Do designers deserve down-payments?

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Every once and a while I like to have a good long conversation with a few loyal readers of GDB to see what makes them tick, what problems they face, and how GDB can better serve them. Recently, in a discussion with a friend of mine, the topic came up of
whether or not to charge design clients a down-payment prior to completing their design project. I thought it would be interesting to share with you a few of the conclusions we came to and ask for your opinion on whether or not designers deserve down-payments.

Some jargon clarification

Some of you might be wondering what a down-payment is; not because you are unfamiliar with the concept, but because you call it something else. Some people refer to a down-payment as a prepayment, a security, or a deposit. Essentially, a down-payment is money that you design client gives to you prior to completing any work. Many organizations and companies use the concept of a down-payment; i.e. when buying a house, taking out a loan, or hiring a lawyer for example. Throughout the article I might refer to a down-payment as any of the above terms. Just know, it all means the same thing.

Why charge a down-payment?

There are a few good reasons why you might decide to adopt the tradition of charging your design clients a down-payment prior to completing any work (and I’s also love to hear your suggestions and additions to the following suggestions):

DOWN-PAYMENTS KEEP BOTH PARTIES HONEST
A down-payment is a way for your client to say “We trust you with the project and plan to see it through to the end”. It makes it more difficult to bail out after work has been completed and keeps both you and your client working hard toward the final goal of project completion.

DOWN-PAYMENTS MOTIVATE EACH PARTY
In addition to keeping you and your client honest with one another, down-payments motivate each of you to complete your portions of the project on time and correctly. Ideally, you will create a contract that both you and your client sign that explains what each of you will do and when. The condition of this contract should be the retaining of the down-payment.

DOWN-PAYMENTS ESTABLISH A RELATIONSHIP OF TRUST
A down-payment can be a great way to establish a relationship of trust with your client. They are offering their trust to you by paying you for work you haven’t even completed yet. Imagine what kind of trust that requires, especially depending on the price of the down-payment. Paying someone hundreds or thousands of dollars prior to completion of a project shows trust and confidence that the project will be completed quickly and well.

DOWN-PAYMENTS ENABLE YOU TO MAKE PROJECT-RELATED PURCHASES
Another issue you frequently face as a designer is dealing with project-related costs. Whether you need to purchase hosting for your client’s web site, print mock-ups, or simply pay rent on your office, down-payments can keep you in business so you can complete the project for your client without going in to tremendous debt. A word of warning, however: do not spend your deposits right away. If you spend your deposits on rent, for example, and then your client falls through, contract terms are breached, or you cannot withhold your end of the bargain, you’ll need to return the deposit. If you’ve already spent it, you might be up a creek without a paddle.

The real question: Do designers DESERVE down-payments?

Great, we’re starting to understand why you might consider requiring down-payments from your design clients. But let’s get down to the issue at hand: do designers really deserve down-payments? Is it really something you can pull-off successfully as a designer to charge your clients half the total estimated project cost before you even do anything for them?

Some would argue that charging a down-payment on design work is a little excessive. After all, most times you only charge a down-payment on something huge, like a house, a car, an office building, right? Depending on the scope of your project, actually, a down-payment could be a perfect solution for you. You are a hard-working designer with a very busy schedule. You deserve to know that your clients are serious about their projects and will pay when the time comes. For you, time is money and if you work countless hours on a project and then receive no pay for your work, you have been degraded and treated poorly. As a designer, of course you deserve a down-payment from your clients!

I am curious to see how you feel about down-payments and whether or not designers should charge their clients a deposit. Feel free to add your agreements, disagreements, etc. in the comments on this article. I think the discussion on this topic can really be quite interesting.

How to go about obtaining a good down-payment

Now that we have established the fact that you deserve to charge a down-payment to your clients, let’s explore the best way to go about doing it. After all, some of you might be an independent freelance designer just starting out. Why should your clients trust you at all?

The solution? A good, solid contract.

