Tired of sending emails like the one below?
Personally, I’d rather not have to ever send out one like this again.
As freelancers, we’ve all had this happen—we’ve ALL had to chase clients.
You submit an invoice, and your client goes quiet.
They stop emailing you, and suddenly you can’t get a hold of them.
And you’re freaking out because your bills keep coming in, but you’re not able to pay them.
Over the past 14 months, I’ve been paid $80,000+ in client fees upfront, BEFORE I started ANY of the work.
Why you should get paid up front
There are some obvious reasons for getting paid in advance:
- You can put the money to use right away if needed
- You don’t have to spend ANY time haggling with your clients over payment
- You can rest easy at night knowing that money is in the bank
The first one is really the most important one. Having cash on hand gives you options and keeps your business afloat.
But aside from the cash-flow benefits, the reason I love getting paid up front so much is this:
It gives me peace of mind.
> No more wondering whether or not the client will back out of their end of the bargain and not pay
> No more wondering whether or not the check is really in the mail
> No invoices that are three weeks overdue
And really, just less time having to think about the money aspect of freelancing and more time concentrating on the work.
Getting paid in advance lifts a huge burden off your shoulders.
But another benefit you probably haven’t thought of is this:
Getting paid in advance makes it virtually impossible that the client will cancel the project. And knowing that gives you some level of predictability to your revenue.
And in the tiny chance that client does cancel, you’ll already be paid, and you can both just move on.
How to get paid in advance
(One caveat: You can’t get paid up front if you’re pricing by the hour. If you haven’t already, consider making the switch to pricing per project.)
To get paid in advance:
– You don’t have to hard-sell your client
– You don’t have to have some intense negotiation about it
– You don’t have to be a “natural” salesman
All you have to do is offer a small discount for payment in advance.
It’s as simple as offering a 5% to 10% discount on your proposal.
I include the discount on the proposal just to the right of the stated price.
Here’s what it looks like on my proposal:
To get the client thinking about it, I’ll often drop a little reminder hint on the client call either before sending out the proposal, or after they’ve had a chance to review the proposal and wanted to go ahead with the project.
Over the phone or in email works just the same. I mention it as part of my process, or “next steps.” But it’s really subtle. I don’t oversell it at all. I just state it as an option that they can take if they choose to. If not, no worries.
I’ll say something like, “How payment works is that I ask for 50% upfront, and the rest on X date. Or, if you pay in advance, I give a 10% discount on the total.”
8 out of 10 clients take me up on the discount.
After they’ve had some time to think about it, this is usually the response:
Here’s another one:
Want the proposal template I use to sell 5k+ projects?
Get the proposal and watch an explainer video of how I use it with my clients.
But if I discount will I lose out on all that money?
After looking at that $80,000 you are probably saying to yourself, “He’s leaving eight thousand dollars on the table!” But really, what’s happening is that the discount is already baked into the price.
Sure, it’s money that I would have made if I were to break up the payments, but I set my pricing with the reduced fee in mind.
When I put together a proposal, the reduced price is the actual price that I’m targeting in my mind. If the client chooses not to take the discount, and instead we do the typical 50% upfront deposit, I look at it as an added 10% fee for the hassle of breaking up the fee into two payments.
I go into writing the proposal with this mindset. I think of the actual price that I want to get, and then add 10% to that. Of course, I don’t share this with the client, but again, to them, there are two options on the table. And the choice is theirs to make.
My price is not based on market pricing so whether the price is 10% lower, or 10% higher, it really doesn’t matter.
There is no real “right” price for what I’m offering. The client has the option to go somewhere else and buy a logo (or website or whatever) for $50, $500, or $5000. So which price is right? There is only what is “right” for that client.
And if you discard the notion of a “discount” and rather look at it as two different options to choose from, it makes a bit more sense.
The way I think of this from the freelancer’s side is as a pre-negotiated reduced price for getting paid in advance. In any negotiation, when you walk into a room, you are going to have a price in mind that you are targeting. This is the price you are hoping to walk out of that negotiation with.
You’re telling yourself, “I don’t want to walk away with less than X amount.” Here, that price is out in the open as a choice for the client to pick on their own and feel happy about getting a price that is 10% cheaper than the alternative.
And, you can always point the client towards that discounted price when they look to lower your price. That way, you aren’t just giving in to the concessions they are asking for. Instead, you are trading something of value (a discount), for something else that is valuable to you (being paid in advance).
The benefits to your business
- Better forecast my business income
- Reinvest in and grow my business
- Be selective and work on the best client projects that come to me
- Focus on doing the best work for my clients
- Have the peace of mind that my bills are paid and I’m not going broke
- Put away several months of income in the bank
That overdue invoice did eventually get paid. But it took nearly 4 weeks longer than it should have and cost me a lot of frustration that could have been avoided.