Monday, August 30, 2010

Know When to Stick to Your Guns

Recently I made a big mistake with a new client. It’s one I used to make a lot when I first started freelancing and I’m sharing my experience hoping that you’ll be able to avoid making the same mistake with your own clients. I compromised one of my business policies even thought I knew in my gut I was making a mistake and of course I paid for it in the end.

It all started when a local company contacted me about doing some freelance writing for them. We spoke over the phone a couple of times, I sent them a proposal and a couple of weeks later they asked me to draw up a contract for the project. Things were going great until we started talking payment terms (big surprise).

My terms require full payment upfront for projects under a certain dollar amount, and a 50% down payment for projects over that rate plus scheduled payments thereafter depending on the duration of the project. Naturally that was going to be a problem for this client because they only invoice monthly. I’ve dealt with mid-size businesses that invoice monthly before and that wasn’t a problem per se. I told him that he could pay the down payment and I’d be happy to invoice the remaining balance at the end of the month. Another problem: since the company invoices monthly, they are unable to make an advance payment (Yes, it just kept getting better).

I honestly didn’t feel comfortable with the arrangement, but stupidly agreed to it anyway. The next day the situation still didn’t sit right with me so I discussed it with my accountability partner. She gave it to me straight with her most charming, lilting, Irish accent saying, “Oh, you shouldn’t have done that. You’ve worked in a corporate environment before. You know as well as I do that if a company needs to cut a check for something important they can do so the same day. You should not compromise your own policies so easily assuming that they wouldn’t want to do business with you." (The Irish are so wise)

I ended up getting paid, but it took much longer than the 30 days outlined in the signed agreement. In the past I’ve offered discounts and made special payment arrangements with returning customers; but it sets a bad precedence to dismiss your own policies too often, too easily or too soon. Policies are put in place for a reason – usually to protect you and your business, and anyone who’s hiring your services will respect that if you insist. Clients will test your resolve, but you don’t have to automatically give in, especially when it’s not in your best interest. That’s just business.

Jennifer Mattern approached a similar issue and discussed it on her blog recently. I agree with her stance on this topic and encourage you to check it out for yourself.


Lori said...

Kim, I think it's a great lesson. And yes, we ALL make that mistake repeatedly. It's in our nature to trust despite our past history and our instincts.

I'm facing something quite similar, and this post has helped. A long-time client has come to me asking for a quick job turnaround. Only problem is the invoice for the last two quick projects is still outstanding. Worse, they're the ones who refused the first of those outstanding invoices because "We didn't use the copy." I was assured three weeks ago the invoice was being processed. Still no check today.

I won't be doing that quick project, and I'll be telling them it's because I can't add to an already large, unpaid bill. They've been a client for six years, but any client who doesn't pay isn't a client any longer - even the steadfast ones.

Devon Ellington said...

Excellent point.

They "can't" cut a check for an advance payment? What happens if the boiler goes out or the plumbing breaks down? They expect those workmen to wait for a monthly invoicing?

Fulfill this obligation and move on to others. They don't deserve you.

Kimberly Ben said...

@ Lori & Devon: You know, every time I've compromised my position (mind you, I'm not against making reasonable compromises when necessary) it's just not ended well for me. I'm hard headed, and sometimes must learn lessons the hard way, but eventually I get it. There are too many opportunities out there to waste on clients who refuse to meet reasonable business terms.

Lori, I hope your situation gets resolved very soon!

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