You’ve heard me preach frequently about the importance of contracts when working with clients. If you aren’t using a contract in your design business, you are running the risk of not getting paid, being sued, getting paid too little, getting paid late, or doing way more work than originally intended without any increase in pay. Frankly, if you are working as a designer and don’t have a standard agreement and contract procedure, you’re crazy. (By the way, I love to chat with designers about their contracts and other aspects of their design business. Feel free to drop me a line about any contract questions you have, concerns you face, or suggestions you have. I’d love to chat with you.)

Anyway, your contract or terms of agreement should include how much your down-payment is, when it is due, what happens if it doesn’t get paid and other important details. It is also important to explain to your client why you require a deposit. Help them understand some of the points we have discussed today and you’ll be well on your way to getting paid what you deserve as a hard-working designer.

Do you think designers deserve down-payments? Add your thoughts.

I’d love to hear your thoughts on the matter so feel free to discuss how you go about getting a decent down-payment, any success stories or tips you might have, and questions or concerns you need resolved. I’m excited to hear your thoughts and comments. Thanks for sharing.

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About Preston D Lee

Preston is a web designer, entrepreneur, and the founder of this blog. @prestondlee

Comments

  1. Ofcourse i am afraid to start a project without down payment… i give importance to time and effort that i am doing. I BELIEVE WEB DESIGN JOB IS NOT A SOCIAL WORK :)

  2. Good article for discussion. Designers should be paid what they’re worth, and that includes a deposit (down-payment) to begin a large project. Another reason some designers choose to use this method is to weed out the “tire-kickers”, those that really want a very cheap price and don’t want to front the money to start a large project. You are also right in stating that a deposit keeps both sides honest to the finish of the project. When I talk to my clients about a deposit, I simply state this: “It keeps us both aware that together, we have a project to finish. By paying a small deposit you ensure I will work on your project with you to its end; this deposit also ensures you understand the professional aspect by which I will approach your project.”

    Interesting point on when to spend the deposit, so now I’m curious: at what point do you spend it? Obviously if you need to secure hosting, domain name, or other incurred expenses, keeping track will help us understand what has been spent, what’s left. Is there a rule of thumb? Also, regarding a refundable deposit once a contract has been signed: this is the first time I’ve heard of that! The majority of my local colleagues have a non-refundable deposit agreement. Is it more beneficial to have a refundable policy?

    Thanks, Preston! Great topic!

    • @Lisa Raymond,
      Excellent Response, Lisa. I love this especially -> Telling your clients: “It keeps us both aware that together, we have a project to finish”.

      You mentioned at the beginning of your comment that you bill down-payments for large projects. Do you do the same for smaller ones as well?

    • @Lisa Raymond,

      Deposit sounds like they can have it back whenever they want to.

      Can you elaborate?

  3. Requesting a down-payment was a great success for me and my team. To be honest, I don’t see any disadvantages of this approach. However, we don’t go 50-50 and request only 35% as a down-payment.

    • @Karol K. – web 2.0 guy,
      That’s a great compromise. When you say it has been a success for you, Karol. What do you mean? How has it helped your company?

      • @Preston D Lee,

        From my experience, down-payments are scaring some people off. I consider that an advantage ;)

        The thing is that people serious enough to be able to appreciate some good design work, people with clearly defined goals and requirements don’t have any problems with paying some money upfront because they know the value of the work. If a client has some reluctance then they probably were not sold good enough on the project or they are simply not ready for this kind of service.

        After introducing down-payments we have yet to encounter a really difficult client (or maybe it’s just luck).

  4. I think that down-payements (for big and medium project) are really fondamental for motivate me to do a better product.

    After a month of work, a week ago, I delivered a web site. I have a contract, but till now I didn’t saw a cent.

    That’s frustrating. I know I’ve done a nearly nice work, but not the best.

    Yes, after the clearance, I’ll prepare a new project.

    • @Andrea Canton,
      That’s a great point! Sometimes it’s hard to do a good job when you aren’t motivated. And sometimes it’s hard to stay motivated, when you aren’t getting paid. How much do you require as a downpayment in order to feel motivated enough?

