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moose
Posts: 200
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From: Plumpton NSW Australia
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Deposit or Not? - 4/16/2003 9:39:22
Aah, start one thread, why not start another.... 
How many of you charge a deposit when you sign up a client? Do you give an amount of time for the deposit to be paid? How much deposit do you ask for?
Am interested as we currently don' t charge a deposit, but this can lead to clients taking forever and a day to get started on sending stuff through for a web site to begin construction. Also, do you think charging a deposit speeds up the whole process - because they then have $$$ invested.
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http://www.wildpurple.com.au
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erinatkins
Posts: 3072
From: Mechanicsville VA USA
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RE: Deposit or Not? - 4/16/2003 9:51:48
Moose,
Yes you should get a deposit.
I started out not getting a deposit but a few customers - necessitated getting one.
What happens if you design most of site & they decide to change whole format or decide to go with someone else?
What happens if you do not get paid?
When a customer pays something upfront - they seem to get moving quicker - normally.
If I have any upfront costs - they have to pay that ASAP. 1 deposit of 1/3 - 1/2 seems fair.
Erin
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abbeyvet
Posts: 5094
From: Kilkenny Ireland
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RE: Deposit or Not? - 4/16/2003 9:52:14
quote:
How many of you charge a deposit when you sign up a client?
I do, Always
quote:
Do you give an amount of time for the deposit to be paid?
Deposit to be paid before work commences, quotes valid for 30 days.
quote:
How much deposit do you ask for?
Generally one third of the quote. It varies though. Some sites are sort of inplemented in a phased way, so it might be one third of phase one. Some people like to pay a deposit in round figures - so I round it UP to the nearest 100. But in or about one third.
Yes, it speeds it up generally, once they have an investment in it it does focus minds.
More importantly though it protects you. What if you spend time creating a layout/template, working with images and so on and then the client says they hate it and are going with someone else? Without a deposit that time is lost money.
< Message edited by abbeyvet -- 4/16/2003 9:52 AM >
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Thomas Brunt
Posts: 6220
Joined: 6/6/1998
From: St. Matthews SC USA
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RE: Deposit or Not? - 4/16/2003 11:45:46
I try always to split design project payments into 3 installments. The first third (design proposal) must be paid before any work happens. The second installment (construction fee) is paid when the design is approved. The third installment (publishing fee) is paid when the finished site is approved.
It helps sell the project when you explain that the client can get out of it after the design proposal phase if she/he wants to. Clients are often nervous about the designer' s ability to create a design that' s right for them. Paying for the design proposal separately limits the risk on both sides of the table.
I don' t think any web developer should ever begin a project for a client with no money in hand. I' ve never heard of anything good coming from that way of doing business.
t
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EWD
Posts: 1052
From: BeauFlow, NY
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RE: Deposit or Not? - 4/16/2003 17:51:06
I always get a deposit and a signed contract before doing anything other than meeting witht he client. Deposit I ask for is the lower of 50% or $1,000. I have never had a client balk at that. I think serious business people expect contracts and deposits.
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davids
Posts: 211
Joined: 1/26/2003
From: Belgium (American)
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RE: Deposit or Not? - 4/16/2003 19:27:42
Hmmm... I like Thomas' method. I usually ask 50% on commencement (payable within 10 to 20 days, depending on the timeframe of the project) and 50% on the agreement that the work has been performed or by a certain period (like 90 days), whichever comes first.
On a larger project, with more complicated deliverables, I would modify this to protect myself and reassure the client. Something like 40% on signing, 40% on delivery, 20% of final approval.
I think the point should be that payment should correspond to the fulfillment of deliverables. The one time I didn' t work according to a signed agreement and deposit is the project for which I am still trying to collect payment.
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International Relocation Technology
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dgrant004
Posts: 27
Joined: 9/11/2002
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RE: Deposit or Not? - 4/16/2003 21:59:25
Like some of the other posts, my terms are 50% of the project cost as a down payment prior to initiating any work.
I' ve used the same verbiage for a couple of years in regards to the balance. " Balance due only upon acceptance of project by client."
I' ve found it takes a bit of the edge off clients who may otherwise balk at a 50% down payment.
