It happens in every small business owner's life: you're sought out, appointments made, confirmations take place, meetings with the clients and the meetings were successful, if you have to say so yourself.
You sit back, the client sits back, you're both basking in the after effects of a prosperous meeting when you look over expectantly for payment (Cue: screeching brakes, breaking bottles, fire alarms). The client looks a bit uncomfortable at every item in the room except your face, clears the throat and says, "I won't have any money to pay you until later," or "Can we make payment arrangements". Next, I wonder how long I can keep my mouth open like this.
You've given this client everything with passion, motivation, you've coached, you've reconstructed, deconstructed and created a blueprint for that individuals future and this hillbilly ain't got no money! And what's worse is the fact that this is known prior to the meeting that payment was expected and even after the confirmation, it was never mentioned that there was no money to pay you for any part of the consult.
It happens to the best of us - clients who don't pay. As a small business owner this can cripple and derail a business. Our bottom line is literally our bottoms. Unless we've agreed that this is pro bono...business owners expect payment at the time services are rendered. We have to pay for fuel, living expenses, advertising, all the expenses of running a small business and living my life. Some of the differences between running a small business versus big business is the lack of finances to hire collection agencies to get mine, neither do I have time to spend in court wasting hours and time (which is money) trying to get paid.
So how can small business owners protect themselves from clients that don't pay? Here are a few tips:
- Every small business owner should have a Paypal account
- Require payment upfront or a portion thereof
- Don't take checks or make sure it has cleared before you deposit it into your account
- Don't make concessions especially with friends unless you agree to a discounted rate (friends always want the "hook-up")
- Never enter into an agreement with anyone without clear guidelines - a contract
Last, but not least, if all else fails, Happy Hour is still 4-6PM where you can still get a "hook-up" for under $5!