      • @Preston D Lee,

        from 30% to 50%. Till now, I waited that the client ask if I need that, maybe cause I’m making new clients and I don’t want to overdo.

        I think, when I’ll return to my old clients and, at 98%, I’ll require a down-payment.

  5. Hey Preston, great topic! I think it might be an unfortunate part of many designer’s careers that they get stung creating design briefs or even doing complete jobs and simply not getting paid for their time and efforts.

    This is a great reminder that such simple things as a down-payment can mean the difference between paying the bills and eating, extending one’s professional reputation, etc. to finding oneself out of work and out of money.

    Often the pursuit of legal action on such small sums as the down-payment would most likely be is not worth it as the legal fees would negate the money due.

    Thanks also for bringing up the importance of both having it in a solid contract and explaining it to your client – both are just as important as the other, in my opinion.

    • @Laneth Sffarlenn,
      Great comment, Laneth. It’s great to see you back at the site here. Your comments are always worth it. You bring up a great point: if you don’t do it right at first, you can’t really afford to take legal action later. It’s usually just not worth it.

      Do you have a particular way you like to state it in your contract or explain it to your clients?

      • @Preston D Lee: Thanks, it’s good to be back :)

        Much the same as when someone steals your portfolio work, other than a take-down notice there’s not much legally you can do unless you have the time and money to throw at it.

        For me, personally, I’ve only worked with a couple of clients and they were people I already knew. If I was to engage a client whom I didn’t know, I would probably include the discussion within the first consultation, whether in person or over the phone / skype, etc.

        The idea of a “down-payment” or deposit shouldn’t be very foreign at all to most people as it’s a concept used in many different industries. Even writers get down-payments or “advances” to get the work done for the publisher (usually).

        In reality, the discussion of the down-payment should be made in conjuction with, or after, the client is presented with and agrees upon your quote. A percentage or exact figure, depending upon your preference, of the total cost should make the person feel at ease so they know A) exactly how much they’re up for with both the deposit and total cost, and B) that they won’t be paying the deposit on-top-of the quoted figure.

        Setting it out plainly, being up-front and honest about why it’s there would be how I’d go about it.

        Thanks for asking the question! I’m loving the discussion here!

    • I agree. however there are professional Rip-off clients who will pay a down payment only too cheat you out of the balance they owe you after you send them a draft of the project with a water mark. How do you deal with this problem?

      Don

  6. As a designer of a few varieties, I think the idea of a down-payment is great. The one fear I have (because I have heard others say they have had this happen) is not taking a down payment, and then having a client waste countless hours of my time only to bail out or refuse to pay. The way I like to explain it is this, the money up front is contracting me to work on your problem and paying for my time put into it, the final payment is for the deliverable.

  7. well, am a designer in asia… and the downpayment is a must. Like mentioned, we wouldn’t know if the client’s genuine, or he/she might look at your propose designs (done for free) and get his/her own to replicate the idea.. At least with a downpayment, know the effort’s paid for.. :D

    my structure goes, 35%, 50%, 15%

    • @quottro,
      Good thoughts. Thanks for sharing. Even if a down-payment doesn’t work for you or your company, I would NEVER EVER send them comps or files until they have paid. Like you said, they could send it off to another designer and blow you off completely. Also, your contract should include a statement explaining that all comps, ideas, and files are yours until you receive payment in full.

  8. I believe all designers should charge a down-payment. When a project takes longer than expected without being paid a down-payment, there can be serious cash flow issues that may ruin a freelancer’s career.

  9. Yenni Brusco says:

    I think that having a down-payment makes sense, and not having it makes it seem like the work isn’t worth as much. When i’m doing anything with down-payments related to designing, I usually go with a 25/25/50 method. 25% of the estimate is given to seal the deal and get the project moving, another 25% is paid after the design is about 1/3-1/2 finished/agreed upon, and then the final 50% + any difference between the estimate and the actual costs.

    • @Yenni Brusco,
      I really like that system. I have never approached it from a three-tiered angle, but I think that could be really effective. It can keep you on track. So if they fail to make a payment, what happens?

