In traditional business agreements, a “client take-on fee” (also known as an “onboarding fee” or “initial setup fee”) is typically a one-off charge that covers the initial administrative and logistical costs associated with beginning a new client relationship. Here’s what this fee usually includes and why it is used:

1. Purpose of a Client Take-On Fee

• Preparation and Planning: This fee compensates the service provider for the time and resources required to set up the client’s account, understand the client’s requirements, create project plans, and allocate resources.
• Opportunity Cost: It recognises the time the provider dedicates specifically to the new client, which might otherwise be spent on other clients or projects. This is especially relevant for freelancers and small teams, where time is a direct resource.
• Upfront Investment in Research and Strategy: For projects requiring extensive research, design planning, or strategy sessions before main work begins, this fee helps cover those initial stages, which are crucial for successful project outcomes.

2. What a Client Take-On Fee Usually Covers

• Client Meetings and Consultations: Time spent with the client to understand their goals, challenges, and project scope.
• Project Scoping and Documentation: Initial work, such as creating project scopes, timelines, and deliverables, based on the client’s needs.
• Setup of Systems and Tools: Depending on the project, this could involve setting up project management systems, collaboration tools, or technology platforms tailored to the client.
• Administrative Setup: Covers necessary legal documents, agreements, and the setup of invoicing or payment systems.

3. Industry Use of Client Take-On Fees

• Consulting and Freelance Services: Frequently used by consultants, creative professionals, and agencies who invest significant upfront time to ensure they understand the project thoroughly and can deliver a bespoke solution.
• Retainer Agreements: Many businesses, especially in design, legal, or marketing services, apply this fee when intending to retain the client on a recurring or retainer basis, as it helps offset initial onboarding costs.

4. Benefits of a Client Take-On Fee

• Security for the Service Provider: Ensures the client has a financial commitment, discouraging non-serious enquiries and reducing risks of unpaid work.
• Establishes a Professional Tone: Indicates that the service provider has established processes and values their time, setting a clear expectation for a serious business relationship.
• Supports Project Success: Allows the service provider to begin the project with clarity and alignment, having properly understood and prepared for the client’s needs.

In essence, a client take-on fee is a well-established practice in many industries to cover the initial costs of client onboarding, demonstrating the provider’s commitment to quality work and a smooth start to the partnership.