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Get payment up front for a secure business
When starting any business one of the most important factors is cash flow. Often you want to live on the bare minimum of wages just so all of the money can be re-invested back into marquees or equipment for quicker expansion and long term gain. Hopefully you’ll have seen some of the beautiful sales staff from DIY Marquees along the way. Or you can deal with our ugly sales staff, we’re not fussy.
When I ran a marquee hire business we would ask for:
- 20% payment when booking. The industry standard seems to be between 10 and 25%
- The balance of payment when the marquee has been erected but before the day of the event
This one would need explaining to the customer a bit just so it came across in the right light. We would emphasise that we would make sure that the customer was completely 100% happy with the marquee before asking for payment. This gives the customer the reassurance that if there’s something they’ve got concerns about we will make sure that it is resolved before they have to pay (and rightly so). If they still raised issue with paying before the event then we would tell a white lie saying without payment they were not covered by liability insurance and so we could not allow the marquee to be used -it very rarely came to this but we were very persistent.
The exact wording we used in paper and verbally was “The balance is due when the marquee is up and you’re happy with it but before the day of the event”.
Getting payment up front drastically helps your business cash flow. Because of this policy we only ever had one bad debt in over 10 years of marquee hire (a bounced cheque that we got most of the money eventually).
By way of comparison I know of two reasonable sized companies who are now out of business due to bad debts.
I should put this in to perspective and add a caveat or two – we mainly specialised in wedding marquees so our client base was private customers. The more corporate marquees you do, the more companies you deal with the more you will have to offer credit. Often it’s that or someone else will get the work. Just make sure you do some research, don’t assume just because they’ve got a shiny website and talk of a multi-million pound turnover that they’re actually a financially sound business.
Thanks for reading
Spencer
