Are you getting a percent of money up front? If not, why not?
They say “Cashflow is King” and it can really help to get some, or all, of your money up front from your customers. This means you can run your own company smoothly, without worrying where the next penny is coming from. It’ll make life less stressful and allow you to focus on what you do best.
Take Control of Your Cashflow
Taking payment up front gives you options to invest in the growth of your business. You may need to buy in tools or products to fulfil your customers orders. As your business grows, you may need to take on extra staff.
Think of a gardener buying a lawnmower to fulfil the customer’s request to have their lawn cut every month. Or perhaps a carpenter, electrician or mechanic, who need to buy recurring products, such as wood, wiring, tyres etc. In the case of the gardener, the lawnmower is just one cost, there’s also transport, fuel, insurance, potentially extra staff and accounts and admin costs. Office based work will also have overheads that need paying regularly.
Just as you have your own customers, you are also a customer of your Internet provider, heating, lighting and water suppliers, all who need payment from time to time. They won’t care you’re owed thousands from a customer who hasn’t paid yet.
Build a Professional Reputation
By asking for whole or partial payment up front, you set yourself out as a professional business, someone not to be messed around with. If you clearly set out your payment terms and uphold them, you will earn respect for the product or service you are offering. You raise your business above the cowboys and build trust between you and your customers. They know where they stand and you know you’ll get paid.
The Solution is Simple
Even if you don’t like asking for money up front, just consider the consequences, firstly if you do get some or all of your money up front, what would that mean to you? Then consider what happens if the customer pays late or doesn’t pay at all.
The last thing you need is to be chasing for money as eventually it will detract from the service you are offering. It can be better not to have a customer than to have a bad paying one.
What actions can you take?
Make sure your contract states what percentage you will be taking up front.
Make sure when you are on-boarding new customers make sure you clearly explain that you will require some money up front.
See my testimonials page to find out how I’ve helped my customers move to getting payment up front.