When I sold real estate, it was one of the only times in my career that I didn’t get paid in advance for what I was doing. As most people in real estate, I worked on contingency. In other words, if a client didn’t buy a house with me I was working for free. I have a problem with this business model, and I’ve learned since that many real estate professionals these days are…believe it or not…experimenting with different business models, including getting paid in advance. Kudos.
The questions and concerns…
I’ve long been an advocate for getting paid in advance, and often I get questions about this.
- Why do I charge for my consulting up front?
- Don’t most consultants work up front and then send an invoice? Is there a benefit (to the CLIENT) to charging your fee up front?
- Doesn’t charging up front cause me to lose business?
- And then obviously, most readers and clients seem to want to know how THEY can get paid in advance also.
I wanted to address this with you briefly since it’s such a common hang up with small business owners. Look…I know you’d love to get paid up front for what you do, but you might think this isn’t viable. If so, you’re wrong. In fact, you should start charging up front…starting now.
Let me answer these questions one at a time. My goal is to quickly shed some light on this issue, so you can benefit in your business ASAP:
Why do I charge for my consulting up front?
It’s easier for everybody involved. Candidly, that’s how it started. Did I get into business to be a bill collector? No. I am very good at a few things. I can offer you a HUGE amount of value in my area. Everything else I suck at. You know those clients that still owe you for stuff you did 6 months ago? That sucks, right? It’s no fun; that’s why I don’t do it.
I am not going to chase you down to collect what you owe me. I’m just not going to do it. It makes me feel like a schmuck. It makes you an ACTUAL schmuck for not paying me what we agreed upon, and it’s also not dollar-productive to chase down accounts receivable that should have already been received. Why do we sign up for this crap?
There’s an option. Get paid in advance.
Don’t most consultants work up front and then send an invoice? Is there a benefit (to the CLIENT) to charging your fee up front?
Most definitely…most consultants invoice. Let me be candid…I still invoice on occasion. If an existing client or personal friend specifically requests me to invoice them, I will…sometimes. There’s an existing relationship, and that’s what matters to me. I’m not a robot, and I try to be flexible, but I believe strongly in the VALUE of getting paid in advance. If we haven’t worked together before, there are no exceptions. I get paid in advance, and yes…I know this isn’t the norm.
In most industries, it’s true that clients often expect to not pay you until later. So what gives? If clients often expect otherwise, why do I think it’s better that they pay me up front? Because here’s the thing: if you’re not willing to pay up front, you’re probably not a good fit for consulting with me anyway. I suppose if I was working for $20 an hour it would be different. But my consulting clients get massive value; my coaching sessions will save you hundreds of hours of work and give you the tools and techniques you need to make significant strides in your business. In other words, I charge a lot, and my coaching isn’t right for everyone.
When we sit down to go to work on your business, there isn’t any room for doubt or worry or you still trying to decide in the back of your mind whether I’m worth your time and money or not. If that’s the stage you at, that’s totally cool. You’re not ready to hire me, and that’s fine. That’s why I write a blog and give away TONS of free content to help you. You’ll hire me if and when you’re ready, if and when you need what I sell. Until then, I’m more than happy to have you as a reader!
Paying up front is a great value for the client, because it keeps clients who shouldn’t be clients from becoming clients. Hmm. I wonder if I could have said that more clearly 🙂
Doesn’t charging up front cause me to lose business?
Yes, charging up front causes some people to not hire you. It causes these people to stay away:
- Clients who like you but aren’t quite ready to be working with you yet anyway.
- Clients who are just itching to give you a hard time.
- Clients who aren’t going to follow through with what you tell them anyway…and then complain about how your advice doesn’t help.
- Clients you have to chase down afterwards to get paid, turning you into a part time bill collector.
Anyone who works with people one-on-one has dealt with ALL of these issues and then some. Getting paid in advance clears all of this from your plate. Sometimes, losing some clients can be the most profitable thing for your business.
How can I get paid in advance also?
Want to know the trick to getting paid in advance? The trick is that there’s no trick. When a client is ready to get started, say “Great! I’ll make sure you get an invoice for this shortly. You can take care of it at your convenience, and then we’ll get started.” Simple, no?