I work for a manufacturer of general purpose microcontroller boards and accessories www.BlueEarthLLC.com

I do a lot of customer support, as our controllers are used in many different applications. It is common for a customer to need to interface to a component or device that I have experience with, so they decide that they want to pay me to get their application up and running rather than doing it themselves.

I have seen it all. To echo the best advice I heard in this thread: Make sure that you do business with companies that you are at least reasonably confident will be willing and able to pay you.

That said, I don't like to start a project without up-front cash. For projects of moderate to significant size, I get 1/3 to start, 1/3 when I deliver the first "working" (usually mostly functional) unit and 1/3 when then customer has verified that the unit finally meets all the required specifications (or 30 days after delivery of what I believe to be fully functional.)

Most important: Get it all in writing ahead of time. Unfortunately, I do a lot of small-ish projects, and I typically spend more time doing "Project management" than I do engineering. However, you have to stay on top of the project from start to finish, especially if you want happy customers.

Software time-bomb:

Now an interesting story from the other side of the project. One customer contacted me to ask about helping with his software interfacing to a Dallas i-button. I said "Sure, send me what your requirements are and I'll get right on it." He just needed a little help understanding and/or modifying the software that a "former employee" had done for him. Do you know what it is like when something just doesn't feel right? Well, after a few rounds of me asking questions and my requests for schematics, existing source code, etc., I determined that he had a product that he had an agreement with another company that sold him the system along with a "payment system" in the iButton that he had to recharge in order to continue using. He wanted me to break the code so that he could get around payment!!! As soon as I figured that out, I sent everything back to him with a note explaining that I was not interested in helping him now or ever.

-- Tom Bachmann