I’m a self-employed graphic designer, and I’ve got a job coming up where I can make some money on the print job. The print job is going to cost X and I can make around 25%. My problem is that I don’t have the money to pay for the print job.

I have a high street bank business account and it has been in credit since day 1. The client on this project has paid within 14 days on both previous jobs.

So, what are my options, and what do others do in similar situations?

I could arrange an overdraft, but that will surely involve fees.

I can take out a business loan, but I will pay interest.

I can apply for a business credit card, and only pay interest after 50-odd days. I would pay it back as soon as the client has paid, so this could be a good option.

Any thoughts/experience?

Open an account with the printer and ask for payment term that suit your cash flow for the job…

If pushed offer 25% upfront and 30 day to settle?

As a small business you’ll be lucky to get credit of an shape, form or flavour – so choose from what you can actually get. If the margin on the job is 25% then any credit that costs you less than that is a winner. Free is always nice if you can get it but don’t be too proud to pay for credit or even pay a lot for credit if it makes the difference between taking the job and not.

If pushed offer 25% upfront and 30 day to settle?

and perhaps make a similar suggestion to your client. I’ve had some clients give me 70% up front

If you have a business account, you may be able to get a chargecard for the account which then gets paid off each month…giving you 30 days interest free credit, as long as you pay the amount in full. Many banks offer this card for smaller guys so they can’t get themselves up to their eyeballs debt over one month.

Best bet really is iDave’s suggestion – you might find the printers are more amenable to the idea than you think.

I have 30 day credit accounts with my three main suppliers. I’d struggle to run my business without it. Your printer will/should understand this.

obviously infer to the printer that more work will follow… which I’m sure you hope it will

more work will follow

😛

If I had a pound…

Tell your client terms on this job are very strict and, in order to take advantage of the ‘deal’ on the project they have to pay on 14 days otherwise you have no choice but to charge interest (which will then cancel out any interest you are charged).

What happens if the firm the work is for refuses it after youve paid out, or worse goes bust, it does happen quite frequently, ask the firm your working for for a deposit.

Oh and im self employed and its tough.

Unless you have a good relationship already you’d be lucky to get any printer to give you credit at the minute.

Is X bigger than your (personal) credit card limit?

As above, make sure you’re comfortable with the risks – nobody ever made money without taking a risk, but equally no-one wants to see you lose out.

Aside from the risks of non-payment, think about what would happen if payment was delayed for any reason – sod’s law that something will go wrong when you least expect it, particularly if your credit is short-term and you don’t have any contingency.

Good luck with it – hopefully you make a killing 😉

Why not offer your client a discount if they pay up front. Has worked for me in the past. Alternatively a smaller discount for 50% up front.

Be very very careful taking on any debt for ‘promised’ revenues. As people have already pointed out firms can go belly up without much warning nowadays.

I do the same as you and had 3 clients fold in quick succession this year owing a lot of money. Some of which was for print jobs where I’d done the same as you’re proposing. One of the companies was a large multinational that had been going forever. The kind you’d consider ‘safe as houses’.

The result is that I’m now saddled with a lot of other peoples debt. And believe me, there’s nothing more galling than that.

If it was me I’d have a word with the client and tell them you need to pay for the print up front. Get the cash off them for that (with your 25%) then charge for the design work when the job is completed

Or…

Get them to pay the printers directly, just offering to project manage the job for them.

Then either they can pay the cost price and you charge a project management fee (quite a reasonable thing to do) or you get the printers to charge the client +25% then you get a finder’s fee to the equal amount and your project management fee is wrapped up in that.

I personally won’t take on any work now unless I get the cost of materials upfront. If the customer doesn’t agree to it, then I don’t do the job. Then If they don’t pay for the labour, at least I won’t be out of pocket.
I don’t have any issues and so far, nobody has refused. If they did, then they’re probably a problem customer anyway and i’m better off moving on