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Deposits – It’s your fault if people won’t pay them


Reasons to take deposits:

  • It’s not your job to bank roll their home improvement project
  • It is unfair for you to take all the risk in the deal
  • Customers who pay deposits are less likely to cancel
  • Customers who pay deposits are less likely to pay late at the end of the job
  • It helps your cashflow and the financial health of your business
  • It shows the customer you value your own time and skills

Times you could get away with not taking a deposit:

  • When you have a long standing and trusted relationship with the customer. And over the course of this relationship, you have made enough profit to cover any losses you may incur if they don’t pay.

Main reason people don’t take deposits:

  • Scared of losing the potential customer.

How can you combat this fear?

The first thing you need to realise is that good customers will happily pay deposits. I’ve spoken with hundreds of decorators across the country who have no problem taking deposits. And if they can do it, so can you.

If your customers are unwilling to pay deposits, then you need to take a look at your business from an outsiders perspective.

Ask yourself: Why someone would be reluctant to pay me a deposit? Is my business attracting the wrong type of customers?

The only legitimate reason someone would refuse to pay a deposit is because they don’t trust you to carry out the work once they’ve given you the money.

And before you say ‘but my competitors don’t take deposits!’

Customers are going to have to pay the money eventually, so whether or not your competitors take deposits makes no difference.

Imagine you were hiring a tradesperson. What factors would make you trust them enough to pay a deposit?

Here are a few things you might look for:

  • Sign written vans
  • Company logo on work clothing
  • Reputation / recommendations
  • A clean and professional website that includes up to date contact information
  • A registered business address
  • Online reviews
  • A social media presence
  • Adverts in local magazines / newspapers
  • Listings on websites such as yell.com

If the tradesperson had all these things, you’d be very likely to trust them with a deposit.

If they only had 1 or 2 of them, you’d be more wary and less likely to trust them with a deposit.

So, to sum it all up…

If the customers you are attracting are unwilling to pay deposits, don’t complain and blame it on the area you live in.

Think about how you could make your business look more trustworthy and start taking action.  


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