When Should You Ask Clients to Pay a Deposit?

1. The project will take time.

Depending on the type of business you run, your projects can span weeks, months, and even years. If you’re delaying payment until the end of the project, that means you’ll be working without a dime of payment for that entire time.

2. You risk non-payment.

Perhaps the biggest motivator for requesting an up-front fee is that it reduces your risk. Whether you’re being paid an hourly fee or a lump sum for the entire project, if the agreement is that payment will come when work is finished, there’s no guarantee your client won’t bail on you somewhere along the way. You’ll be left spending time and resources to make sure you get paid.

3. You need collaboration from the client.

Most projects require client participation for success. Whether you’re designing a logo, programming a new app for a business or performing any other type of service, feedback will help you know whether to keep moving or adjust what you’re doing.

4. You need solid cash flow.

Running a business isn’t cheap. You likely are well aware of the many expenses associated with operating a business, from the space you lease to the employees whose salaries you pay. If your company relies only on end-of-project payments, you’ll soon be out of business.

5. You have project-related costs.

If you’re a growing business, chances are you don’t have a substantial bank account to finance your clients’ projects. This is especially true if you have to subcontract some of the work to a contractor or third-party provider.

This article originally appeared on americanexpress.com. Thanks for reading! My work is almost entirely reader-funded so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following me on Twitter, and maybe throwing some money into my hat on PatreonPaypal, or with Etherium:. 0X24AC7A8FF92721B9827A03A6936FE169B864C94

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Writer: Inc.com, Entrepreneur.com ~ Advisor: http://t.co/7sYwBxg4W9 ~ Fantasy/Sci-Fi Nerd ~ Futurist ~ Tweets are my own.

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John Boitnott

John Boitnott

Writer: Inc.com, Entrepreneur.com ~ Advisor: http://t.co/7sYwBxg4W9 ~ Fantasy/Sci-Fi Nerd ~ Futurist ~ Tweets are my own.

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