Do you start a project with a new client without a deposit?

23 replies
I'm curious. A question for the small business owners out there running marketing businesses.

I have a new client.

We have had plenty of chats on the phone, he has approved my quote, he is keen to see work, he hasn't paid a deposit however he is putting pressure on to see some initial work.

As I have had a few invoice stragglers in the past, I usually only start work for new clients once a deposit has been paid. Once I have worked with people a few times I am more lenient however it is a way to ensure my clients mean business and respect my business terms.

What's your process? I don't want to see like a stick in the mud, however I don't want to chase people down for payment... some clients in sales like to skirt around my policy, so interested to see how you manage it.

Thanks.
#client #deposit #project #start
  • Profile picture of the author superowid
    If you have an established service, then you must get the deposit first. Since you already have some proven works and previous client's testimonials, it should be enough to show your serious service to him.
    It seems he doesn't trust you yet for some deposit and insist you doing the first task. I would leave him and not waste my time with such client.
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  • Profile picture of the author Robscom
    I would never do work for a new client without a deposit.
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    • Profile picture of the author evanbang
      Originally Posted by Robscom View Post

      I would never do work for a new client without a deposit.
      This exactly...
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  • Profile picture of the author AnniePot
    Brand new client? 50% deposit, up front without question. Established client? 25% up front.

    Also, you don't mention a contract, don't you have one? You must have a contract that clearly states the exact scope of work you are undertaking, the payment structure; the number of 'free' revisions and the exact cost of any subsequent revisions. Put everything in black and white and get it signed by both yourself and your client before you do any work.

    These two things will sort out the genuine clients from the charlatans.
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  • Profile picture of the author neshaword
    Not sure if my freelance experience disqualifies my immediately. Guess, cannot be still treated as a small business owner. Yet, for what is worth, if an escrow service applicable in your own case? I am in the writing business. So, what is the use of your deposit, if we are going to end up disputing my work? That is why, I offer a â€"test page.” I want to see how it is going to work for both parties.
    If a client is serious about hiring you, depositing stuff should be the least problem. Yet, I just do not like to begin a relationship talking about deposits and similar â€"technicalities.”
    I bet you have noticed that I have stigmatized as one freelance website’s â€"mercenary writers.” That is the reason I am hesitating to suggest a simple solution. This is what I do. Hello, I work on this freelance platform. You wanna work with me? Feel free to deposit some money, not because of me, but those are the rules on this site, etc.
    One of the warriors nailed it properly: 50% or I am not gonna even blink.
    Good luck!
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  • Profile picture of the author Rose Anderson
    I always get at least a 50% deposit. I offer a small discount if they pay 100% upfront. I never start work without a deposit. So far, it's worked out well for me.

    Rose
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  • Profile picture of the author Oziboomer
    Originally Posted by gingerninjas View Post

    What's your process? I don't want to see like a stick in the mud, however I don't want to chase people down for payment... some clients in sales like to skirt around my policy, so interested to see how you manage it.
    In several businesses that I operate where we provide bespoke services we always try to get 100% upfront and if not then a "high" deposit.

    That might seem hard to achieve but we use a few strategies to get the result we need.

    First we accept and have all methods of payment available so there is no excuse we don't have the option the client chooses.

    Secondly the language we use when talking to a client is as follows....

    "Will you be paying for your ..xxxxx...today or would you prefer to pay a deposit?"

    We offer 5% discount for upfront payment but we only offer that when a client is requesting a discount and we want them to pay the 100% upfront.

    When a client wants to pay a deposit we take two approaches.

    One is to state that the deposit will be 50% today and the balance on completion.

    The other is to use the word "majority"

    If a client asks how much deposit we require we state...

    "Most people (or the majority) pay upfront but we are happy to proceed with 50% deposit"

    Sometimes we use "The majority pay 50% deposit and 50% on completion"

    The reasoning behind these suggestions is based on the studies by Cialdini as published in his book "Influence - The psychology of persuasion"

    People like to be part of the "majority"

    Also...people like "reasons why" - hence we are happy to proceed with 50% deposit.

    It doesn't really matter what reason you give as the power of offering any reason will improve compliance.

    Some of the "reasons" I've given have been because...

    "It's the end of the month and our rent is due"

    "In God we trust...everyone else pays cash"

    "My credit card is due"

    "All my other clients pay upfront"

    "I've got to pay my designer/coder/staff etc"

    "My tax is due"

    "Websites have just got more expensive due to the Brexit"

    You get the picture....

    Make sure you have a contract and you get at least some payment before doing any work.

    Ignore and try to isolate yourself from the excuses you will get from anyone and everyone when it comes to paying you money.

    Make a list of rebuttals to every excuse you can think of.

    When dealing B2B I've found that there are only a few circumstances where you can extend credit and those are usually with some Government departments but in our circumstances most of the corporate purchasers have access to corp credit cards or can arrange payments quite easily.

    One thing to note...

    If any client can't make even a micro-commitment like returning calls, approving work, paying a minuscule deposit etc etc.... they will never be a "good" client.

    The best ones pay upfront and then they expect you to over deliver.

    With long-term clients there can be some flexibility but you will find if you start out with rigid payment conditions the long term clients won't be the problem because they know how you work.

    Make sure new clients "KNOW" how you work and you will eliminate many problems down the track.

