Many freelancers are in a dilemma when it comes to starting a job. The main question is whether they should ask for a deposit before commencing the job or not. The need to ask for the deposit is driven by the knowledge that, a freelancer has to pay bills while doing the job. It is also a commitment on the client’s side on how seriously he takes the job.
On the other hand, a freelancer may be fearful that he might lose the deal for asking to be paid part of the money before work commences. There need not be a dilemma. The reasons why it is important to ask for a deposit from your clients are discussed below.
- It safeguards your interests
Let’s say a client has approached you for the first time. You have done some preliminary search and you have some reservations about him. Depending on the kind of information you have unearthed, you might want to cancel the deal before it starts. The next best thing would be to ask for a deposit amounting to a quarter to a third of the total fee.
- It is professional to ask for a deposit
Asking for a deposit portrays you as a professional who takes his work seriously. It is the industry standard to do so and so knowledgeable clients will expect you to ask for it. When you are viewed as a professional from the outset, you are more valuable in the eyes of your current and prospective clients.
- A deposit builds trust
A client who agrees to pay a deposit clearly indicates that he trusts you. One who hesitates to do so either doesn’t trust you fully or he has an intention of not paying at all after the job is completed. You also come to trust a client who agrees to pay some money upfront. It is a fair indication that the remaining balance will be paid in time.
- A deposit ties a client to prearranged plans
A client who has not committed himself with a deposit can unilaterally change plans without due consideration to your situation. They can decide to change plans or even cancel a project. This can lead to bad business on your side because you may have passed other jobs because of your business engagement with such a client only for the job not to materialize. In this case you lose both ways. A deposit helps you to make other secure plans for your business and stick to a predictable timeline.
- A deposit helps you to pay for sub-contracted services
If you have to outsource some aspects of the job to other service providers, the last thing you want is to pay for these services from your pocket. A deposit will allow you to pay ‘your workers’ in time which will in turn boost your productivity and profits.
With these points in mind, you should never hesitate to make it clear that a deposit is an integral part of your business. You don’t request but instead make it known to your new clients that it is your business policy to have a down payment before you commence any work.
