Female entrepreneurs – get paid upfront & never chase a client for payment again!
As women, we often undercharge for our services and we have a really hard time dealing with clients who do not pay us on time. Let’s face it, there’s nothing worse than chasing a client for payment. It’s a waste of time. It damages the relationship and it puts a kink in our cash flow.
In this video, we’re going to talk about how you can get paid upfront for your work, whether that’s 50 percent, 75 percent or 100 percent dependent on the type of work that you’re doing.
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Hi, I’m Kirsten with six-figure Business Coaching, and I’m going to read to you at one of our clients wrote.
My first job out of college was working for a collection agency. I hated that job when I was ready to start my own business. My biggest fear was not getting paid. This held me back for years and to be honest, I had not even connected my fear with that old job. I attended a workshop on how
to start a business that Kirsten and Jeannie taught. One of the topics they covered was pricing contracts, credit cards, getting paid upfront. I had no idea that was an option. After the workshop, I had the opportunity to work one on one with Kirsten. It was in that first conversation that we talked about my fear and where it came from. Who knew the first job was 20 years ago? I’m happy to say I started my business and getting paid has not been a problem.
BI monthly clients are on auto pay and my project work pay seventy five percent upfront. In some ways I wish I’d started my business sooner.I cannot change the past, but I’m grateful that
I took a chance and went to that workshop. And I’m so grateful for Kirsten and Jeanie.They have helped me every step of the way Willow.
Ok, so Willow is a social media manager and a Web site designer. So she has two different types of work. Her first work is project work, and that’s Web sites. When Willow does a Web site, she charges 75 percent upfront in the remaining twenty five percent when the Web site is finished.
Now, for her contract work, which is her monthly social media management, she has those clients on auto pay. So each month are automatically billed for their set amount of money based on the work that she does. So for an example, she does Facebook marketing and she also does Instagram marketing for one of her clients. She charges four hundred dollars a month.So each month that’s automatically bill to their credit card and she’s paid without the need. Invoice them. Isn’t that just fantastic?
When it comes to getting paid, whether that’s upfront or percentage or even working off of a retainer fee, the first thing you want to do in your business is set up your payment policy. This is going to define how you get paid when you get paid. It’s also going to be really important that
you feel confident about this payment policy and that you feel like you can explain it to your customers very clearly and defend it. In other words, if they have objections or questions that you really understand how to cover those objections and make it very clear that this is how you do business.
I found in the past that clients who want to negotiate how you work are usually not great clients to deal with. If they start off the relationship, question everything you do or not wanting to participate in the way you normally bill your clients. It’s a red flag. Create a paying a policy that you’re very competent with and that you feel very comfortable explaining to your customers and then stick to those policies.
Now that you have a clear payment policy in place, it’s important to use proposals in contracts. It’s one thing to communicate your payment policy with your clients. It’s another thing to put it in writing and have them sign it and agree to it. So we really recommend that you use contracts if you’re doing project work. The client may say we’ll send me a proposal.
So you put together the proposal, you send that over to the client. It defines the scope of work. What you’re charging and how you get paid. So if you’re getting paid upfront or you’re taking a retainer fee or you’re getting partial payment upfront, all of that will be laid out in your proposal. If they agree to the proposal, the next step is to send them a contract because we want to get them to sign that contract agreeing to the proposal terms.
Now, I know a lot of small businesses shy away from using contracts.And part of that fear is just because you don’t know how to do a contract or where to get a contract, or you’re afraid that it’s going to be too it’s too expensive to get a contract. And I completely understand that.
So over the years, we’ve had clients, they’ve hired local attorneys to do their contracts, which is probably the best way to go. Some of our clients have worked with legal zoo to have their contracts done using that service. Others have used legal shield to create their contracts And last but not least. Our clients have written contracts all their own.
Now it is entirely up to you because it’s your business with how you choose to create your contracts. I just highly recommend that you do create a contract. You practice going over the contract and explaining the contract in the terms of the contract so that when you are dealing with a client, again, you’re very confident explaining all of your payment policies and most of those will be defined in that written contract. Please leave us a comment below and let us know if you’re using a contract. And if so, who did your contract? Did you do it yourself? Hire a local attorney or use an online service? We’re always interested in learning how you’re running your business.
Next, I want to talk about retainer fees and I want to go a little bit more into detail about automatic payment processing. So first of all, when you think about a retainer fee, you think about a lawyer. A lawyer takes a retainer fee and then they bill hours against that retainer fee.They also take away expenses. You know, they’re making copies for you or their overnight documents to someone. They pull that out of your retainer. We work with a lot of interior designers who also use retainers. And we see very clearly that there are two different ways they do this. Some of them use the retainer just against items purchased. So in other words, if they’re buying a sofa or a flower arrangement or artwork, they deduct that from the retainer.Some of them actually also use it for labor. So they’re taking labor against the retainer as well. We work with several interior designers who also work with retainer fees.
Now, they do this in two different ways. The first way is they just use the retainer for buying items like they’re gonna buy a sofa or artwork. They take that out of the retainer and then they build separately for labor. So in other words, the retainer is just for items purchased and labor is built separately. Now we have other designers who use the retainer for labor and items purchased. There’s no right or wrong way. You just have to make sure you’re very clear in your contract how you’re going to use the retainer.
Now, I want to go back to talking about getting paid upfront and also automatic bill pay. One of the big mistakes we see a lot of small business owners make is they don’t want to take credit cards because of the fee. And I get that you’re trying to get every penny in the door and you hate wasting money on those credit card fees. However, if you want to get paid upfront, one of the key factors is going to be accepting credit cards.
Now we use two different services. We use pay, pal, and we use strike. Both of these services can be used to take a retainer fee, a deposit on your work. So, for example, 75 percent of a Web site done or you can set up automatic invoicing and bill pay. So in other words, the client gets charged each month the same amount of money for the work that you do consistently for them. So whether you decide to take a percentage of your money upfront as a deposit, do automatic monthly recurring billing or you decide to use a retainer fee, it’s just really important to let the client know all the terms of the agreement and then to make sure that you’re doing the work in a timely fashion in media, the scope of work that you promised.
The other thing is we have heard repeatedly the clients love this. I know that when we switch to automatic billing with our one on one coaching clients, we get great feedback. It made it super easy for them. They knew what day of the month the payment was going to come out. They did have to think about it. It was just one less thing that they had to do.
So these types of things, although they’re benefiting us and our businesses, it’s also making our clients lives easier. And that’s really important. So taking credit cards, using contracts, using retainer fees, all of these things had huge benefits for your customers. It’s just a matter of you position it correctly and feeling confident, explaining it.
Well, I hope this was helpful. And I hope you have a lot of success getting paid upfront and never have to chase the client again for payment.
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