      • Yenni Brusco says:

        @Preston D Lee,

        I haven’t done many projects, most have been with people I personally know or are direct connections. In theory I would halt work until paid for the 2nd payment, but in the case of not getting the 3rd, I wouldn’t deliver the final product, or any associating files until paid.

        If there is an issue with some files having been transferred before, I always keep my identification hidden in files i send out, with the copyright belonging to me. Rarely do people want to take the effort of removing a tiny, non-visible if printed mark, but I can prove it’s mine by showing that it exists.

  10. Definitly Designers deserve a down-payment. I don’t do one job without one.

    Way back I did a job, off of craigslist, where I get most of my clients. It was extremely cheap, like almost a insult what the client wanted to pay. However, I thought the design would make a good addition to my portfolio.

    I did the work, and I didn’t get paid. He disappeared. Luckly I didn’t send him the source file.

    Needless to say. Collect a down-payment no matter how big or small.

    • @Laura,
      Thanks for sharing that experience. So no matter how small, you think designers should collect a down-payment?

      • @Preston D Lee, Yes. I got screwed over $20 one time, and I was practically giving away the work. I’m glad I never sent him the source files though.

        I believe now, if the figure is fairly small you should collect it all up front.

        Anything under $40-50 should be collected upfront. Now if the client is hesitant on that, you can go at least the 50% that way your time has been paid for.

        • @Laura, Another thing to consider is for larger projects instead of collecting 50% upfront, designers could do 30%, 40%, 30%…milestone payments, especially if the project is going to take weeks.

  11. We never start work on a project without 50% in the bank, with the remainder due on completion of the work. However, even that isn’t motivation enough for some of our web clients, so we are now about to revise this further to insist on 25% due once a website framework is built in order to motivate them to produce the content. All clients agree (by email) to our terms before we start the job so nothing is a surprise, and if they don’t meet any stage of the payment, then we haven’t committed a whole jobsworth of time without getting paid.
    Clients who don’t like our terms then we don’t work with them, simple as that – it’s the same rule for everyone.

    • @AndyiBM, I agree 100%

    • @AndyiBM,
      I am glad your company is at a stage where you simply don’t work with clients that can’t see eye to eye with you on payment issues. So many designers are still having a hard time understanding that it’s okay to turn down clients. It’s better to have less clients that pay you for your time than to have more clients that don’t.

      Thanks for sharing.

  12. In my long experience, any potential new client who has a problem with a deposit or down payment is a client you wouldn’t want anyway. I like Kore’s way of putting it. What other type of professional would start work with no sure means of payment? Another solution would be to take a credit card number, but many freelancers don’t operate this way.

    • @Kim Phillips | Lucid Marketing,
      That is an excellent suggestion! Tell them you won’t charge their card until the project is completed, but if they bail out, you will charge them 50% or some fee directly related to the progress of the project. Thanks for sharing that idea?

      Have you tried it? How has it worked out for you?

  13. Great article! We generally write up a very solid contract requiring a 50% down payment – for large projects it may vary in increments of 35%, 35%, 30%. So far no problems. I think it is helpful to have a reputation and a decent portfolio to show the client to establish trust. So the down payment option might be harder for somebody just starting out.

    I agree with a solid contract 200%! We pretty much explain EVERYTHING that will be delivered at end of project and of course also spell out ownership rights and liability issues for client provided material, etc.

    Do you guys also do down payments/contracts for smaller projects, lets say under $500?

    • @S. Sharp,
      I do. I always, always, always use a contract. No excuses, whatsoever. Even if it wouldn’t be worth it to take a $200 contract to court, at least my client knows I am serious about getting paid, working together, and finishing the project.

      What about you? How low is too low for a contract in your opinion?

      • @Preston D Lee,
        we usually always use contracts, unless it’s a repeat client AND a small amount (under $500). It derives from ‘lessons learned’ – in other words we have gotten stiffed before…

  14. Terrific topic and a good reminder to all designers, that, yes, you do deserve a down payment for project work. It’s just a good business practice. For one, it keeps a healthy cash flow for both you and your client. They aren’t having to pay the entire amount at the end of the project, and you’re not sweating it out to pay for overhead until you get paid. Rule of thumb, at least 10% down for average sized projects, 30% to 50% for larger projects.

