Tell me more ×
Answers OnStartups is a question and answer site for entrepreneurs looking to start or run a new business. It's 100% free, no registration required.
up vote 1 down vote favorite

As some of my earlier questions point out, I'm a web design enthusiast and am hard at work to launch a small company, myself being the single employee.

I had a simple question: how do I charge my customers?

After doing the work, and after the calculation of the price (the method of which I'm still debating), what's the process of my receiving the payment?

Would they write a check and send it in the mail? Would I set up a Paypal transaction? Or should it be up to the customer?

Thanks for your help.

share|improve this question

4 Answers

up vote 1 down vote accepted

Here's what I do:

  • 50% deposit up-front, non-refundable.
  • 25% deposit after the design mockups are complete.
  • 25% before the site is transferred to the client's server. They can preview their site on one of my servers before then, but this prevents any late payments or having to chase a client for money.

I generally allow our clients some flexibility in payment, but here are some factors that you need to consider:

  • Accepting payments via PayPal or credit card will usually charge around 3% of your total transaction. It's removed from your amount, not added to the client's. Bill accordingly.
  • Checks can bounce, so you may want to make sure a check clears.
  • Some banks will charge transaction fees.
  • You need to make sure you charge the appropriate amount of tax or you'll be in trouble with your local tax agency.
  • Taxes may vary depending on where your client is located.
  • Always, always, always have a contract in which the exact amount of the project is clearly specified. You should also state in writing that additional work beyond the current project scope will cost extra.
share|improve this answer
This deposit business sounds great...especially for me, considering I'll be guaranteed the payment very soon. Now, I'm only 14, so would there be any legal restrictions regarding age? – Purmou Aug 15 '11 at 9:12
Ask a lawyer or cour local chamber of commerce. Likely there is a restriction in the form "no business allowed". Point. You cant own it, you can not sign for it. Period. Game over. Wait until you can. – NetTecture Aug 15 '11 at 9:38
Depending on where you live, you might not be able to enter a legally binding contract. If your parents know any lawyers, it would be a good idea to have a chat with them. Also, unless you already have done sites for clients or have sites lined up, I'd recommend building a portfolio up of at least a few sites. – Virtuosi Media Aug 15 '11 at 9:41
You might be able to have your parents own the company in trust for you until you're of legal age. – Virtuosi Media Aug 15 '11 at 9:42
@Virtuosi Media: My parents know that I want to start a web design business, but we never actually looked into the legal side of it. I'll definitely ask them about owning it in trust until I'm old enough, as well as for the lawyer. Thanks again! – Purmou Aug 15 '11 at 10:11
up vote 1 down vote

I get 50% upfront (I accept paypal or check) and the balance when it's done (site is posted at a temp location ... doesn't go live until they pay in full.

The calculation of the price... your hourly rate is $65 per hour, $55 for 501c3 if you like, because it's a number they're already familiar with as it's the common rate of a garage mechanic and they will be willing to accept your skill sets are in the same ballpark.

The number of hours you need to make the site is up to you ... modify the hours instead of the rate. If you're not very experienced I'd simply halve the hours for your estimate ... if it really takes you 20 hours, give an estimate for 8-12 and that's a very reasonable $650 job for two days work which is pretty good if you're a starting our 14 yo web designer.

share|improve this answer
up vote 0 down vote

Firstly with web work it is good practice to get a deposit up front for work, you will be suprised at how long it takes for customers to pay you for your work. 25-50% is a sensible deposit range.

You would produce a quote for the full amount and in your proposal point out the two payments they need to make.

Send an invoice for the deposit incorporating the payment methods you accept before starting any work:

  • bank transfer (include your account details)
  • cheque (include your postal address and name of payee)
  • Paypal - not sure how popular this is for businesses to pay with but no harm offering it as a method of payment if you dont mind the fees

Once you have completed the job provide the second invoice for the remaining amount.

share|improve this answer
up vote -1 down vote

Take 3 steps back, go to yoru chamber of commerce and make an into into running a business. If yuo can not even envirion how people pay you (although you likely have paid a lot of companies in your life) - you are wrong running a business. BETER LEARN. DOnt ask in forums here, I am sure your chamber of commerce has nice intro courses.

In general, yuo receive payment by telling customers to pay in one of some specific ways. I am sure you have heard of such advanced financial concepts like "bank account". You should get one. People then can "transfer" money to it, sometimes called "making a wire transfer".

If you are smart enough to type your bank coordiantes (account, bank name) on an invoice without making an error, the customers payment will even arrive in your account.

Some businesses accept cash, but this is mostly shops (i.e. not really applicable). Checks are not really used anymore in most civilized countries outside the US which still seems to have a hack for mailing checks. I have not dealt with a check in 30 years or so. I also would not deal with any company demanding a check, but then I am not in the US.

Paypal is an option, too - b ut be carefull to google around 15 minutes to see about the pitfalls it has.

share|improve this answer
Chamber of Commerce? I'm only 14... – Purmou Aug 15 '11 at 9:05
2  
Well, either you are legal age for runnin abusiness, or you have no business doing so. Running a business is not about getting paid - it is also about legall being able to do so. YOu can not launch a company without the legal power to do so. – NetTecture Aug 15 '11 at 9:25
I thoroughly disagree with the tone and sentiment being used here. @Purmou is doing the right thing, by researching and asking questions. The correct advice would be to discuss with parents, chamber of commerce and a local business lawyer, to find out what he/she is able to do, within the bounds of the law. – Nick Stevens May 20 '12 at 13:21

Your Answer

 
discard

By posting your answer, you agree to the privacy policy and terms of service.

Not the answer you're looking for? Browse other questions tagged or ask your own question.