Why you NEED a Deposit!
If you're selling cakes, you NEED to get a deposit before you even start planning for it or putting it in your calendar!
One of the main reasons why deposits are necessary?
The order is locked in.
When people pay and plan in advance, they are serious. They are more likely to follow through with the whole cake order than someone who just places the order without putting any money on it because they know that they have that option to back out last minute.
Your time is protected.
If someone does cancel last minute, you are still getting paid for all the time that you spent planning and prepping for it. You have to remember that your time is valuable and worth money so by having a deposit, it really helps protect you and your time and energy.
When I first started out I did not collect any deposits and I had so many last minute cancellations, which was really hard on me because when I said yes to these orders, I was saying no to other orders which cost me money as well!
Always have a contract.
Deposits should always be paired with a written type of contract. This needs to state how much the deposit is, when it's due, when final payment is due, along with other details that are personal to your own business. It's especially important though to note in the contract at what point the deposit is nonrefundable. For instance, this could be a week or two weeks before the event. This again really depends on your business.
The bottom line is that everything needs to be clear and communicated so that you and your client are on the same page! If you want more advice on deposits and how to collect them, stay tuned! More on that to come soon :)
I want to know in the comments - do you guys collect deposits? How has that been working out for you?