March 21, 2020
How To Successfully Negotiate Upfront Payments in 5 Steps
Upfront payments are a type of transaction in which a customer pays for part or all of a service before completed. Although it can be stressful to negotiate your first upfront payment, it’ll become easier in time.
Benefits of Upfront Payment TermsThere are numerous benefits of negotiating upfront payments, including:
- Builds Trust: An upfront payment can build trust between you and your customers. It’s a guarantee that upon completion, you’ll receive the full payment.
- Improves Cash Flow: Cash flow can be a huge issue, especially if your services translate into many long-term projects. With upfront payments, you won’t have to worry about late payments or the stress of not getting paid at all.
- Covers Out-of-Pocket Expenses: Most projects require expenses like supplies, software, and labor costs. If you receive partial or full payment upfront, you’ll be more likely to afford these expenses, and have additional working capital to spare.
How to Negotiate Upfront PaymentsIf you’re new to negotiating upfront payments, rest assured that it’s not that difficult. Once you start negotiating upfront payments, the process will come naturally to you.
1. Be ProfessionalThe reality is, we live in an information age. This means that a client will likely conduct research about your business in advance. For this reason, it’s your responsibility to create a professional online presence. Make sure your social media profiles and website are professional, displays positive reviews, and include your contact information. In addition, you may benefit from creating profiles on third-party websites, such as:
- Angie’s List