[SPAM] [Hidden-tech] Retainers

[Don Lesser]

I second the idea about retainers-it is always hard to get a company to pay
more when they use up the retainer and to accept losing the retainer if they
don't use it in a set time. 

 

We have given discounts to clients in return for pre-payments on a set
schedule. Invariably, some, if not all, of our bills take up to 45 days to
get paid, whether or not we stay on top of them. I have written into the
current contracts that we can stop work if pre-payments are not received,
but sometimes your client has done his part and is being screwed by his
Accounting dept.

 

At this point, I think that pre-payments are only worth it if there is
enough money involved to justify the additional work in getting paid. 

 

If you go that route, be prepared:

 

.         have the agreement in writing and signed by both parties

.         keep on top of the hours and the billing

.         have some leverage if they don't pay

.         make the payment intervals as short as you can

 

It is nice to get those steady checks, though. 

 

Don Lesser

Pioneer Training, Inc.

14 Bobala Road

Holyoke, MA 01040

(413) 536-1030 (phone)

(413) 552-0472 (fax)

dlesser at ptraining.com

www.ptraining.com

From: hidden-discuss-bounces at lists.hidden-tech.net
[mailto:hidden-discuss-bounces at lists.hidden-tech.net] On Behalf Of Paul
Stallman
Sent: Tuesday, January 22, 2008 11:51 AM
To: 'David Spound'; 'Hidden-Tech Tech'
Subject: RE: [SPAM] [Hidden-tech] Retainers

 

David,

 

We've done it many ways in the past and as a small business I can tell you
it's always a struggle.  While other small businesses, love the idea of
having you on call, they also don't like the idea of paying for extra hours
they don't use.  So it's a constant struggle.  We are looking at doing it
more again with clients to get that constant stream of cash flow.

 

Another option that we've had some success with is buying blocks of time or
budget billing.  You sell a client 200 hours per year at rate of say $90.
If they buy 300 then maybe $80 etc.  You then let them use hours how they
need to, but they pay you at a constant rate of $1500/month.  I wouldn't
reduce your hourly from $100 to $80 for a promise of less than 200 hours per
year, personally.    You can cap the number of hours  in any given month to
say 20-25, if you don't want to do 100 hours in the first month.  What we've
found doing this is most clients can justify the budget billing idea,
because they are getting what they pay for with no one having a better
advantage.  Show them that it's justifiable in terms of payroll, how much
would it cost them to bring in a person and pay their salary and benefits on
a monthly basis.  Your expertise and much lower cost will be very easy to
swallow.  Plus you'll find your clients will use up their 200 hr contract in
6-8 months many times and you'll continue to draw the monthly check from
them.  This also give you justification to sell them a bigger contract to go
forward.  

 

The end result is constant and repeatable cash flow.  Just make sure you
don't let clients miss those monthly payments.  Because with method, you'll
end up front loading the work a lot of times.  Trust me though it's better
than doing a retainer and carrying over hours for the client, because when
you do that, you could end up owing them hours or dollars in the end when
you've already spent the cash they paid you.  

 

If you can find a company that will do a real retainer and pay you a set
amount if you complete the number of hours or not that's great, but those
companies are fewer and fewer today.

 

Paul Stallman

Managing Director

paul at alias-solutions.com

413.364.6147

 

alias|solutions 
How will the world know you?

 

From: hidden-discuss-bounces at lists.hidden-tech.net
[mailto:hidden-discuss-bounces at lists.hidden-tech.net] On Behalf Of David
Spound
Sent: Monday, January 21, 2008 4:09 PM
To: Hidden-Tech Tech
Subject: [SPAM] [Hidden-tech] Retainers

 

Hi all,

I am trying to create a new consulting relationship with an organization,
and I am wondering about the concept of a retainer. When one agrees to be on
retainer, does one receive a set amount of money per month? And, if so, does
one agree to provide a certain number of hours of work? How would that
hourly rate compare to a situation if there was no retainer?

Hypothetically speaking: say I have a client for whom I currently provide
services on an as-needed basis for $100 per hour. I might do anywhere from 0
to 25 hours of work in a given month. I am looking for a way to get more
work on a regular basis. In exchange for some sort of guaranteed monthly
payment, I would be willing to lower my rate. My thought would be to propose
a retainer of $1,200 per month in exchange for which I would do up to 15
hours of work ($80 per hour).

Is that how a retainer works? If the client does not utilize their 15 hours
in a month, do they "rollover" to the next month (that would reduce the
benefit of the retainer agreement to me)? And if the client needs me for
additional work, would I bill them at the new, lower rate based on the
retainer amount (i.e. $80 instead of $100)?

Any advice will be greatly appreciated!

Regards,

David

++++++++++

David Spound, M.Ed.
Valley Mindfulness

(413) 219-0654
david at valleymindfulness.com
http://www.valleymindfulness.com

Programs for Stress Reduction, Health and Well-Being

*	A Taste of Mindfulness:

Introduction to mindfulness-based approaches to health and wellness.
Tuesday, February 12, 6:30-8:30 pm

*	Mindfulness-Based Stress Reduction:

8-week course based on the work of Jon Kabat-Zinn at UMass Medical School
February 26-April 15 (Tuesday evenings, 6:00-8:30 pm)

 

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