What kind of advance payment should I take?

At the beginning of my freelance journey, the answer to this question was clear: “The main thing is that the client agrees to work with me! Obviously, the less I ask, the higher the chance that he will want to try. The ideal option is not to take advance payment at all.”

When estimating hourly, I did not take any advance payment. He did the work, submitted a report on the hours spent and received money based on it. And with a project-by-project payment, he split up the payment, starting either without an advance, or for twenty to thirty percent of the total amount. The remaining payments - never more than three payments within one project - were already divided depending on the client. Most often - two, less often - three.

I worked this way for several years and in the process learned to follow one important rule in prepaid projects.Do not start work until the advance payment is in my account. What is this connected with? There were cases when a client and I entered into an agreement, I started work without waiting for an advance payment. Time passed, but the money did not come and did not come. I was starting to get nervous and worry that the customer wouldn’t pay anything. Every approach to work became a real challenge because of the thought, “What if I’m working in vain now?”

At the same time, in practice, my fears were never confirmed: clients, although with delays, paid regularly. And yet it was uncomfortable to work in such conditions. To avoid them, I introduced this rule.

By the way, there was a case when I did work for free, but the fault was entirely on my side. We had already agreed on almost everything with the potential client, and I was sure that the project would definitely go into production. However, the agreement has not yet been concluded. Our conversation took place on Friday, I decided to work on Saturday and Sunday and start working on the project in advance (later, of course, I learned to relax on the weekend, a separate chapter about this). And on Monday morning, a potential client appeared with unpleasant news: he decided to refuse cooperation. This is how I got the experience of free two-day work and an important lesson: not to rush in matters that require preliminary approvals.

As the years passed, I began to feel more confident in terms of money, there were more clients, and I decided to try asking for fifty percent prepayment and fifty percent postpayment. And he worked in this mode until the beginning of 2016.

In 2016, I got a client whose project I valued at 350,000 rubles. We concluded an agreement, I received 175,000 rubles in advance payment and started work. Everything went well, the client’s representative was satisfied, I completed the work on time, sent the closing act, but never received the remaining fifty percent. During work, I communicated with the client’s representative, but another person was responsible for payments. And this other person turned out to be dishonest and decided to “dump” me. I talked to him on the phone four times, listening to either promises or reproaches (“I said I’d pay, so I’ll pay! Don’t you believe me?”), and I finally just gave up.

I concluded that the only way for me to avoid a similar scenario in the future would be to pay 100% in advance. Moreover, looking back, I realized: I have already worked with a couple of hundred clients and there has never been a case when I deceived someone. And if so, why should I take the risk? Thus, another rule appeared in my arsenal:work only on 100% prepayment. To this day, to my surprise, I have yet to meet a client who would refuse a deal because of these rules. At this point, I will once again draw the reader’s attention to how important it is to find out the reasons for certain decisions of clients and to be interested in their opinion about their work, and not to make guesses.

Also in 2016, I got my first serious experience of ordering my own services from other performers. That is, he himself found himself in the customer’s place. And I learned a lot of new and interesting things. In terms of money, I was guided by the amounts that I requested from clients when I acted as a performer, and they were significantly higher than the market ones. It was decent money, and I didn’t want to pay less, because I saw some kind of injustice in it (in recent years, this view of mine has changed, because I’m ready to pay, but I haven’t met performers who provide the same level of service as I myself...).

When I was told amounts that were several times smaller than expected, I automatically felt there was some kind of catch in this, and the desire to work with these people decreased. I thought that perhaps they simply did not have enough experience and made a mistake in their judgment. And so I realized the hard way thatlow cost does not always increase a potential client’s desire to work with you. Especially when it comes to complex and lengthy services.

The same surprise awaited me in the area of ​​prepayments.When performers offered to start work without prepayment, I understood that in this way they made it easier for themselves to refuse cooperation at any time.

I myself prefer to pay in full in advance in order to immediately fulfill my obligations under the contract and not think about it anymore. Money does not play a decisive role for me, because if the transaction amount is too large and I need to give away a significant part of my capital, it means that I am not yet ready for this transaction, and splitting it into payments will not change the situation. I also understand that there is always a risk of losing this money. No one is immune from fraud, unfortunate circumstances or even an accident, such is life.

And it turns out that what I’m more afraid of than losing money is the scenario in which the performer does not finish his work to the end, because in this case I lose the most valuable resource in my life - time. One hundred percent prepayment helps reduce this fear. The performer knows for sure that I will not ditch him, and will work calmly and, perhaps, more responsibly. If I had not been in the customer’s shoes, I would never have understood this. But the scenario with the loss of an advance payment, although scary, is much less so.

The same applies to splitting payments. Paying multiple bills at different times adds extra work. It’s easier to pay once at the start and go about your business with a clear conscience.

Unfortunately, more often I met performers who lowered prices, worked without advance payment and split payments. In the absence of a choice, I had to work with them. However, when occasionally I was able to collaborate with people who took one hundred percent in advance, confidently voiced the terms of the deal and were not afraid that I might not like these terms, I felt that everything was fine with them with their clients and that they considered themselves good specialists and valued their work. It was more pleasant to work with such people, and I regularly contact many of them to this day.

Of course, there are always exceptions to the rule, and sometimes I have encountered overconfident performers who were excellent salespeople but terrible professionals. It is especially dangerous to work with such people within the framework of services that I have absolutely no understanding of.

Another point that I only learned about as a customer. I came across performers who named the cost of the work, which was within my means, and then it turned out that I would definitely need to spend more money if I wanted to complete the job. A good analogy would be a cool, inexpensive children's electronic toy that doesn't come with batteries. It seems that I bought it and am satisfied, and then I come home and realize that I will have to go get batteries and then change them every three days. If I wasn't warned about this in advance, I feel cheated.

In this situation, the freelancer needs to make a decision: openly tell the customer about all hidden and future payments, realizing that this may scare him away, or keep silent about some nuances, understanding that the client will pay now, but in the end will remain dissatisfied and is unlikely to ever contact again.

As a result, as a freelance performer, I adhere to the following rules regarding prepayment:

• Request 100% advance payment;
• Do not start work until the money is in my account;
• Before announcing the price, give the client full information about the upcoming costs of the work: do not remain silent about non-obvious stages and payments and, if possible, name their approximate cost before the start of cooperation;
• Do not spend the advance payment until the deal is closed.

The importance of this last point cannot be overstated. An unspent advance is a guarantee of freedom. Many times I found myself in situations where I received an advance payment, spent it, and then it turned out that this client was difficult to work with and that I really wanted to “jump off” the project. And it’s one thing to work in such conditions, realizing that I have the physical opportunity to return his money and say goodbye, and another thing - that there’s nowhere to go. In the first case, it is much easier to defend your rights, have a strong negotiating position, and complete the work in more comfortable conditions. And in the second, you think more not about yourself and not about the quality of the project, but about how not to upset the client so that he does not “fall off”.

The ability to return the prepayment at any time is not at all a reason to return it. This is simply a guarantee of peace of mind. When I walk through a store with some expensive equipment, I feel much better when I know that I can buy it at any time. And this does not mean at all that I will do such a rash act. But when I see a price tag that I can’t pay without a loan, I feel uncomfortable, rush to leave the store and start thinking about what I need to change in my life to get out of this situation.

At first, when there was no money, it was very difficult to keep the advance payment intact, and I often found myself “hostage” to the project. But when I finally got out of this situation and acquired a financial safety net, the issue resolved itself. And I am very happy for those who learned this simple truth at a young age, and I sincerely wish to overcome this life situation for those who are still living from paycheck to paycheck.