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For new clients, I always do 50% up front. There’s no way I am doing a month of work on a handshake and a signature.



As far as I know, doing this is utterly routine among big-ticket consulting firms.


Oh, I guess they just call it a retainer. I guess I've never bothered.


No, I'm not talking about a retainer; in fact, a retainer is almost the opposite arrangement, where you take payment up front for a bucket of hours to be used (or lost, gym pricing style) over the period of engagement.


“Discovery” fee, of around 10%

Then paying 30% at three intervals during the project


Which is routine -- charging 50% up front?


Working for a month without prepayment, invoicing, and then waiting 3-6 months to get paid.

I fully understand that people starting out in consulting work don't want to do this, or can't. That's OK. But I don't think it's a good idea to build this constraint into your practice as a principle; it will keep you from growing your business.

The way Jeremy and I started Matasano --- it's probably more accurate to say the way Jeremy started it, since he's ultimately the person who founded Matasano, back when it had its original name, for his cat --- was to do "serious" consulting projects on the side while working a full-time job. I don't think he was taking prepayment for those projects, and if he was, I sure didn't see any of that money. So that's one way to maybe start consulting without depending existentially on up-front payment.

I also understand that there is a class of client --- one I think people new to consulting believe is much easier to acquire --- that can't reasonably be trusted without prepayment. I agree that's a thing, too. If you need these clients to boot up, that's fine, and I'm not dragging people for taking them. But here's a constraint you should build into your practice: your mid-term goal should be to say no to these clients, full stop, not trying to find a way to fit them into your pipeline.

Also: I can only tell you what's worked out for me and the weird group of people I know. I feel pretty confident about this stuff as business advice but I could obviously be wrong. I'm not going to waste everyone's time tediously disclaiming that though (this one tedious disclaimer excepted).




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