Might be useful to see our own Terms, they're still online here:
www.silktidestudios.com/tandc
We always charged 50% upfront for anything over £1,000 (about $1,600). Projects over around £20,000 usually had three way splits.
Of course some bigger contracts (esp. government) insist on their own onerous terms but usually they're decent payers.
Hmm. Perhaps I should write an article on getting this too...
a) Look at our portfolio and call our existing clients, b) that we do most of our work in the first few weeks of the campaign so it is only fair to pay that high of an amount, and c) I don't want to have to pause the campaign to wait for a check, it just ruins the flow.
I have not really changed our contract in 10 years. It used to just be me and now we have 13 full-time, a few part-time and a few freelancers. So I know it can work and expand the business.
I really think that 50% is needed to start. It helps weed out clients that are hoping to get funds, or get free ideas, once the project gets going. It shows both sides are serious in committing their time and effort.
If you want, I can send you a sample contract. It is US law based, but the ideas are the same for your law. Just fill out one of our contact forms with your email and I can hit you back with the PDF.
Would it be correct to say that dealing with clients takes some 'back-bone' to have the courage to say no and to turn stuff down.
I won’t go over all the articles points; I think it is well written. I am a bit envious that they have a product to transition too. However, I will point out two ways to help small agencies deal with clients. Specifically on how to take payments and whether to accept certain clients. Both of these areas will help alleviate stress in running the business.
1. Not getting paid. To fix this issue simply demand more up front. We start projects at 75% due. Have done this for 10 years now. Larger contracts, over $15,000, we will start with a 50%, 25%, 25% split. We have never started a project for less than 50% of the entire.
The key is that you never work on collection model. Never send an invoice for work completed. You always are working from your funds you have, so you are never at a loss.
Sure some clients balk at the higher up-front costs, but do you want those clients? Stick to your guns. If a client likes you and your portfolio, they probably will sign even if it means a bit more upfront costs.
2. Owning your time. We get our fair share of "interesting" clients, but have found a way to weed them out in the sales process. This way we only work with clients that we like and want to help. Key tips that it will be a "interesting" project and you may want to pass:
- Wanting to change our standard contract. Our contract is a short 1-page that is really fair to both sides. The more they change the harder the project will be, always. Stick to your contract. - The client needs to start, now, now, now. Basically someone internally has dropped a ball in scheduling and now it is your problem. Charge more to help them or pass on the project. - Disorganized email chains and hectic meetings. The client won't suddenly become organized during the project, which means you are now their organizer. Have fun with that project if you accept, but charge more for project management.
Anyways, I think going the product route is great for web agencies. But you can make a successful agency model work and have fun, we have for 10 years now.