Payment at end of every week VS Retainer?

niftyadmin

New Member
Hi All!

I would appreciate your input and opinions on my current scenario.

I have a potential new client starting next week who is guaranteeing me 20 hours of work per week. Because he is guaranteeing 80 hours per month, I've reluctantly accepted a rate that is less than my typical hourly rate.

I operate on a monthly prepaid retainer that's worked into my contract, as most of us do. The client is not willing to prepay and would rather pay "immediately via Paypal at the end of each week for hours worked".

I'm having a hard time accepting this. How would you respond? Would it be fair to respond by asking for prepayment for each the week? (rather than at the end of the week)

I don't want to lose the opportunity but I do need to hold strong on my policies. I should mention that this client was referred to me by someone I trust and who also works with him.

Thanks in advance!
 

Susankelly

New Member
The great thing about running your own business is you get to run it exactly how you want too, the hard part is trying to figure out how the heck to run it!

A few points.... I'll tell you it's meaningless that this client was referred to you by someone you trust... that has no bearing on his finances or willingness to pay you. And the fact that he's been a good payer to your friend thus far, again doesn't mean anything. It is not any kind of assurance that he will pay you or that his business will continue to flourish.

Given that knowledge I'm going to guess that's why he may not want to pay you up front, he might not be sure you'll follow thru, stay in business, etc. I understand that and in the past (twice) I've done a 50% up front and 50% on delivery with a client. But eventually I moved them both to retainer.

Another thing I'll mention is that as great as a 20 hour a week client is, remember there are a few pitfalls. Early on I had a big client that used up a lot of my week, and bingo he went belly up and my income level changed overnight. Since I'm the only support for my daughter and I that was a big problem.

I'm not suggesting not taking him but just be aware of the issues. I now have a 20+ hour a week client so I'm still willing to go that route but this time with knowledge!

So I don't really have an answer for you other than to talk to him and try and find out exactly why he doesn't want to pay up front and then see if you can alleviate those fears for him somehow.
 
Yeah, what Susan said.

Your second sentence stood out for me: How is he "guaranteeing" you these hours? In writing? Does that mean he'll pay you even if he doesn't have work for you? If so, then why isn't he willing to pre-pay?

Also, the fact that this was a "reluctant" decision on your part.

It sounds kinda like a power play to me. It depends on how he approached it, but first, he wants to pay you weekly, not monthly. Then, he wants to pay you after the work is done, not before.

The more things a client wants you to change about your policies, the bigger the red flag gets, to me. Maybe this is what's so troubling to you. And what makes the decision so difficult is that sometimes these requests sound perfectly reasonable on the surface, but what's really happening isn't on the surface.
 
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niftyadmin

New Member
Thank you both very much for your comments. You've both touched on things that are on my mind regarding this matter.

As you can tell, I'm still nervous about this whole thing and I will have to do some deeper digger here. Thanks again!
 

Virtual Alex

New Member
I have been thinking about your situation and let me say, I feel your pain. It's really hard when you want/need the work. You want to get your business going. You have this carrot being held out in front of you but only if you do things his way.

One thing I could suggest is this. Think about it this way. When you go to hire someone, a plumber, a contractor, a graphic designer for your website, whatever it is, they have a set payment method already in place. They tell you what it is up front. Do you ever think to ask them to change it? I never have. So why does he think that it's ok to ask you to change yours? I think it's a red flag.

Now having said this, if you really want to try to work with him, you just have to be prepared that it might not work out. But then again, who wants a client that doesn't pay anyway? You could set up an initial arrangement (like Susan suggests) for 50% up front and 50% on delivery for say the first two weeks. But after that, payment is only accepted up front. Get it all in writing in your contract. Also, make sure there is language in place to define the "guaranteed 20 hours." This way, he can try you out as a VA, and you can try him out as a client. Then you can decide if you even like working with him in the first place.

Good luck!
 
Hi there Nifty:

So glad to be a part of this forum! I'm dealing with some of the same issues and have adjusted my guidelines to help a client. It's tough when we need the work, but I still try to go by my gut (God given) instinct and it should work out. Good luck!
 
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