Why should you never provide a service without a retainer and an agreement?

Having an explicit engagement agreement and retainer paid before any work is done is an essential aspect of conducting business as a consultant, freelancer, or service provider. An engagement agreement sets the expectations for both the client and the service provider and ensures that both parties understand their respective obligations.

A retainer, on the other hand, is a form of payment made in advance to secure the services of a consultant or freelancer. It guarantees the consultant's or freelancer's availability and demonstrates the client's commitment to the project. By paying a retainer, the client shows that they are serious about working with the consultant or freelancer and are willing to invest in the project's success.

The consequences of not having a retainer paid before any work is done can be significant. Without a retainer, there is no guarantee that the client will follow through with the project or pay for the services rendered. In these situations, the consultant, freelancer, or business owner is taking on a significant risk by providing their expertise and services without any assurance of payment.

Moreover, not having a retainer paid before work can lead to disputes between the client and the service provider. The client may feel that they have not received the service they expected or that the work was not done to their satisfaction, while the consultant or freelancer may think they have not been fairly compensated for their time and expertise.

In the worst-case scenario, a client who fails to pay a retainer and the work is done may refuse to pay the service provider for their services. This can result in legal action, which can be time-consuming, costly, and disruptive to both parties. At this juncture, you may decide to write off the receivable if it's not worth the costs of legal action or may pursue it.

In conclusion, they have an explicit engagement agreement, and a retainer paid before any work is essential for several reasons. It sets clear expectations for both the client and the service provider, demonstrates the client's commitment to the project, and protects the consultant or freelancer from the consequences of not being paid for their services. By taking these steps, both parties can ensure a successful and mutually beneficial working relationship.