UPFRONT: A WIN WIN FOR BOTH DESIGNER AND CLIENTS (PART 2)

This is the continuation of the previous article (Upfront: A win win for both designers and clients Part 1)

 UPFRONT: A WIN WIN FOR BOTH DESIGNER AND CLIENTS (PART 2)

Clients Differ

Another idea that arose was that you wouldn’t necessarily ask a large corporation for a deposit. The decision to ask for deposit does have something to do with the type of client. That is true, but there are reasons for that.
  1. There’s more to gain with a bigger client. Your corporate client likely has a bigger project, with a greater price, and a greater potential for more of the same. With greater reward comes greater risk. That is to say we’re usually willing to take a bigger chance when the potential reward is that much greater.
  2. Recourses do exist with the bigger client. Where you might not require a signed contract for a $500 job, you more likely would for a $10,000 job. Even if you don’t the corporate client will almost always insist on one. That contract comes with legal protection as does the price of the job. It’s not usually worth it to take a $500 client to court. It would be worth it to take the $10,000 client to court.
  3. There’s a different kind of trust involved with the larger client. True you don’t really know the client, but you’ll have more trust for getting paid from IBM than you will from John Smith (Apologies to all the decent and honest John Smith’s of the world). You’re less likely to think IBM will welch on the bill. They might not pay as quickly as you like, but you feel confident they will pay your invoice.
Board room meeting
Even with all of the above you still might collect something prior to completing work. A project from a large client might take months, even years to complete, and few expect a small business or freelancer to not collect anything for that length of time. It’s entirely likely the corporate client would set up a payment schedule with you.
Another type of client who you might not seek a deposit from is a repeat client. You’ve gotten to know each other and have developed a trusting relationship with them. Some of my clients have been clients for years and we’ve reached a level of trust where I don’t ask them for a deposit and they don’t ask me how much a job will cost.
Either of us could get screwed, but we’re comfortable enough with each other to know this isn’t going to happen and both of us will do what we can to make sure the other is happy in the case of disagreement. Treating existing clients with a greater level of trust is one way to grow your business and get them to recommend your services.
Signature on a contract

Alternatives to Deposits

From reading above you can probably tell I think asking for a deposit is important to your success as a freelance designer. Are there alternatives? Are there other ways we could minimize the financial risk when taking on a project?
The idea of looking for alternatives is one that came up in the forum thread, in part, as a way to help differentiate your business. If everyone requires a deposit and you don’t then clients might be more willing to work with you as there’s no risk to them to get started.
Contracts are one way both designer and client gains some protection. Legal protection is a great thing to have, but again you probably need to go to court to get the benefit of that protection. Is it worth going to court to recover $200? $500? $1,000? At some point the money involved is worth time in court. Where that is may not be so clear. Contracts can be great, but unless you can realistically enforce them they aren’t worth the paper they’re printed on.
You also have to consider the issue of working with people in other countries. Which country’s laws apply? Where would the case be tried? Is it possible to get both parties physically present in court? These questions shouldn’t keep you from getting a signed contract. They’re simply to point out that a contract isn’t necessary a perfect way to recover a non-paid fee.
Signature on a contract
One idea that came up in the thread was to use an escrow service. An interesting idea though one I don’t think reasonable for small jobs. The escrow service will naturally want to be paid. Which side ultimately pays the fee. client or designer? For a small job it really doesn’t make sense to pay a third party to hold the money.
A similar idea would be to hire an arbiter to settle disputes. Again this probably isn’t a realistic idea with a small job due to the cost involved.
You might think holding onto login information for various aspects of the client’s site would be enough to give you some assurances of being paid. The thought has occurred to me once or twice to simply return a client’s site to the exact state prior to my working on it when they were avoiding paying my invoice. I often make a backup of files before working on them so it would be easy enough to download the modified file and replace it with the original.
This isn’t an ethical solution in my point of view though, and in the end still doesn’t get you paid. It might keep the client from getting your work for free, but it’s not something I would endorse. It breaks trust and ultimately could impact your brand in a negative way.
You can also try anti-marketing where you spend time promoting through various channels How the client in question doesn’t pay bills. Again not the most ethical solution to the problem, but one that probably feels good.
That’s about all I can come up with for alternatives and none works as well as asking for a deposit or setting up a payment schedule. I’m, always open to new ideas and if you have any I’d be happy to hear them. For now though, I’ll stick with collecting a deposit and occasionally taking a chance with some clients.
Chinese money

Summary

Collecting a deposit for design work has become the standard way of doing business for a reason. Sadly it’s too easy for bill to go unpaid when you never physically meet a client and have little to no recourses for collecting your fee. In an ideal world there would be no need to get paid something upfront, but the world we live in is far from idea.
Most clients are good and honest people with every intention of paying your bill. However all it takes is one or two not so good and not so honest people to rip you off before you have to pull some trust back from everyone.
A deposit lessens the absolute risk either party takes. No one is then risking 100% of the financial cost of the project. It takes some of your risk and places it on the client, but overall it’s fair to both parties. Don’t be afraid to ask for a deposit.
Do you ask for deposits before starting a project? If so are there times you won’t ask for one? Do you only consider them when the project price will go over a certain amount? Any ideas for ways to protect yourself without asking for a deposit?

Felix Obinna

Creative Visual + UI Designer • Awesome Dude. Curator/Writer at cgminds .