We’ve all had those clients . . . yes? You know the ones! You are excited to work with them. They tick all the right boxes, they not only value your opinion but they “buy into” your value add and they want the works! The ideal client . . . sometimes not hey, because when it comes time for the payment to be done, the problems start. Suddenly it goes very quiet, they duck and dive your calls for payment and eventually you just write them off or pay for costly legal assistance! Not so good now, I’m sure you will agree!
Let’s face it, it’s tough out there for entrepreneurs and we are having to work twice as hard to put money in the bank.
No sane person would go to a restaurant or café, without sufficient funds to pay for what they have consumed, so why do clients think that it is okay to commission work to be done and then not pay, leaving you, the entrepreneur, to battle with your cash flow or payment cycles that are now far too long?
It’s a stressful situation to be in – constantly asking for money from clients are running around trying to collect the cash, a few notes at a time, over a very long period. It not only affects your bottom line and you pay your suppliers and your bills, but it also wreaks havoc with your state of mind and how you look at people in general.
So how do you deal with this and going forward, how do you find clients who are going to pay you timeously?
Actually, there are several ways to minimize this constant drain on your cash flow, here are some of them.
1. Take a Deposit Upfront.
There is nothing wrong with taking a deposit upfront. Many entrepreneurs do this especially if they have to fork out for materials and suppliers that they need in order to do whatever needs to be done. Think about the construction industry or even the plumber or electrician that you hire in your personal capacity.
2. Give a Discount
I remember when I first started my business. I would give a 10% discount if I was paid within 24 hours of the client receiving the invoice. It worked a treat!
But . . . there is another way to do it too. How about giving them the discount if they pay you upfront? Now that’s a win/win kind of situation.
The added benefit of this is that you will also get a clear indication of whether the customer has the cash resources available, to engage with you on any additional work or projects.
3. Productize Your Business
This is another way to get clients to pay for what they actually want without trying to get them to pay for everything that you have. I could probably go into most businesses and sell them between R30 000 and R40 000+ worth of Policies, Procedures and Templates – we all need those don’t we?
The reality, of course, is that most companies don’t think they need all of those, or they don’t have the funds to buy them all at the same time. They do recognize that they do need some of them right now, so now I give them a list of what there is and they order what they want and they pay for them upfront. If they need them customized and what me to do that, then I do an upsell for the customization at my hourly rate – again payable upfront.
4. Systemize Your Products
This one is a very big “note to self” for me. Even easier than just selling them one product at a time, systemize your products and create a “market” type offering on your website, so that people can go directly there, pay what they need to pay and download it there and then. No human intervention from you and everything is automatic. The money just arrives in your bank account! How simple is that?
And finally . . .
5. Ask for the Business.
One of my gurus Dr John Demartini always says “The quality of your life is governed by the quality of your questions.”
Don’t be afraid to ask for the business, but remember it comes down to how you ask the question.
So asking them if what you are offering, is the right solution for their requirements would be a whole lot more productive than just saying “Have you got work for me?” for example.
Open the door to meaningful discussions about what you can do vs what they require, but make sure that what they require is definitely within your ability to deliver.
Do not be trying to sell them something that they don’t want or some “pie in the sky” type solution that will need to be sprinkled with fairy dust to be fractionally acceptable.
Be direct, be honest, and above all be authentic.