Captain’s log, stardate 20180523
Three nuances of asking for 100% up-front payment
Sent by Jonathan Stark on May 24th, 2018
One of the amazing things about pricing your engagements instead billing for your time is that you can ask to be paid in full before you start.
Asking for 100% up-front payment is a foreign concept to most service professionals I speak with. They just can. not. believe. that any client would ever pay for services in advance.
I’m here to tell you that lots of clients - especially the good ones - are perfectly happy to pay 100% up-front. If they trust you and the price is right, why wouldn’t they?
I’ve talked about 100% up-front many times in the past so I won’t rehash the basics. What I want to share today are some nuances that came up in my group coaching room:
- Asking for 100% payment WAY before the project start date is playing on hard mode—Some clients will do it if they are dying to work with you and would do anything to get on your calendar, but this ask is going to really test how much they trust you. If you really want early payment, here’s a possible alternative: suggest a non-refundable deposit to schedule the project in your calendar, with the balance due on the project start date.
- It’s fine to negotiate the terms of payment—One of the main reasons I propose such aggressively favorable payment terms is to give everyone something to negotiate other than the price. I’d rather wrestle with WHEN the client is going to pay me, than with HOW MUCH the client is going to pay me.
- Define “complete” if they want to pay 50% on completion—It’s not uncommon for a prospective client to counter with “50% in advance and 50% on completion”. Folks who are new to 100% up-front are usually so relieved that the prospect didn’t laugh in their face that they jump at the counter-offer. This isn’t the worst thing in the world BUT... If both parties start the project simply saying “we’ll make final payment when the project is complete” with no further definition of what “complete” means, you’re probably in for a fight. (NOTE: If you sell deliverables instead of outcomes, “complete” is easy to define - your challenge will be raising your prices.)
As always, just hit reply if you have follow-up questions - I read every message :)