When a client owes you money and won’t pay, not only is it an upsetting experience, it can bring bad energy to the business. But, if it’s a big account, it also has the potential to affect your ability to pay your own bills and team.
Sure sometimes late or missed payments are simply a clerical or administrative issue. But sometimes, it’s more than that. Even if the client intends to catch up, it can still be stressful for you while you wait.
In today’s episode I teach you 4 things:
- How to protect yourself in advance so that you minimize the chance of it ever happening
- How to protect your own ability to pay your team and vendors in the event it DOES happen
- How to handle it when it happens
- What to do if the client completely flakes out and becomes a bad debt
One of the things I teach you in step #2 is to make sure to collect a big enough deposit up front so that ALL of your hard costs are covered. This way, in the unfortunate event if a client is late, while lost profit always sucks, at least you aren’t out of pocket or using cash of your own for the services you provided. I’ve got an awesome worksheet to help you calculate your costs so you know what your deposit should be.
Download it here:
Make sure to leave me a comment below to let me know how today’s video helped you.
Turkessa D Allen
I enjoyed this episode. I had this happen to me last month and it was frustrating, but it helped me get things in check.
Nafissa Shireen
I’m sorry to hear it happened! Glad this episode helped you.
Chantal
Great video! My question is: Do you parcel out product services when clients choose to pay over a period of time? For example, you package for getting speaking engagements has an option to make payments over 12 months. Do you parcel the product into 12 components and release them once you’ve received the money?
Nafissa Shireen
Thanks Chantal.
How products and services are delivered and how payments are structured, really vary on the unique situation and how the product is delivered.
In our speaking product you mentioned, we chose not to drip the content, but rather to allow access to the full product. This is because I want my clients to be getting speaking gigs as soon as possible and they need the full content.
However if they default at any time, we suspend access to the membership area. And we’ve rarely had defaults as our terms and conditions are solid.
However there is no one size fits all, and it really depends on the entrepreneur, the offerings, their clientele, and a host of other factors. And sometimes different programs require different options.
When I work with my clients we consider this on a case by case basis.