Working self employed. Can I guarantee payment?

TELLIT01

Concerned75 wrote: »

They are given a figure at that time for the labour. Not materials for or postage as that can change, including what the client wants. The bespoke is making bags/cushions, which are all individually made.
I hope that covers replies of not giving a full quoted price beforehand.

Yes it does thanks. The initial post suggested that no costing was provided at the start.

agrinnall

Concerned75 wrote: »

They are given a figure at that time for the labour. Not materials for or postage as that can change, including what the client wants. The bespoke is making bags/cushions, which are all individually made.
I hope that covers replies of not giving a full quoted price beforehand.

I'm still not sure why you can't give a full quote, presumably you have a price list for the different materials you offer, and Royal Mail (or couriers) will have price lists for various quantities, so isn't it just a matter of feeding in the variables to get a final price?

Concerned75

I don't offer materials.I would source the materials from different places to get the best price for the customer. I don't supply the materials myself, unless they provide their own.

Role play scenario:

Customer: I'd like some cushions made in velvet please.

Me: That's fine. Do you have your own materials?

Customer: No. I wouldn't know what's needed; length of zip, material length etc...is it possible for you to do this?

Me: Of course. I will source what you need and give you a price.

Customer: If there's any changes I will let you know.

Me: The price will alter if you make changes, so I can only give you a rough estimate.

Customer: Ok.

Anyway, straying from the original question, which was to try an ensure a payment, regardless of what it costs in the end. Bar a deposit, is there anything else/type of written agreement that could be implemented?

steampowered

Concerned75 wrote: »

Anyway, straying from the original question, which was to try an ensure a payment, regardless of what it costs in the end. Bar a deposit, is there anything else/type of written agreement that could be implemented?

There is no such thing as a written agreement that avoids chasing for payment.

You can write anything you like in an agreement, but you will still have to chase payment and you will still have to go to court to enforce the agreement if the customer refuses to pay.

The only way of avoiding this would be to do invoice factoring. You can sometimes sell your invoices (and the risk of late/delayed payment) to a finance company, but there will be a fee for this.

shortcrust

I would never ever enter into an agreement where I had to pay an unspecified amount for an unseen product. It's so one sided I think most people would smell a scam.

jamesmorgan

When providing bespoke work rather than selling fixed products off the shelf there are a range of different commercial approaches that can be written in a contract:

a) time and materials - buyer takes all the risk. Buyer will usually want an active involvement in the development process
b) fixed price - seller takes all the risk. Seller usually adds a risk premium (contingency) to cover this.
c) shared risk - eg capped time and materials

All these approaches are valid and depends on the sellers/buyers attitude to risk. It should always be born in mind that taking risk has a price. If you provide a fixed price, the price is likely to be higher than t+m to cover the risk premium.

In terms of payment, again this needs to be negotiated within the contract. If your products have high materials costs, it is not unreasonable to request staged payments to cover these costs as they are incurred. Payment of final invoices are usually linked to acceptance of the delivered goods - the contract needs to have clear acceptance criteria.

Hopefully it is fairly clear that if you are selling bespoke goods, you need to have good contracts in place. If you do suffer non-payment, the contract provides you with the ammunition that you need to take the buyer to court to collect any monies outstanding.

Concerned75

When providing bespoke work rather than selling fixed products off the shelf there are a range of different commercial approaches that can be written in a contract:

a) time and materials - buyer takes all the risk. Buyer will usually want an active involvement in the development process
b) fixed price - seller takes all the risk. Seller usually adds a risk premium (contingency) to cover this.
c) shared risk - eg capped time and materials

All these approaches are valid and depends on the sellers/buyers attitude to risk. It should always be born in mind that taking risk has a price. If you provide a fixed price, the price is likely to be higher than t+m to cover the risk premium.

In terms of payment, again this needs to be negotiated within the contract. If your products have high materials costs, it is not unreasonable to request staged payments to cover these costs as they are incurred. Payment of final invoices are usually linked to acceptance of the delivered goods - the contract needs to have clear acceptance criteria.

Hopefully it is fairly clear that if you are selling bespoke goods, you need to have good contracts in place. If you do suffer non-payment, the contract provides you with the ammunition that you need to take the buyer to court to collect any monies outstanding.

By jamesmorgan

Best answer on here and constructive to what I was looking for. I will bear this in mind going forward. Thanks.