Getting Paid!
Posted on November 15, 2007
Filed Under GENERAL
Many of you out there are small businesses, just like me. We do a lot of the same things, no matter what business you are in. We invoice our customers, they pay us, we pay our bills, we pay the government. Here are some things I have learned in the almost five years I’ve been in business. Most of you, undoubtably already know these things, but hey, if anyone can learn from my mistakes, glad to be of service.
Nothing is more frustrating than working hard for a customer, doing the work, and then getting stiffed. Stiffed. You know, not getting paid. You send them an invoice, and nothing. You call them and nothing. You call and call and call, and soon you’re spending more time chasing your money, than actually doing the work for them in the first place. It can make you insanely angry. I call these people deadbeats.
How do you avoid deadbeats? Well, one thing they mostly seem to have in common is a shortage of cash. Some business just operate that way: always on the edge, always on the margin. They can afford 5 trucks, but they have 15. They owe the world. They are one bad break from being out of business altogether. Of course, if that happens, they’re taking whatever they owe you with them. Nothing like calling a guy who owes you money, and getting the “I’m sorry, the number you have dialed is disconnected” message. So when you’re initially talking to a potential customer, listen for those telltale signals about financial condition. “Man, it’s rough out here”. “Fuel prices are killing us.” “We’re in debt up to our eyeballs.” “Everybody wants something from us.” “It’s tough to make ends meet.” You’ll be amazed how these guys will just blurt this stuff out to someone they don’t even know. You hear this type of thing…. you’re not getting paid. Run away!
Oh they may want to pay you, but they won’t. They can’t. They owe too many people in front of you, and that’s a long, long line. Either get paid upfront, or don’t do business with them, no matter how much they promise to pay you on the back end. A bird in the hand is worth you not chasing a deadbeat for 6 months. Another trick is when you are presenting the bill, and you get the ol’ “you want all of this now?”, the answer is YES. I want it all now, just like we agreed. If they say they can’t do that, then say you’ll accept two checks, one for half, and the one for the other half, dated two weeks later.
Another thing to remember in avoiding deadbeats is it can be anyone. It has nothing to do with personality. In fact, some of the nicest, most charming people are deadbeats. You’re working with a new customer, and he’s a swell guy, and you say to yourself, “I’ll get paid, these are really nice people, I could get paid now, but that’s ok, he can send the check in two weeks”. MISTAKE! Get paid now. Don’t be afraid to ask for payment. Make the guy dig out his checkbook, and write the check. It’s business. It’s what both parties agreed to initially. Only a deadbeat would be offended by this, legitimate business people understand that if you incur a service, you have to pay for it.
When collecting debts, face to face works much better than on the phone. Most deadbeats are pretty cowardly, and don’t want to face someone they’re in the process of stiffing. The problem is cornering them. Have you ever seen Tony Soprano take off after someone that owes him money? Well it’s sort of like that. You have find them, get in their face, then you might get paid. If you’re just making phone calls, good luck. Generally, if they are taking your calls, that’s a good sign. You’ll probably get your money at some point. However, if suddenly they are never available, and you’re leaving message after message, forget it, they’re ducking you. Unfortunately, the law provides little relief if someone stiffs you. Basically, it’s legalized stealing.
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