Worth noting, in the last several years, I' ve not had any uncollectable recievables.
There' s my $ .02
Cheers,
David
ReWritables Profesioanl Web Services
www.ReWritables.net
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Jeff Huckaby
Posts: 27
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RE: Deposit or Not? - 4/16/2003 23:03:19
50% Up front, remainder due 15 days after we go " live." Gets them to buy in and get the content to me. I give them a 30-day 100% guarantee on design/development/hosting.
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BigBlue
Posts: 130
Joined: 1/31/2002
From: Murrieta CA USA
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RE: Deposit or Not? - 4/17/2003 0:06:53
The company I do some development for provides fixed price quote based on an hourly rate x hours estimated, BUT.... they provide a 30% discount to customers who prepay the entire amount.... and almost all customers choose that option.
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SerenityNet
Posts: 1391
Joined: 6/12/2001
From: Allen, TX, USA
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RE: Deposit or Not? - 4/17/2003 0:12:48
As a hobbiest, I only do what most professionals would consider simple sites. Yet even as a hobbiest, I present my web work (unless it is gratis) as a business. I' ve had good success with...
1/3 upon completion of project scope (" contract" ).
1/3 upon upload of design to a test or proofing URL. (If customer chooses to terminate without payment then they get nothing. If customer chooses to terminate, but pays the second 1/3 then they get a CD with everything done to date.)
1/3 upon final approval. (Upload and ownership to customer' s URL only after payment. No payment - no upload - no exceptions.)
I also provide a pricing guide for " extra features" . When (as it always does) feature creap occurs then it is 2/3 the price of the feature paid before anything is done, with the remaining 1/3 paid upon final approval.
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LarryMcJ
Posts: 80
From: Chesapeake VA USA
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RE: Deposit or Not? - 4/17/2003 3:22:16
I wouldn' t consider working without a deposit. I get 50% upfront, non-refundable, and have never had a customer complain about this yet.
LarryMcJ
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smcfarland
Posts: 715
From: US
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RE: Deposit or Not? - 4/17/2003 7:27:13
Interesting and helpful thread. I work with a lot of new WAHM businesses, so I go based on their budget. Many of them have been ripped off by people and are happy to find me.
For some, they pay all expenses up from and $50 down and $25.00 per month for hosting/design. I will bill them hourly for maintenance at $25.00 per hour. Granted these are mostly ecommerce, where I set it up and they add products. Usually a few hours of my time at best.
For large sites that take more than 40 hours, I do the 1/3 as many others do. For smaller projects of 20-40 hours, they pay 50% up front and 50% net 30. I do this because I do search engine marketing as well and they usually have orders to pay for it by then if they are a start-up.
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_gail
Posts: 2878
From: So FL
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RE: Deposit or Not? - 4/17/2003 8:07:11
1/3 - 1/3 - 1/3 (hosting and domain registration paid in full up front and not included in the first 1/3 deposit)
I thought about 50-50 for some time but personally did not like the idea. In the many years of experience as owner of a couple of small businesses, I' ve had few clients bail. The 1/3 scenario gives me a better chance to find out if that will happen. I' d hate to complete a job only to find out I' m not getting paid 50% of my work.
I think the 1/3 route is also comfortable from the client perspective.
The only time I' d go 50 -50 is if the job was only for a couple hundred dollars.
btw, other than preliminarly consultation and related information gathering, no depositie/gail no workie
gail
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ladyweb
Posts: 6
Joined: 2/5/2002
From: Greensboro NC USA
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RE: Deposit or Not? - 4/17/2003 8:49:06
Yes!
We require a 50% deposit of the quoted price, with the balance due before we take the site live. Of course, there are certain cases where we negotiate this, but we always get something upfront before we begin.
And, we always have the client sign a contract stating the price we have quoted, payment terms, projected time for the project as long as the client provide the information in a timely manner, specifications of the site, and other information we feel is necessary for the particular client.
We found that once they pay money, they also work with us better to get the site completed by providing us with the information necessary.
And, if we run into a problem with the estimated deadline coming up and the site is not complete due to information not being received from the client, we discuss this with them to make sure they understand.
Rule of thumb for us ... keep the communication open at all times with the client.
This all learned from experience ... the hard way!
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