Mine is the exact same. Other than small parties, any event under $500 I have a $100 deposit.
What is your policy when it comes to getting a retainer from a client?
- Thread starter MIXMASTERMACHOM
- Start date
Mine is the exact same. Other than small parties, any event under $500 I have a $100 deposit.
Associates, this is another good discussion where everyone can learn something regardless of thier DJ tenure. I'm an "old dog" and keep learning new ways, better ways than in the past, of doing things. I find it refreshing that, SO FAR, everyone has been civil and has respected the opinions of others. Another good reason for outsiders looking in to see that ODJT is a sane place to visit and learn. You're NEVER to young or old to learn new things.
I'm old school in many respects but understand why many support the 50% rule and 2 weeks (10 business days) as their policy on Retainers/Deposits. Each area of the country is a bit different from an economic standpoint. True, "big money" does mean EXTRA work, but "little money" also earns our respect to do an outstanding job. Whatever works and that which you are comfortable charging is YOUR way of doing business.
Over the years my Retainer amount has increased from $50 to $100 to $125...and now because of this discussion will become $150. Because I live in a "military town" Active Duty military will continue to be charged $100 Retainer fee. The balance is still due one week prior to the event date. However, in retrospect since I do considerable email exchanges prior to contract preparation and meetings, the $125 Retainer is a reasonable sum to ask for those who have never had face-to-face contact. The theory is for them to realize that to secure the date a certain sum must be paid up front. It does weed out the "tire kickers" too. And, some don't feel quite right sending money to someone they have not met in person; works the same way via telephone. I can only recall twice that a Bride with whom I was communicating by email was adamant about not sending a check; face-to-face meeting. Both events were secured by Retainer at the meeting.
Oh, for those of you who have a "cash flow" problem, I can see where the 50% rule would definitely shore up the checkbook for bill paying. Most often the Retainer is enough to cover my recurring monthly music subscriptions and utilities attributed to the DJ business. It helps to have money in a DJ business savings account for lean times, too.
It's a matter of professional business practices and personal preference what you charge.
I'm old school in many respects but understand why many support the 50% rule and 2 weeks (10 business days) as their policy on Retainers/Deposits. Each area of the country is a bit different from an economic standpoint. True, "big money" does mean EXTRA work, but "little money" also earns our respect to do an outstanding job. Whatever works and that which you are comfortable charging is YOUR way of doing business.
Over the years my Retainer amount has increased from $50 to $100 to $125...and now because of this discussion will become $150. Because I live in a "military town" Active Duty military will continue to be charged $100 Retainer fee. The balance is still due one week prior to the event date. However, in retrospect since I do considerable email exchanges prior to contract preparation and meetings, the $125 Retainer is a reasonable sum to ask for those who have never had face-to-face contact. The theory is for them to realize that to secure the date a certain sum must be paid up front. It does weed out the "tire kickers" too. And, some don't feel quite right sending money to someone they have not met in person; works the same way via telephone. I can only recall twice that a Bride with whom I was communicating by email was adamant about not sending a check; face-to-face meeting. Both events were secured by Retainer at the meeting.
Oh, for those of you who have a "cash flow" problem, I can see where the 50% rule would definitely shore up the checkbook for bill paying. Most often the Retainer is enough to cover my recurring monthly music subscriptions and utilities attributed to the DJ business. It helps to have money in a DJ business savings account for lean times, too.
It's a matter of professional business practices and personal preference what you charge.
I used to think the same way you do till this past weekends disaster. Which I only have to blame myself.
I love DJing and I love people. But I'm in it for the money. I like to help people out because I'm such a nice guy. But all being a nice guy has gotten me is a swift kick in the azz.
I had to learn the hard way to treat this DJ thing like it's a business and not just a way to make some extra cash. Today my motto is damn it where's the money! Lol.
I'm with J Mac on this one. I too am in it for the people. The money is good but without the people, you have nothing. If it's about the money, then it's work and it's not fun anymore - which means I have to go hang up the phones and I ain't about to do that! You can have and run a business that is alot of fun if you let it be.
In 24 years, I've had one issue *knock on wood*.
In 24 years, I've had one issue *knock on wood*.
If it is not for the money then one probably won't make a profit. If one do not make a profit, then it is not a business, at least not in the eyes of the IRS. I choose to do this as a business. Any business involves work. The good part is, it is work which I enjoy doing. I am not doing this for "the people" I am doing this for me, first and foremost, to make a living doing a business that I love. It just so happens that the business and the work involves people, other people for who I have to provide a service. That is my story and I'm sticking to it.
So now my question is how many folks realize you can have an extremely profitable business by focusing on the people instead of the money? In fact, I would be willing to propose that by focusing on people a business can be even more profitable than one that focuses on the money.
The money will always come first in my book! Why? Because one has to set goals, financial goals for the business. After that goal is set, then one has to determine what it would take to reach that goal by the amount of Sales/Gigs etc. So money is the beacon or guide to the success of the business. The people are incidentals.