    As Kim mentioned, a request for down payment in a contract helps weed out who is serious about working with you and who is not.

    Side bar on contracts: It’s important to clarify who is responsible for what, that you are not responsible for a vendor screw up, as well as ownership and rights after the project has been completed and you have been compensated. This is especially important for those of us who do illustrations as part of a design project.

  15. Be careful when using the word “down payment” in a contract.

    Everyone should be using “retainer” as a replacement for this vocabulary.

    A deposit by law is refundable if the client books you for something then decides later that they want to revoke that booking due to some circumstance. Then you are required to refund that deposit and you are out of being paid for any time lost in preparing or prepping anything for that client. I’m a photographer as well as a designer so when i say booking, I’m referring more to the photography side, but this can be applied to both. By using retainer that eliminates you having to put in the words “25% deposit is non-refundable” or whatever your refund rate is in the contract.

  16. If you are a freelancer, I think down-payments are necessary in this economy, to make sure clients are serious about the work, and committed to the process and time-frame for completion. It is really the only way to protect the time and resources you invest. Many companies are going out of business, and/or are faced with clients that cannot pay bills.

  17. Great article. I always require a 50% deposit before I even will touch a project. The balance is due prior to website going “live” or final print production is submitted. I put this into the estimate and have them sign off on it as authorization that they agree with price and that upon deposit, work will begin. Most times, I’ll also submit a Terms & Conditions just to detail the “rules of engagement”.

    My rule of thumb is if a client doesn’t want to pay a deposit then they are not serious or they are suspect. And when a client pays up-front for the entire job, they move up on the “favorite client List”. :)

    Bottom line, I think if designer has things in writing and is detailed prior to job start, it makes the client confident that their job is in good hands and the client agreeing terms and payment arrangement makes designer put a little more into project for a good client.

  18. This is a subject that is so hard to determine what is best. I have lost money on large and small projects big and little clients. Contracts are great, however they are still just a peice of paper and having to pay to take someone to court for not paying just isn’t always worth the time and extra money. Asking for money up front may turn people away. Not getting money up front may mean you worked for free. Is there really an answer for this one…? In my experience it is better to work with a person or company that understands the value of graphic design. To me it is the primary means of communication when creating interest in a clients product or service. If everyone understood that I would have a lot less issues with $$$. Until then I take it one client at a time. Great article, thanks for sharing!

  19. Kristin White says:

    Hi Preston,

    First, I am thrilled to be posting with another Kristin who spells her name properly. :)

    Perhaps “down payment” is not the right term to make it sound as legitimate as it is. Lawyers charge a retainer that is applied to the case as they work on it.

  20. I think that designer’s do deserve a down payment on design projects. I agree that a down payment keeps both parties accountable to complete the project. It makes both parties invested in the project.

    I have done a couple of projects for referrals from close friends without charging anything up front. All this did was delay the project because the client didn’t have anything invested in the project so they dragged their feet to get me the the things that I needed (feedback, project approval, etc.)

    I have since learned my lesson about not charging anything up front for anyone. I will typically charge 40% of the project quote with the remaining balance due upon completion of the project.

    I recommend a book called: A Designer’s Guide to Marketing and Pricing. Awesome resource for pricing your work and what, when, and how to charge your clients.

  21. Thanks,Preston, for sharing with us this precious article! I admit that I haven’t read the other’s comments before posting mine. That’s not because I’ve some kind of hate for them, but simply because I won’t to express myself without other’s words in my mind.

    When talking about work, contracts, payments, we all know how hard is to do things well and obtain what we work for. In my opinion there are two important things when talking of a collaboration designer-client: respect by us of the schedule and a prompt and complete payment from the client.

    As you said, we deserve receiving a down-payment for our work! This is because we have to invest time, money, headaches and so much more to have it done. By the other hand, I also think that we can’t ask for a down-payment when talking of small earnings.