    Best regards,

    Ozi
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  • Profile picture of the author AnniePot
    ^ ^ ^ Excellent advice!
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  • Profile picture of the author bestIMtools
    I *ALWAYS* get at least 50% upfront. A lot of times, when the client already trusts me, I get 100% up front. I never start to work without a deposit, unless I offer a review copy of a piece of content or a flyer, etc.
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  • Profile picture of the author Sebastian03
    I think it is safe to get a deposit, this will protect you just in case the other party does not pay.
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  • Profile picture of the author gingerninjas
    Really, really, really interesting comments here - thanks so much.

    I think I need to be a little more regimented with my deposits and less lenient and casual, I really appreciate your suggestions and will take them onboard.

    My terms are fair and firm, however I think maybe I haven't been enforcing them adequately.
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  • Profile picture of the author BradVert2013
    I generally don't ask for a deposit unless the amount is going to be several hundred dollars. Most of my clients need multiple articles per month and will generally pay for each article when I send it. They also know if they don't pay, they won't get any more work from me. I have a few clients that do pay for all content at once at the end of the month. But I've been working with them for a long time and we have a lot of mutual trust.
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    • Profile picture of the author gingerninjas
      Originally Posted by BradVert2013 View Post

      I generally don't ask for a deposit unless the amount is going to be several hundred dollars. Most of my clients need multiple articles per month and will generally pay for each article when I send it. They also know if they don't pay, they won't get any more work from me. I have a few clients that do pay for all content at once at the end of the month. But I've been working with them for a long time and we have a lot of mutual trust.
      Thanks Brad, yes it is mainly for larger projects that I am referring to. The articles are fine, however, I do get some cheeky people that will take 4 to 6 weeks to pay and I'm left chasing them which leaves a bad taste in my mouth after I have provided work for them (which coincidentally they have loved).

      The ongoing clients are absolutely fine, it's the new clients who I have to set expectations for.
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  • Profile picture of the author hiteshsahni
    No deposit. No work. As simple as that!
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  • Profile picture of the author GetPLRhere
    If you're gonna go without a deposit, then use milestones. Say the project cost $1000 for creating a website.

    He will need to pay you $250 after 1/4 of every project completion.

    I can't blame someone whom I'm never met to put a deposit on me but I need to protect myself too. I think 1/4 of a project isn't a whole lot to lose of your time (unless it's programming).

    There are also established 3rd party escrow service too that can assure you that he made a deposit and therefore, you'll know he's not out to scam you.
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  • Profile picture of the author laurencewins
    I get 100% payment upfront. I do have some flexibility for my long term clients.
    I'm very black and white in this aspect of my business.
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  • Profile picture of the author ChrisBa
    Originally Posted by gingerninjas View Post

    I'm curious. A question for the small business owners out there running marketing businesses.

    I have a new client.

    We have had plenty of chats on the phone, he has approved my quote, he is keen to see work, he hasn't paid a deposit however he is putting pressure on to see some initial work.

    As I have had a few invoice stragglers in the past, I usually only start work for new clients once a deposit has been paid. Once I have worked with people a few times I am more lenient however it is a way to ensure my clients mean business and respect my business terms.

    What's your process? I don't want to see like a stick in the mud, however I don't want to chase people down for payment... some clients in sales like to skirt around my policy, so interested to see how you manage it.

    Thanks.
    I think it depends on what the work is, each industry has different standards. With that being said I would be hesitant to do much without a deposit.
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    • Profile picture of the author gingerninjas
      Originally Posted by ChrisBa View Post

      I think it depends on what the work is, each industry has different standards. With that being said I would be hesitant to do much without a deposit.
      Yep the industry does make a difference based on the deposit, some industries are happy to pay 100% upfront, while others have a difference process. The client in question that prompted this thread is in the real estate industry and is a little 'unique' so I guess I wanted to see what everyone's policy was. From this thread I have reviewed my systems and hope that I can offer a firm but fair system that works for everyone.
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  • Profile picture of the author Gallag97
    well only if the business is legitimate and there is proof that the company has provided its service successfully then yes a deposit is required.
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  • Profile picture of the author StavrosSc
    I have always asked for 50% down payment and surprisingly, have come across little resistance.

    The only exception is one particular client of mine that has been with me for quite some time. In their case, I ask for 25%
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  • Profile picture of the author writeaway
    I always ask for payment upfront

    Gets rid of all issues

    The interesting thing is that it actually generates more sales because they can tell I'm more serious
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    • Profile picture of the author celente
      Originally Posted by writeaway View Post

      I always ask for payment upfront

      Gets rid of all issues

      The interesting thing is that it actually generates more sales because they can tell I'm more serious
      yes, multimillion dollars budgets and jobs, have 3-4 payments as the projects roll along, as both members or parties are happy and you can give briefings as things progress.

      There was even a billionaire that teaches this strategy and even how to fun projects along the way with outsiders money.

      But lets forget about millionaires, and billionaires for a second, this can work on small scale stuff too even for jobs that are in $1000 - $3000 range. But its up to the individual.
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  • Profile picture of the author gingerninjas
    Interestingly, I informed this specific client I would require a deposit before commencing and they have backed off and gone a little cold, he said his is 'juggling priorities' and will be back in touch... cheeky I say.

    Good lesson learnt and I will continue to stick to my guns and not be deter from my policy, no matter how convincing some people are... Thanks for all your suggestions
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