 90 days or even later. The solution is to be paid up front, just like you would if the service you were offering them were to fly them across the ocean. At least get a deposit.
Watch this 3-minute video for more detail.
Originally published at www.quora.com.