3 Simple Reasons Why You Absolutely Need to Ask for a Deposit

3 Simple Reasons Why You Absolutely Need to Ask for a Deposit

Next to drafting client agreements, getting a deposit from your clients is one of the most important things you’ll do as a freelance designer.

A lot of new graphic designers make the rookie mistake of being too timid to ask their clients for a deposit.

Whether out of fear, lack of self-esteem, or simple ignorance, not getting that deposit up front can really end up biting you in the keester.

Take it from me as someone who wasn’t always so diligent about deposits, and had to learn the hard way. Design projects always go much smoother, and you have a much better likelihood of getting paid in full if you get that deposit in the first place.

Now that we’re clear on how necessary deposits are to your freelance business, lets look at a few simple reasons why deposits are so important.

1. Deposits minimize the chance of non-payment.

Let’s say you don’t get a deposit up front. You then put in weeks or even months of work for a client, who ends up being dissatisfied, changes their mind, or just disappears into thin air (it happens.)

Even if you have an agreement in place, you might have a very hard time getting payment from that client. If you got the standard 50% of the project total before you started the job, you are at least partially covered. While it is not as good as having the whole amount owed, 50% is better than a big fat zero.

2. Deposits keep your client invested throughout the process.

If you have a client who has already made a monetary investment in the project, they are almost always much more involved, and they take it much more seriously. Having a financial stake in a project makes it all the more real for them.

Back in the days when I wasn’t asking for deposits, it was quite common to have clients go missing halfway through the process. Since they hadn’t made any kind of financial commitment, if their priorities happened to shift, there was no real penalty for them to just bail on the project.

Once I started asking for a deposit, all of the sudden, every client was very interested in the project from start to finish, simply because they already had money tied up in it. Cancelling the project at that point would result in a loss of that money. In short, money is one heck of a powerful motivator.

3. Deposits help cover the cost of subcontracted help.

This one won’t apply to every designer, but for those of you who rely on outside help from time to time, pay close attention.

A big part of my business is designing websites. Since I believe in sticking to what I’m good at, I don’t code those sites myself.  I have web developers that I hire out to take my designs and code them into fully functioning websites.  If I didn’t get a deposit from a client, I would still be on the hook to pay my subcontractor for the web development work.

So if my client decides to skip out on the bill, not only would I have done all that work for free, I would also be out of pocket the amount I owe the web developer. Bad, bad times, and guess what? If you don’t pay them, you could open yourself up to a lawsuit, not to mention the negative freelance karma points.

Assert yourself, and don’t apologize.

Many newer designers have a real problem asking for money at all, let alone before a project has even begun, but if you want to make it in the freelance world, it’s a fear that you need to overcome. The first time you ask, it might feel uncomfortable, but you need to do it anyway, for all the reasons above.

I have found that the best way is to not even ask at all. Whenever I have an initial consultation with a new client, I simply tell them what the next steps are if they would like to proceed:

“If you want to get going with the project, just let me know, and I will email you my standard agreement, and an invoice for 50% of the project cost as a deposit. Once those are taken care of, we can schedule the kickoff meeting.”

It’s just that simple. I just tell them what I need in order to begin, and I never apologize for it. The more you practice this, the easier it will become, and you won’t mind asking at all. And just remember this: anyone who has a problem paying a deposit is someone you don’t want to work for anyway.

Tell us about your deposit strategies, or horror stories where there was no deposit involved!

How do you ask for deposits from your clients? Have you ever had a client react badly to it? What about any times when you failed to get a deposit, (but you wished you had)? Leave a comment below, we would love to hear your personal experiences with deposits!

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(5) responses

Jasmine Ellesse

July 7, 2014

Thank you for this advice. I often question how much I ask for let alone if to ask at all. And the fact that you don’t even say sorry for asking for it is an even better practice. Thank you.

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Bennie Stander

July 30, 2014

Hi, it is all about cashflow and getting the client committed. Time is money and if someone stiff you, you are screwed! I also realised if a client does not want to pay deposit, he is not serious – I rather then walk away!

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Hazel Lee

March 23, 2016

I totally agree with you, Bennie. We must be prepared to stand firm, when reasoning with clients and not be afraid to tell them why a deposit is required.

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ali

June 10, 2016

why make the mistake of asking for only 50%?
what happens if youre 89% into the project and the client disappears? you’ll lose the 39% you did for no compensation in return.
ask them staged payments like this. (canceling the project at any time will result in their money taken by you)
stage 1 (25%):
stage 2 (50%):
stage 3 (75%):
stage 4 (100%): get paid 100% before delivering the product (whether its a design or a fully developed website).

or just offer them a partial discount for a 100% upfront payment, say, if you’re charging 1000 dollars in staged payment, give them a 5 to 10% discount if they make a full payment upfront right before the project starts.
this way, you’ll have all the money paid and they have a discount to cheer for!

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    Wes McDowell

    June 15, 2016

    Well if that concerns you, you can always go to a different payment schedule… For instance 50% up front, then 25% after a certain milestone, then the final 25% when complete. While it feels very fair and justified to you to ask for 100% up front, your client will likely not feel the same.

    reply

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