A couple of times I have been caught out with clients whose business dealings have expired during a logo project for that business. The end result is that I have lost out on a percentage of the total project cost. They may have paid a healthy deposit, but I have generally put in far more hours than the deposit covers.
Typically half way or further, the company hits financial troubles and can't proceed.
Ultimately means you are unlikely to get any further invoices paid, unless you are working with a client who has a fortuitous set of circumstances. The project may just be suspended or it might be executed.
This is a hard situation to fully prevent, unless you have the time and recourses to do exhaustive financial background checking on each client. The alternative is what I always try and do is to secure full payment up front.
As much as some clients have the best set of morals in the world, circumstances like the above can happen out of the blue. Backers back out, something unforeseen in the industry means proceeding would be pointless and any other number of scenarios. If you have put in an exhaustive 2 months work with a 75% deposit, you are still loosing out majorly by not getting that 25%.
The bigger the project the higher the risk for the designer. Again, if you can secure full payment up front, then you are covering yourself. Some clients are more than happy with this arrangement, and I have been fortunate to have worked with many of these myself.
The reality is, asking a client for at least 75% upfront or full payment is NOT unreasonable given the work you are being tasked to do. I can say from experience that full payment is not such a big deal for many clients, so it is worth pursuing hard.
There is the whole 'trust' issue, they don't trust you to deliver and you don't trust them to pay. Can often be a frustrating stalemate. How I deal with this is to just say, 'Look, you came to me. You either trust me to full fill what you want to hire me for, or you don't.' That's not all I say, but it sums up my thinking.
I think it's unreasonable to be nudged into conceding a point that is based on nothing but a general lack of trust. It comes down to them doing the right amount of research into hiring someone trustworthy, if they haven't done their research at this stage, what else have they not researched, the finances maybe? And yes, I am also very cynical.
Role play a banker
If the client has issues with this, and the project is big, like 2-3 months big, then you need to take a few other factors into account. Take time to ask some questions relating to their actual business plan, you need to put on a bankers hat here. You are basically offering a variation of a loan, so make sure you cover yourself as much as you can.
Who is backing the business/venture/start-up, how many partners, who has the final say on the logo design, is the funding secured or is it sill up in the air etc. If the latter is 'still up in the air', then that is pause for thought, it's up to you if you proceed, but don't assume that everything will be OK 2 months from now.
From experience, companies that look to have an untouchable idea can and will falter during the process of a logo project.
An interesting assessment can be made from the clients reaction to filling in your logo design brief. If the answers are less than inspiring, if they appear to be struggling to sum up what they do, how they do it, what their plans are etc, then there is a chance that this same 'blank look' affected them during the creation of their business plan. Not entirely reassuring. It's not something to count on, but it's certainly worth keeping in mind.
Trust your gut, if you have a uncertain feeling about the client or more specifically, the business the client is fronting, then listen to yourself.
Keep pushing for at least 75% or full payment up front, you'll be glad you did.
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