Is it normal to ask for a deposit?

What is a deposit for a service

An optional part of the sales process, a deposit is a specified amount of money (usually a percentage of the total amount) that is paid upfront in order to ensure that the sale will go through and that the products/service will be provided. A deposit is paid by the buyer to the seller before a sale is completed.

Why do people ask for a deposit

When you ask for a deposit before a job starts, it ensures that you have the cash to cover your expenses before the job is done. This is especially handy when it comes to long-term projects or jobs that experience delays.

Why do customers ask for a deposit

It not only protects you against a possible loss, but the more invested the customer is in the project, the less likely they are to cancel down the line. The project is expensive. Some projects have high up-front costs. Asking for a customer deposit ensures you have enough cash on hand to purchase necessary supplies.

How much should you ask for a deposit

The exact deposit amount contractors ask for upfront varies and is especially dependent on the size of the project. For relatively small jobs, like a $16,000 bathroom remodel, contractors may ask for a 50% deposit. For large jobs, like a $100,000 full-home renovation, a 10%–20% deposit is more typical.

How do you politely ask for a deposit

Be clear about how much you need for a deposit and why

Calculate the price for your service and how much deposit you can ask for and prepare to stand firm. However much you ask for, be sure you can explain why you need that amount so that your clients can understand the whole deal.

Should freelancers ask for a deposit

Deposits are quite common in the freelance world, so asking new clients for this is standard practice. If they've previously hired freelancers, they should already know this. If the customer is extremely reluctant on putting down a deposit and insists that you do all of the work first, then this should be a red flag.

Why you should ask for a deposit

It not only protects you against a possible loss, but the more invested the customer is in the project, the less likely they are to cancel down the line. The project is expensive. Some projects have high up-front costs. Asking for a customer deposit ensures you have enough cash on hand to purchase necessary supplies.

When should you ask for a deposit

If you've ever put hours of work into a project, only to spend months and months battling for payment, you can likely see the benefit of requiring a deposit. By asking for an upfront fee, you're at least guaranteeing that you'll be paid for part of the work, even if things don't work out.