As I gain lessons as a full time self-employed businessman, I try to share with others so they won't make the same mistakes. If you're as hard headed as I am, you may make them anyway.
What Do You Mean Don't Chase Your Money?
Do not continue to do business with people who make it difficult to collect your hard earned payment. I have a good friend who's helped me with both the business and technical aspect of my field. A business owner outsourced him some work and made him invoice my friend instead of paying him upon delivery of the work. Naturally the business owner didn't pay. Now my friend, last I heard, is afraid to stop accepting work from the man for fear he will not pay all the money that he owes.
I was a computer IT for a man who owned a business cleaning after hours a well known discount store chain. He told me himself they were always months behind and he had to continuously call them to get paid. I asked why he didn't threaten to sue. He said they'd probably cancel his contract and get some other company to clean for them. This reminds me of a lesson I also try to give online and offline business owners when I train them. Always diversify your income. You should have at least three income streams. You lose one, you've only lost about 33% of your income not the whole thing.
I've had to chase bad checks, a monthly check and a promise of payment. I'm going to go into explaining how I resolved or ended these. I'd also like to share some preventative measures I used using good public relations and sales skills to keep customers when I wanted to do so.
How Did I Catch My Money?
http://www.godsbusinessway.com/index.php/topic,12807.msg13070.html#msg13070 you may share this article, but keep the courtesy link above and the entire article intact without change
One bad check was from the bank I use. The client wouldn't answer my calls after the first one. I finally texted him and said, "So do I just write you off as a bad person or what?" He texted me back and asked me not to do that. Every time I went to the bank I'd have them check the bad check for sufficient funds. Shortly after my text there were sufficient funds and I cashed the check.
Another bad check I had an attorney send a collection letter. Don't worry, later on I'll tell you how you can easily afford an attorney to protect your business and your family. Although the envelope was returned he must have gotten the message as I cashiers check for the amount plus the $25.00 fee I was charged by my bank.
Let me interject here NOT to be afraid to end business relationships. Some business relationships will drain you and affect your other business relationships. This is harder to do when you're struggling with your business. Believe me I've been there, but you will probably make more money and feel better about yourself by getting rid of what I call energy vampires. I'm not necessarily referring to the examples above, but when you roll your eyes when the caller ID shows that person you wish to hear from the least, stop and think whether you should end your business relationship with that client. Just do it nicely.
The promise of payment was supposed to occur after some type of big grant came through. I spent a year working for the guy constantly hearing, "We've almost got the money". When I told him I needed some money now he got insulted and sent me some. I recognized the insult maneuver as being a con and stopped helping him. I never placed myself in debt with him with the exception of my time, which many would say, is bad enough.
How I Kept From Getting Further Down The Rabbit Hole
A client texted me who needed more work done. He was one of the very few clients I allowed to mail me a check. He hadn't paid me for previous work. Using my public relations and sales skills I texted him back stating
"I look forward to the completion of our last business so I can help you with this."
He got the hint sent me a check and I called him to make an appointment.
The client whom I had spent a year working for with very little pay called me after a year and left me a voicemail message stating he hadn't forgotten about me. They're close to getting they're grant and he needs my help. I texted him the same type of message. Received a call from him immediately. I was to busy to take the call, let it go to voicemail. He didn't leave a message and I never heard from him since. Could I utilize the affordable attorney service I'm going to tell you about later to get my money? Yes, but I decided he wasn't worth my time.
I had a computer client paying me a small stipend to help with his businesses computer remotely. After the second time my check was not found in the normal location and I would have yet again had to make a trip for such a small amount. I texted him stating I had stopped working and will send him my new rates payable electronically. Turned out to be just a lack of communication like most challenges are in business.
How Not to Have to Chase Your Money
Don't invoice people. Collect your money before or right after your services. Make this clear with good communication. Something I need to work on.
Here's an Example of Good Communication
A new client called me and wanted me to come over and look at her computer to see if it was worth fixing. I said,
"Sure, as long as you understand what you're paying for is my consultation as a computer expert whether I fix the computer or not." She understood, I spent an hour diagnosing the computer. I told her it wasn't worth fixing and charged her for one hour (my minimum for a house call).
End Example
If you travel have a minimum to charge. You don't want to go from downtown Honolulu to Makakilo for 15 minutes of work.
Stop seeing clients if they're hard to collect money from. I had a promising new business client who saw me just before she went on vacation. I worked with her assistant. They were both impressed by my knowledge and teaching skills. The problem began when I saw just the assistant who seemed to take a cavalier attitude toward me getting paid for my work. I sent her boss an invoice. The assistant said her boss didn't get it. I sent the assistant an invoice through PayPal. A few days went by I sent her a reminder. After about two weeks total I went into PayPal using Google Chrome. I used the print to PDF feature and printed out the invoice to a PDF. Emailed the assistant attaching the invoice. The subject line was:
Billing Past Due
In the body I had something like
Attached is the invoice. Pay immediately.
I got a text from her stating she would pay as soon as she got to her computer and she did. I never called the owner nor assistant after that. I thought about texting and stating
"When your policy changes about when you pay your technical people let me know. We can discuss business"
I decided against it. For whatever reason, paying service people their money was not a priority for them. It's not very often this changes. I decided therefore, regardless of the potential for business, not to create another situation where I'd have to chase my money.
Work With People With Whom You Get Along
You don't have to like all your clients, but you should each have a respect for each others time. If this doesn't apply to both you and your client, you should not be taking care of that particular client.
How to Get Affordable Attorney Help As Promised
The few business-people without any legal protection whatsoever are playing Russian roulette with their business, their homes and their families futures. There are more lawsuits and legal actions in the United States than there are health insurance claims. There is hope for us small business people. There is a company called Legal Shield which offers legal advice and legal protection from letters to advice and court appearances from REAL LAW FIRMS in YOUR AREA! There are even tax specialists if you get into trouble with the IRS. The ID Shield to protect your identity is a must in today's world of identity theft.
I've used Legal Shield a number of times and it has paid for itself. The two stories that come to mind for me was one I had already mentioned sending a collection letter which cost me nothing extra to have done and an overzealous security guard threatening to band me from my client's building she lived in for handing out a business card in the elevator. A letter from one of the attorneys to the property manager and I never heard a peep from that security guard again. I'm a pretty frugal guy. On the $25.00 per month plan I am paying for I got all that service at no additional cost! Check out Legal Shield by clicking
http://LawFirmInMyPocket.com God Bless,
Rick
James Richard Kirkham