    This practice of asking money before the job is complete, maybe is more important when working for the first time with a new client. In my experience, having asked in some circumstances for a down-payment has saved my ass because of not considered expenses and other stuff like that.

    When a client accept to deposit a down-payment for our soon-to-be-done work is giving us trust. We MUST consider his/her trust more important than money. If he/she has given us trust is because we have trasmitted well our capabilities and will to work with them. We can’t disappoint their trust. Not only because we will loose a client, but because we will feel bad inside.

    Nice article as always! Keep up inspiring the design community Preston!

  22. I happen to be a freelance copywriter, but I think the principle applies to anyone in business for themselves. I tend to go case by case. With established clients that I’ve learned to trust, I demonstrate this trust by not requiring a deposit. To new clients that I’ve never worked with before, I tend to require a deposit. It makes it very difficult to keep cash flowing when clients make you wait for months before they pay. I recently waited several months for a client of a multi-million dollar business to pay a $195 invoice. There just is no excuse for that. As you mentioned in the article, other professionals require it. I see nothing wrong with me as a professional doing the same.

  23. This is my personal preference and might not work for everyone. I used to do the half up front half when finished, but I find that while it is nice to get paid, it also has some drawbacks. Number 1, having a client pay half up front means you have a set fee for the job. This is fine when things are clearly laid out, say in a contractual agreement or long discussions to finalize everything the client wants, but as any designer knows, you could spend countless hour after hour, if not days or weeks refining and revising the final product. Time is money, and if I know at the end of the job, I’m only getting that other half of said fee after taking on additional work to complete the job, well, it might not look as so great when everything is said and done.

    Another reason is obligation. I’ve started jobs that never get finished. I’d much rather be able to turn down the job or walk away from it, if no money has ever exchanged hands. Lets face it, some clients we’re born the spawn of Satan and have no idea how much work it is to bring forth their ideas, if they even bother so share them with you BEFORE you start. The site clientsfromhell.com is a one stop shop for anyone who does freelance work and a must read to hear some of the horror stories of other designers experiences.

    For that reason alone, I have adopted a new method of payment. On average, a basic site generally starts at around the $300 range for my base work. What you charge is up to you, but thats a good ballpark figure for me personally. Some jobs end up well over $1000 per job, and might take a few weeks to complete, depending on the number of revisions or new ideas from the client that come up as you go along. I tend to work very closely with my clients to deliver what they ask for, even if it’s not something I would do for my own work. That means sending multiple samples over a period of time and a longer work flow to finish the job. If you want to keep your clients happy and coming back, you need to bend over backwards for them – to an extent. Again, not having taken a cent of money means you can decline the job at any point, and in turn, add the unfinished work to your portfolio for later use.

    If I agreed to do the job for $300, say for a 5 page layout, some artwork, logo, banners, etc. that could become a 3-4week job and in the meantime, I’m only getting half that amount until the job is done while still only getting $150 when the job is finished. If this became a much larger job, I’m taking a loss at the end of the day. You can always tell the client, sorry, we agreed to such and such, but do you really want to 1, disappoint a potentially residual client, and 2, have that sort of attitude reflect on your work ethic. I personally do everything I can to please the client, but at some point, you have to draw a line.

    So, what do I do? I calclated that if I spend 10 hours working on a theme or design layout, and charge $350 for the job, thats $35/hr and close to what I was making at my last full time job. Its enough to live on, and also enough that I work my tail off to try and get continual work to sustain and support my family. So what I tell my clients is, $35/hr for web design, $50/hr for stand alone logo and banner design, and 1 hr minimum for each service. I also have this clearly stated on my site, so when people come and ask for a quote, its already there in print. If they decide that its too much, well, I won’t ever find out, because the people whom do contact me for work, already know what I charge, and merely ask how long it will take to do the job. Sometimes I can do a site in 6hrs, others might take me 40-60 or more to complete. Depending on the conversation with the client, I can give estimates on the base price for knowing how long it will take to do certain things, and they can agree or decline the work, but at the end of the day, my client is aware that I charge by hour. I can also decide at my prerogative to work for a set fee, so that still gives me the freedom to work with my client on a budget that works for them while not wasting my time or theirs.

