For businesses affected by a COVID-19 closure or shelter in place order, securing deposits for future services is more important than ever. Even if you’re not seeing clients in-person right now, you can still maintain some of your income with deposits and pre-payment. Though this article addresses using deposits to prevent cancellations, these tips can also be applied to securing deposits for future services to provide immediate income. Click here to read a letter from our CEO, detailing how Vagaro is here to help your business get through this crisis.
As a service professional, a lot of your business depends on other people. For small business owners, you’re not only providing services, but it’s also up to you to make sure you’re compensated for those services. The downside to this is that sometimes, you lose money on high-ticket service appointment cancellations. For example, a client books an expensive, time-involved service, cancels or no-shows the appointment, and you can’t fill the open time slot with another client. If you’ve purchased non-refundable specialized tools, equipment, or products, not only will your daily income suffer, but you might even lose money on the booking! If you’ve ever had a missed appointment that hit you square in the pocketbook, deposits are the key to ensuring your time has a monetary value. Deposits protect your income in case a high-priced or time-consuming appointment doesn’t show. If you’re wondering about when and how to require deposits for online booking, read on!
Give Your Time a Value
Sometimes, because clients associate their payment with the completion of a service, they forget that your time itself has a value. Deposits ensure that clients value your time the same way that you do, because there’s a cost associated with the booking. After all, you’re less likely to cancel or forget an appointment if you’ve already paid a deposit!
Cover Out-of-Pocket Expenses
For some services, you may need to purchase additional products, supplies, tools, or materials in order to perform the service. Deposits allow you to cover your overhead without dipping into your savings.
Keep Cash Flowing
Instead of waiting for all your payments to clear, deposits allow you to have a steady, reliable cash flow. That way, even if an appointment gets rescheduled, your budgeting won’t be thrown off by the money you’d been counting on.
When and How to Require a Deposit
The service industry works a little different than other small businesses, where shoppers are accustomed to paying upfront. Think about it: at the store, you pay before you’re given your items. At a drive-through, you pay before receiving your food. When you go to the movies, you buy your ticket before entering the theater. You pay for online purchases before they’re shipped. But in beauty and spa, as well as for personal trainers, payment is generally the last step of the appointment, as it is for many service-based professions. So, the question is, when should you require deposits?
The answer isn’t straightforward, but for deposits, that’s actually a good thing. For some industries, requiring a deposit is standard for booking a service. For example, tattoo artists require deposits upfront because appointment times depend on the complexity of the work. For beauty and fitness professionals, the easiest way to decide on whether to require a deposit is to consider the length of the appointment and the overhead cost. For example, a Brazilian Blowout is a lengthy, expensive service requiring supplies you may not have on hand. Likewise, a multi-process color, such as highlights and base color, or a double-process fantasy color look might take up half your day’s schedule.
Safeguard Your Time and Resources with Deposits
For high-ticket services, appointments requiring longer service times, or services requiring specialized supplies, it may be beneficial to require a deposit. Deposits keep everyone accountable. Clients know that their deposit secures the appointment, and service providers know that deposits place a value on their time. The deposit feature is the newest addition to VMS, which helps you quickly, easily, and efficiently add a deposit requirement to book future services. This protects your valuable time and resources. Deposits also make it easier for customers to check out later, because their deposit is deducted from the service total at the completion of the appointment.
Ready to protect your time and resources with deposits? Get VMS today, and safeguard your bookings with pre-paid deposits!
Header Image and Icons: Mia Montemayor via Vagaro