Reducing your exposure.
WHY TAKE A DEPOSIT
It confirms commitment It covers your initial costs A customer who will not pay a deposit is a warning
HOW MUCH
Enough to cover materials and initial work.
A third to a half is common for project work.
WHEN TO TAKE IT
Before starting. Not after.
STAGED PAYMENTS FOR LARGER WORK
A deposit, one or more milestone payments, and a final balance.
WHAT TO TIE PAYMENTS TO
Deliverables, not dates.
"On delivery of the draft" is clearer than "at the end of month one".
WHAT TO STATE
Each stage, what triggers it, and how much.
In your agreement, before starting.
WHAT TO DO IF A STAGE IS NOT PAID
Stop work, having stated in advance that you will.
Continuing unpaid work increases your loss.
FOR CUSTOM AND MADE-TO-ORDER GOODS
A deposit covering materials is standard and reasonable.
WHAT TO AVOID
Starting substantial work on a promise.