I just have to say something here. My own payment policy is about as against my grain as it can be. Mainly formulated by advice and reading on here.....granted it works and works well. BUT! We are in a service industry......I have been a service industry for 20+ years as an electrician also. There are bid jobs where the price is set and you know what you're going to get paid....but it is staged out over the project..... There are service calls where we come fix your stuff and send you a bill and you have 30days to pay...... There are estimate jobs.....customer calls you give them a best guess...... Try to keep to your figures if something unexpected comes up you let the customer know and you adjust from there....sometimes the job ends there... But in none of these cases are the final payments given until services are rendered to satisfaction... Even most bid jobs holds a 10% retainer for 60 days to make sure your work was sound. In the DJ business that would be the equivilent to the end of the gig......
And believe you me I understand that if you don't chase the money it will not come easily.....people will try to b*tch gripe and complain their way out of almost any bill at any given time, but it just goes against my grain to be paid in full until services are rendered...
And believe you me I understand that if you don't chase the money it will not come easily.....people will try to b*tch gripe and complain their way out of almost any bill at any given time, but it just goes against my grain to be paid in full until services are rendered...
Dude, financial goals for the business are such a small part of a successful business plan it's not even funny.
Have you ever seriously taken a look at companies like Google, Microsoft, Pixar, Nordstroms, etc? Companies that are hugely successful and profitable. They figured it out a long time ago, if you take care of people first, the profits will take care of themselves.
With all respect, your stance comes from one who does not like spam, junk mail, to be sold by a salesman etc. (These are your own words as per previous posts over the years) so I am not surprised by your answer. Google is a money making machine. Their first priority is to their investors to make money.
Their Marketing (To bring new products to the public), Customer Service (To keep the customers happy and satisfied) and Advertisements (To sell existing and new products) are all geared to reap profits = $$$$$. Build it and they will come....with money. You can't get people unless you have something to offer them. One can be the "Nice guy" all they want but if they don't have the product or service that the customer is seeking, that customer will go elsewhere to someone who has.
I agree, I operated for years with no deposit and full payment at the end of event. I never had a single BAD issue with this... not one. However, this was back in my DJ strictly for hobby day. Then when I made this more of a business, my practices changed a little. Now my policy is $150.00 retainer fee due with signed contract... No date is held until both (retainer fee and signed contract) are received. The balance is due Day of event, prior to the event. I know some people disagree with this, but it has worked for me and NEVER been a issue so far (knock on wood). I have considered making balance due 1 week prior to event, but just do not feel right about it. I also thinks this gives the customer the impression I am more focused on them versus the money, which I am and the way I want it perceived by them. As in this business and most others... "perception is everything".
With all due respect, what you're talking about are the old world business models, ones where the only concern is money. Yes, companies like Google are built to make money and their investors are but one of their many prioities; however, they have found better ways to make their money and it all starts with people.
Do you honestly think if all they cared about was making money they would employ free daycare, education, 5 star chefs serving free meals, free laundry services, the list goes on and on. They've realized in order to be as successful as possible they have to take care of people first.
I hate to tell you, but in this new world of business (especially where our economy is shifting) companies are now being expected to take care of people before profits. The funny part is taking care of people before money is making these companies even more money.
Agree with Ron's take on "perception." Even though the Contract specifies that the balance is due one week prior to the event date, I don't rock the boat. If I had an "ill" feeling about the client, you can bet I'd be calling the first of the week that it was due just to make sure. In those cases they will get payment to me ASAP or have it for me during setup at the day of the event.
It is cheaper for them to offer these perks and keep those employees than have a problem with retention. It is a write off for them, plain and simple. You can either pay Taxes or give away the same money and get thanks for it while using it as a write off. Go check with an accountant and they will tell you.
You think they do those things in order to be nice to their employees? No offense, but I find that incredibly naive. The only reason those items are put in play is ultimately the bottom line. The point of being in business is making money. If it's not about making money, it's a ministry.
You just don't get it do you? While being profitable is still the end goal, the path to that goal is changing. It now revolves around people, not money.
The old business mind:
"How much is it going to cost us to have a 5 star chef cooking for our people and can we write that off on our taxes?"
The new business mind:
"Would our people truly enjoy having a 5 star chef making their meals?"
LOL Sorry but you make me laugh! It is called brainwashing and repackaging. Again, I do not fault you for your way of thinking. There are many like you, some even here on this board. There are a lot of common traits among those who think alike.
Once again, yes profit is the end goal of all business (naturally excluding not/non profits). I'm not disagreeing with that point.
What I'm saying is the path to that profit is changing.
I'm glad I gave you a chuckle, it makes me feel all warm and fuzzy. :tribiggrin:
On a serious note. I've mentioned it before, I work within a school of management where undergrads, graduate students, PhD students and high level execs are taught business and management. On any given week we can have a CEO, CFO, COO, etc here talking about their company. They all have a similar message, every aspect of business is changing. Your business can't achieve its full potential by only looking at the bottom line anymore. You have to look at the people who make up your company because they ultimately determine your company's success. If you don't take care of your people, someone else will and the only true competitive advantage you had will be gone.
This is what I'm talking about. Profits are important, but it has been realized that the path to those profits doesn't lie in tax write-offs or how many dollars can be saved by doing this or that; the path to the profits lies with people.