    And why not? If you went back to work full time for a company, they would pay you either a set Salary or by the hour. Either way, it results in an hourly wage each pay period and you get paid for the time you worked. I see no reason to not use this method when doing work for my clients. I’m looking to build lasting relationships with my clients, not one off quick payments here and there. I can’t survive with jobs too few and far between.

    Personally, it works better for me, but might not be your cup of tea. Having the option to decide on that set fee is totally up to you when you come across that bridge. If I finish a job in 10 hours and the client is happy, its still close to the average fee I used to charged per site or custom theme. I know that if I deliver a good product to the client, they will be more than happy to pay my required fees as well as come back for more work later. Also, if revisions to their site come up a few months later and only take 20 minutes or so to finish, its a quick $35 here and there on the side for a continued relationship with the client that may lead to more work down the road.

  24. I have always been wandering how to apply a contract. Is it enough to have the client acknowledge your Terms&Conditions or do you guys have them sign a specific piece of paper?

    Is it sufficient to just refer to the Terms&Conditions?

  25. I always take a deposit. And on web projects, I break it up even more. I have found that creating a payment schedule creates more solid benchmarks in the design process. I also state up front that any and all payments are non-refundable. I tell my clients that they should see it as hiring me as a temporary employee. Even if the process falls through, I get paid for time worked.

    I have not yet lost a client due to request for a deposit. But I have paid a lot more bills and gotten clients to commit better. Best thing I ever did.

  26. Once you get burned and you end up paying your team members for the time they invested in the project that will never see the light of the day you learn to respect down-payment.

    Since then I always charge between 25%-50% down-payment and I never looked back.

  27. I have requested a deposit on every project I have worked in since 1999 regardless of the size.
    This has proven to be a perfectly acceptable arrangement for clients of any size, although the multinational types tend to make life a little harder, mostly due to internal burocracy rather than an aversion to the idea.
    The few occasions in the early years where the client refused to pay a deposit and I decided to go ahead anyway, proved to be complete time wasters.
    There are no circumstances now where we would start a project without the commitment of a deposit. It greases the wheels and ties both parties together and has always created great relationships in my experience.
    Adam :)

  28. I typically will charge 30% up front, 30% at the mid point – when a design is agreed to and 40% upon completion of the job.

    My question to you is, how do you get around the clients who take a minimum of 30 days to pay? Even when a quote says clearly that payment is due upon receipt of invoice?

    I tend to have more clients that are people I meet face to face with, rather than online clients. And often everything is time sensitive. Artwork has to be at the printer by a certain date and apfinal approval comes a day or two before it’s due.

    Great blog, I could and likely will spend a lot of time here exploring. Thank you!

  29. Excellent post and excellent comments everyone, thank you. It looks like there was only one person who discussed basing the retainer for a job priced hourly though. I don’t charge by the job, I was once burned that way and never went back. If pricing hourly, would you first make an overall estimate for a job fee and then determine the percentages, even though your hours may not match up with the percentages at each interval? I would appreciate your comments on this. This is especially tricky when working with first time clients and first-time subcontractors. Thank you!

  30. I’ve long felt awkward asking for deposits, but have recently changed my mind for a couple reasons. I’ve had some good sized clients in recent years who have taken forever to pay me. They’re consistently pleased with the work, we have a good relationship in all other aspects, but sometimes payment has been several months in coming. Secondly, some of these same clients take forever to complete the project. We’ll be working away and then they’ll suddenly “disappear” for weeks at a time. I consider the deposits as part of my cash flow. If it’s a very large deposit I will save a portion until we reach certain markers in the design process – approval of first proof, etc. But if it’s a smaller amount I consider it money paid. I mean, I KNOW I’m going to put in the work and, in most cases, have already put in some of it by the time the deposit check arrives.

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  3. […] sharing here on GDB then you know that you should always take at least 50 percent of the money up front. In case things go really bad and the client vanishes completely, you at least have half of the […]

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