Writing a Monthly Retainer Proposal

Monthly retainer proposal

Thrilled to be writing this post — I was recently approached by a Fortune 100 client that had hired me to do some Online Reputation Management for them. They indicated that they appreciated the value I had brought to the table and wanted to work with me ongoing.  Fabulous!

My next step is to write a Retainer Proposal and I confess that I don’t have much experience with this.  Over the years, I’ve written many business proposals and contracts (my very least favorite part of my job) and some loose retainer proposals — but this one is a more significant milestone in the span of my freelance career and I want to get it right.

Do you have clients who use your freelancing services on a regular basis?

If you do, consider setting up a retainer agreement with those clients. There are some real benefits for freelancers who use retainer agreements.

Business owners and freelancers should always get a written agreement to avoid scope creep. A retainer agreement is a specific type of written agreement that can benefit both the client and the freelancer.

We are not attorneys here at FreelanceMom.com, but we’d like to share the basics about this type of freelancer work agreement. After you review this article you can decide whether a retainer agreement is right for your business.

Study this guide to learn what you need to know about retainer agreements.

1. What Is a Retainer Agreement?

How is a retainer agreement different from other types of freelance agreements?

Basically, a retainer agreement occurs when a client agrees to pay a freelancer a standard fee on a regular basis for ongoing work. The first payment is often made in advance.

Depending on the terms of the agreement, the client may agree to pay the freelancer weekly, monthly, quarterly, or even annually. Or some other arrangement may be made.

Retainer agreements are common for large projects, ongoing work, and for frequent smaller projects when consistency is important.

2. Pros and Cons of Having a Retainer Agreement

Both the client and the freelance can benefit from using a retainer agreement. Here are some of the advantages to you as a freelancer:

  • Regular income. A retainer agreement provides you with a regular source of income while the retainer agreement is in force.
  • Better relationships. With a retainer agreement, you develop a long-term relationship with your client.
  • Enhances your portfolio. A retainer agreement can also help you to build up your professional portfolio.
  • Control over schedule. Having a retainer agreement lets you control your work schedule since you know about upcoming work in advance.
  • Reduces collection problems. Since the retainer fee is often paid before you do the work, you don’t have to worry about not getting paid.

Some of the reasons clients like retainer agreements include:

  • Dealing with a known quantity. Finding reliable freelancers can be a struggle. With a retainer agreement, your client always knows who is doing their work.
  • Saves money. It’s common for freelancers (and others who work on retainer) to offer a discount on their services. Over time, these savings can add up.
  • Consistent quality and service. Since the same person will be doing the work, the quality of the work will be consistent. There’s also no need to train a new freelancer.

Despite the advantages, there can also be some disadvantages to having a retainer agreement. Freelancers should be aware of the following problems associated with retainer agreements:

  • Inability to raise rate. If you agree to work on a retainer, your agreement may “lock you in” to a standard rate while the retainer is in force. This can be a problem if the rate you negotiated is too low or if the work turns out to be more than you expected.
  • Time drain. Having a retainer agreement means you must save time for your retainer projects. If you are offered another large project at a better rate, you may not have enough time available to take it.
  • Relying on your retainer client. While a retainer agreement may mean regular income for a while, remember that the agreement will end. Freelancers should continue to market their services and look for new clients while they are on retainer.

Likewise, a client may be dissatisfied with a freelancer they have on retainer, but feel “locked in” by the agreement.

3. Who Should Use Retainer Agreements

Not every freelance project is right for a retainer agreement. A retainer agreement is ideal when several of these elements are present:

  • There is a need for ongoing work.
  • The project is large and requires the services of a freelancer over a long period of time.
  • Consistency of the work is very important.
  • There is a steep learning curve for the project.
  • The client doesn’t have time to find lots of different freelancers.
  • The freelancer and client have a good working relationship.

Examples of specific projects where a retainer would work well include:

  • A freelance writer provides a weekly or monthly article for a blog or newsletter.
  • A client needs weekly social media promotion for their website.
  • A web development client wants ongoing technical support.
  • A virtual assistant provides a specified number of hours each week.

Never use a retainer agreement for a one-time project that takes less than a week to complete. Also, don’t set up a retainer agreement if you do not have a good relationship with the client.

4. How to Write a Retainer Agreement

Would you like to draft a retainer agreement? Here are some basic pointers on how to create one.

Writing a retainer agreement is like writing other types of freelancer/client agreements. Cover the basics of the project including:

  • Scope of work
  • Fees
  • Payment
  • Period of time covered by the agreement
  • Termination

When you’re drafting your agreement, be as specific as possible. Try to anticipate problems and address them before they occur.

Here are three more resources on how to write a retainer agreement

5. Other Resources

We’ve explained what a retainer agreement is and covered some of the pros and cons. We’ve also discussed when to use a retainer agreement and even provided a sample retainer document.

Would you like to learn even more about retainer agreements? Here are some added resources we’ve found for you:

 Do you use retainer agreements? What type of projects do you do on retainer?

ABOUT THE AUTHOR: Lisa Stein owns FreelanceMom.com, is a college business professor and a mom to Gabriela and Elle. Lisa is dedicated to playing a part in helping women and moms run a business they love, help support themselves and their family and create a flexible lifestyle. You can find her online on Facebook and Twitter or at home burning something in the kitchen.