When starting a business, there’s a lot of things to think about. For example:
- The idea of working for yourself is exciting
- The challenges of managing your own retirement can be tough
- Navigating the tax code can be tougher (get a CPA!)
- Keeping your own books can be tedious
- Working with clients can be a lot of fun, but also tough
- …and so on.
A lot of it is exciting, some of it is scary, and some of the it you might expect but don’t really know how to handle until it actually happens.
Case in point:
When working with a client, what do you do when you’ve completed a project, they disappear, and they don’t pay the final invoice?
This is when self-employment gets a little tougher.
When Clients Disappear
Despite my pessimistic (and sometimes cynical) personality, I try to believe the best rather than assume the worst.
That is, if I’ve yet to hear from a client for days or weeks-on-end, then I try to believe something personal has come up and it’s a matter of time before I hear from them.
Sometimes I’m right, sometimes not. And when it’s the latter. It sucks because I’ve essentially wasted my time. The longer I work for myself and the more I try to establish Pressware, the more I’m trying to prevent that from happening.
I’d like to think this is a phase all businesses go through.
Not Getting Paid
This is one of the worst feelings. It’s frustrating. It can incite anger. It means you’ve wasted your time. It means someone got something for nothing.
Easier said than done, but try to keep your emotions in check. It doesn’t do a lot of good to sulk in it. Instead, there are things we can do to protect ourselves.
First, I’ll admit in the few years or so I’ve been working for myself, this has only happened twice. Some may consider that a good record, some may consider that a bad record. I opt to go with the former.
Anyway, in those situations there are a few things that we often think we may do to prevent this from happening:
- In your contract, have the client sign to receive the final work upon final payment.
- In your contract, note failure to receive final payment may result in taking down the site.
- Break payments up into installments.
- Considering charging by the hour or charging by the week.
Here’s the thing: In situations like this, seek advice from wiser, more experienced types. It’s what I’ve done and it’s what I continue to do.
For example, one of the things you may feel like doing is throwing up a landing page that reads something like:
When the client has resumed payment for their services, the site will launch.
But every successful business person in this industry says that’s a no go. If nothing else, that can result in a law suit even if you’re in the right. Do you want to spend your time and money fighting that?
Instead, other advice I received:
- Ask a lawyer to send a letter demanding payment and threaten to take the client to small claims court. This works well if they have assets in the same state as you.
- Move 100% of your payment up front with the promise of a refund. I know two friends who have done this and it has worked out well.
- Determine if you need the money. Is the time you’d spend going after this money worth the amount of time you could spend on another project?
And I’m sure there’s more and I’d love to read your take in the comments, as well.
Avoid Rush Jobs
The biggest advice I can give to you is to watch out for jobs that need to be done quickly. You’ll likely see this manifest itself in emails or phone calls in which people say they need something done as fast as possible because they are short on time.
Usually, this plays out in you – or us – seeing a paycheck on something that’s expected to be done quickly.
I’ve yet to see it play out like this.
Instead, we end up doing the work quickly – possibly forgoing time we could be spending with family or other hobbies – and they end up getting the result and never pay.
It’s as simple as avoiding these types of projects. Unfortunately, it’s easier said than done and it’s something that many of us end up having to learn the hard way.
What Do You Do?
I hope the information above helps in your freelancing or self-employment endeavors. As I mentioned, much of what you’ve read above has come from my own experience as well as working with others.
And I’m sure I’m going to have more to learn in the future.
In the meantime, if you have your own questions and or comments on things to improve about this process, don’t hesitate to add them to the comments.