A Disturbing Trend

I think that everybody is more than aware of what the economy is like right now.  And, if you have read more than one of my previous posts, then I am sure you realize that I am a huge advocate of starting your own business. Not everybody is suited to be a full time entrepreneur, and I do realize that. If you can manage it though, having some kind of small business on the side can be a lifesaver in what could otherwise turn into a financial crisis for you. Especially if you have kids and you bring in the only income in your household.

I have noticed a disturbing trend among some prospective clients and customers lately, that I do feel is worth mentioning. Now, depending on what your business is, a deposit for materials or services may be industry standard. I know that in my main business, it is. Now, if I pull a petsitting job or something, I am not going to require that person to pay a deposit; they simply provide me with what I need to care properly for their pet. On the other hand though, if we are looking at an ongoing technology  project, worth several thousand dollars, especially if it is going to require me to purchase any kind of licensing or equipment for that client…then I do require those clients to pay a  deposit before the job begins.  I usually base this on a combination of my relationship (or lack thereof) with the client, the costs of materials and licensing, the value of the job, and the labor required. In the case that it may be a new client who is cautious about putting down a deposit, I do simply explain the deposit is to offset any advance costs I may incur, and I can always provide professional references if it makes them feel more comfortable.

Lately, though, I have noticed more and more people trying to get the work started before a deposit is received. In some cases, I get incessant phone calls and emails wanting to know if I have started the job yet. In addition to being incessant  they seem to become increasingly rude. My answer, if I have not received their deposit, is always “No, but I have it on my schedule to go on the date you specified your deposit will be here.” Some people proceed to ask, if the deposit is on it’s way, then why hasn’t the job started yet? Again, the “schedule” answer – and the expected deposit arrival date is usually the first available time I have to start a job around other projects. Some people continue to push. Now, if they tell me a deposit will be in my account by 9:00  a.m. EST on the 15th, then that is the start date I put on my production schedule. If that is their scheduled start date, and other projects made it on the schedule ahead of them, that is just the way it is. I do try to treat all my customers fairly, and I am not bumping an established client  off the schedule, only to make room for another. Especially if there is no deposit received.

What kills me about this while thing though, is just how insistent and how rude some of these people can be! And, amazingly enough, even though “the check is in the mail” or whatever, in the cases where people try to bully me into working for them before their deposit gets here…well, suffice it to say that the check never made it into my mailbox! And it seems to be happening more and more lately.  The funny thing is, the customers that are good for the money may ask for references if they have never worked with me before; After they check with my references, their deposits always seem to show up right on time. Same thing goes for customers I have worked with previously, that may be charged a deposit.  Hmmm, funny how that works, isn’t it?

Definitely consider all the factors I mentioned in the first part of this post , especially with your existing clients. If they have been a regular customer, have always paid on time, and you don’t have to buy a lot of materials or anything to take care of them, I think it is probably acceptable to waive a deposit. On the other hand, a new customer, or a customer that has a history of non-payment is usually not going to be worth putting yourself in a bind over.  You do not want to do that job, not get paid, then tell your employees “Oops, I’m sorry, they didn’t pay for their computers, so now I can’t pay you for the installation!” That is not going to work for you, either short term or long term. And, it could affect your reputation not only with people that you do hire, but also with customers. So, use your head, consider all the factors, and don’t let anybody bully you into working for free.  And, if you feel a deposit is needed, then charge one.  And don’t feel bad about it – it’s better to protect yourself than to fail because you didn’t.