Forums: Discussions for entrepreneurs and small business.

Hi All.. just looking for some different points of view among the SuN members.
I have accounts that I have been working with for several years and for those accounts, unless it is a huge project that requires me to lay out a lot of money, I don`t require a deposit. But for new accounts, I feel that it is  a necessity to ask for a 50% deposit.

As a new company myself, some of my vendors ask me for 50% in advance and some ask me to prepay the entire order. In these situations, I really can`t afford to tie up my money.

What are your feelings about asking for a deposit?

I always ask for a 50% deposit.  I don`t put pencil to paper until the check has cleared.  It is rare that someone is put off by it.  In fact, I think most often clients prefer that I am being professional about how I get paid.

I think that is very reasonable of you to ask for a 50% deposit ... I generally ask for one as well, unless other arrangements are made or it`s a fast project (ie something small that will be billed for 100% within a week anyway). And yes, the requirement is often times waived for repeat clients in my line of work, but I think that would also depend on what kind of services you are providing. For example, when I`m just doing some coding for a repeat client, I will just bill them at the end. But if I am doing a large printing project that would require me to use some of my cash flow to "cover" the client`s project until they paid, I might require they pay 100% of the printing costs up front because that is what the printer requires of me. Most clients find this reasonable because you can`t walk into Kinko`s, tell them you want 500 copies, and then say "I`ll pay you for 50% now ..." I mention this because if you are providing promotional products, a lot of your suppliers are going to require 100% payment from you at time of production (say, for something like t-shirt printing or making logo pens), so it seems only fair for you to require the same of your customer.

With rare exception, I always ask for and receive full payment upfront. It just eliminates so many potential problems. I`ve never had one client complain about it either.

Dale King

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I always ask for 50% down if it`s a new client. If it`s a repeated customer well it also depends on how well their credit is. I don`t run their credit "don`t get me wrong" it all depends if they`ve missed payments, bounced checks, or declined credit cards.
One time is OK but if it`s repetitive, and I feel like I have to beg for them to pay me for my services, Then when they need another project I ask for everything up front.
You just have to play by ear in this situation.
I think if the project is less than $50.00 updates for example you can pay at the end.
If it`s over 300.00 get 50% down... 

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Edgar Monroy
Web Developer / Owner / Consultant
When starting your own business the need to "know-how" is greater than money!
http://www.nuevolution.net

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Michael A. Silva
Silva Consultants

www.silvaconsultants.com

As a Virtual Assistant, I normally work on a retained basis.  Retainers are billed monthly and in advance.  I don`t start work until payment is received.  If I`m doing pay-as-you-go (PAYG) work and I don`t know the person, I get a 50% deposit before I begin work.  I haven`t had any problems with this and neither have my clients.