How to Get Your Web Site Built By Abbie Drew Aug 24, 2005

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Now back to our regularly scheduled programming . . .

What I anticipated would be a quiet summer for my partner and I to work on our new futures and forex project, did not materialize. Unfortunately, the new Michigan and Utah Child protection laws caused us to have to modify our existing businesses. And our new project was placed on hold for the last couple of months.

As a result, my step-by-step review on how to start up an Internet Business was interrupted. Today, however, I’d like to pick up where we left off and get back to how we are developing our new futures and forex business. You will discover how we apply the Internet marketing know-how we've gained from making our living online for the past 10 years to starting a new internet business.

So far, I’ve gone over steps 1 - 5, how to select a target market, devise the products to sell and select the right help to get the job done. If you’d like to review this information you’ll find the articles of this series in our DEMC issue archive -


Step 1 and 2

Step 3 and 4

Step 5 part 1

Step 5 part 2


Step 6: Get a Contract Signed

Before you begin any work on your new project you must have a contract between yourself and the programmer, web designer, writer, etc. who you hire to assist you. There are 5 essential elements your contract needs to ensure your project is completed.

1) Have an exact outline of the work to be done.

You want to have written out as accurately as possible the job to be completed. Again, the importance of spending the time to complete Step 4 and create a detailed Project Proposal can not be over emphasized.

Including a copy of your project proposal in your contract clarifies to the company you hire what you want done. If an item, written out in your project proposal is not completed, you can point this out and get the work done. It will alleviate the “But I told you so” disagreements.

A thoroughly documented written outline will also get the project done faster not to mention you’ll have fewer headaches. Keep in mind, though, if you are not detailed in the project proposal and you neglected to include items you will be charged extra.

The company you hire will have based their project quote on the project proposal agreed to in the contract. You will pay the quoted price and get the work done. If you add to that work, however, the company in all likelihood will increase the price. So being as thorough as possible in your descriptions is crucial.

2) Specify Independent Contractor status.

When hiring a company to do work for developing your new business, be sure your contract specifies you are hiring an Independent Contractor. It is especially important to include this language when hiring a sole proprietor.

The reason for specifying the company you hire is an Independent Contractor is you do not want the contractor to be viewed as an employee. Should the contractor be viewed as an employee you then have to pay federal and state taxes for the worker, such as social security, disability, workers compensation, unemployment, etc..

As you can imagine if you have to pay these additional taxes and insurance, the cost of your project will increase dramatically. So make it clear that you are hiring an Independent Contractor.

3) No Partnership

When hiring a company you want to state that you and the company are separate legal entities. If a contractor is viewed as your partner, you could end up being liable for his/her debts. What’s more the contractor has the ability to make contracts that obligate you without your consent.

Therefore, be absolutely certain that your contract has a “No Partnership” clause. As I expect you don’t want to be going into business with the company you hire.

4) Intellectual Property Ownership

Now this point will be the hardest to negotiate. However, you want to be sure that you own the copyright to the work created.

When hiring an contractor, unless you specifically state that the contractor must assign or transfer the intellectual property rights to you, the contractor owns the work.

Therefore, if you’ve hired a web designer to create your logo, site layout, graphics, etc. the designer owns the copyright to that work. Thus the designer could use your logo, layout and graphics with another of his customers.

I do not know about you, but I am of the opinion that if I pay a contractor to design a logo or specialized script for my site, I want to own the copyright to that work.

You’ll find that some designer and programmers resist this request. They may say they won’t re-use the work so you have nothing to worry about.

Before you agree to their pleas, consider this point. If your contractor owns the copyright, you do not have the legal right to change or modify that work. Thus if your designer owns the copyright to the layout of your site and you go to use another designer to update a page – you will have infringed the copyright of the original designer.

When having web applications developed this point is crucial. As time goes by you’ll probably want to use another programmer or designer to work on your site or application, other than the original contractor. If you do not have copyright ownership of the code, you can not modify the script or the site! If you do make modifications you are potentially setting yourself up for a law suit.

So make sure your contract assigns all patent, copyright, licenses and trade secret rights to you.

5) Terms of Payment

Your contract should spell out how much you will pay for the work and when.

As you received a price quote for the work in step 5, you should include this amount in your contract. This will ensure there are no hidden fees at the conclusion of the project.

You also should work out with the company you hire when you will pay their fees. You may agree to pay half at the beginning of the project and the other half upon completion. You also could set-up installment payments so as parts of the project are completed, you pay for the work.

Knowing how payment will be handled up front helps to prevent disputes. You’ll know when fees are due and the contractor will be comfortable knowing when payments will be submitted.

An important point to consider when establishing the terms of payment is to be sure you do not pay for all of the work up front or even half way through. Always leave a sizable amount due upon completion. (More on why this is critical in number 6 below.)

6) Completion Date and Penalties

While completion dates and penalties are essentially a part of 5, the contract’s Terms of Payment, I wanted to separate out these items to emphasize their importance.

If you want to get your work done in a reasonable time period make the company you hire commit to a completion date. Specify this completion date in the contract. By having a completion date you will not have to ask week after week – “Are you done yet? Are you done yet? Are you done yet?”

To ensure the completion date is met - your contract must have a penalty if it is not.

What penalty is appropriate?

In our contract we use a late fee. For every day the completion date is not met, a $50 late fee is assessed. This late fee is subtracted from the final payment. For the late fees to be effective, you need to be sure you owe monies at the project’s completion.

I can not tell you how many times I have heard complaints from other online small businesses that their contractor is late at completing their projects. Pretty much when you hire a programmer, they are notoriously late.

If you do not want to be stuck waiting, put a late fee into your contract. As all companies hate to lose money, a late fee puts your work to the head of the line.

Will the company you hire resist having penalties in the contract? Of course! But do not be dissuaded. Having used contracts without a late fee and contracts with a late fee, I can tell you first hand they work!


If you would like to review the web development contract we use, you can access it from the autoresponder - sscontract@sendfree.com .

You can have a contract for your business written by an
attorney. You also can find a good source of legal
information as well as pre-made contracts from NOLO Press.


Once you have a contract signed with a company, you’re ready to get started on building the business.

So what’s the next step?

You’ll have to stay tuned and find out in our next issue!

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Abbie Drew
DEMC Editor

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