Every business needs to make money, but not every founder knows how — or when — to collect it. Cash flow problems are one of the top startup killers.
The fad of acquiring users now and making money later is over. Companies need to turn profits quickly if they want to survive. To keep the lights on without angering clients or investors, service-based startups should consider the advantages of retainer agreements.
Dependable, recurrent income provides security that no investor commitment can match. Investors can always decide to withdraw their support, but a company with paying customers always has a fighting chance.
In an article that I recently contributed to Entrepreneur.com, I discuss the mutual benefit of retainer agreements, and why they add value to your client services and how they provide a more productive working relationship. Does your agency utilize retainer agreements, or would you consider it? After you read, I’d be interested to know your stance.