Some lessons need only be learned once, yet, if you add another variable to the scenario, the lesson changes. So it was recently with the red flags that kept jumping up and down, shouting and waving at my blind brain. A client and friend ordered a lot of work and delayed payment with changing stories and an acute lack of follow-thru.
As a small business owner, prompt payment is extremely important to being profitable and even surviving. That's why I ask for a 50% deposit on all projects. If the balance has not already been paid by the conclusion of the project, it is due at that time.
Because of the Situation, I Had to Make a Big Offer
This time around, payment still has not been made for six months of completed work, and I have spent a nervous few months wondering if my company will survive. I still do not know if it will pull through, so I just posted a special deal for Biznik members at $750 for a logo and $500 for business card, letterhead, and envelope design. This is literally 1/6 my usual fee. I would not be doing this if I did not absolutely have to. I hope you will read and learn from my mistake so that you don't have to do anything similar.
Take Advantage of Me, Please.
If only I had listened to the numerous red flags, I would not be in this position. But I am, and now I am asking every Biznik who can benefit from my mistake to fully take advantage of the situation! Really.
The Story
This short article is worth a read, and if you know someone in a similar situation, please pass this on. It may just save their business.
When a fellow Biznik approached me last year to do all of his company's brand development and marketing, everything seemed normal. For about one day. Then, Red Flag! The first red flag floated out disguised in green. For our first meeting, the client paid in cash. In over 16 years in business no one has ever paid in cash. He had a simple, plausible explanation, however, and we got along great, so I moved forward with him.
I did the company's corporate identity design, and he made payments in cash until it was paid off, and then some. He actually overpaid for the identity. This turned out to be a good thing because he had ordered more work, but one day he said he didn't have the money for it. Red Flag! Then another day, he told me the money was in the bank. Red Flag! He had originally told me that he didn't have a bank account. Red Flag!
The other projects I did for him included writing his business plan, tag line development, a brochure design with copywriting and printing management, every aspect of the company's website, from strategy and research, to copywriting, design, illustrations and development. I even rewrote his blog posts in a ghost capacity. I also developed his marketing plan. To date I have been paid only for the identity design and website development.
Particularly Odd
The website went particularly oddly. He signed the estimate for it, but said he had no money to pay the deposit. Red Flag! Three months went by, then his friends started asking me when the site would be done. Red Flag! We hadn't even started it yet. First he told me that he was surprised that any of his friends would have contacted me, then he told me that he had been telling them the site would be done in a couple of weeks. Red Flag! He also said he was surprised that I had not yet started the site, and he had no idea that I was awaiting payment. Red Flag! He finally paid a fraction of the deposit and asked me to start anyway. Red Flag! Normally, the answer to this would be a simple, "No, we can't start until the full deposit is paid." But I did start the project. He then told me that he had all of the money for the site in the bank. Red Flag! By this point, it should have been in my bank. He paid enough money to not quite cover the development work on the site. My time has still not been compensated, not even a dime. At the project conclusion, I asked for payment, but he said he had no money. Red Flag! When I told him that I could not launch the site without payment, he replied by saying that he couldn't make any money if I did not put the site up. Red Flag! I'm not sure, but I believe that this amounts to extortion. Why I put the site up anyway, I am not sure. I think it is because I let our friendship cloud my normally sound judgment.
I know that the work that I did for him was outstanding in quality, and he waxed poetically about how much he liked it. I am proud of the work. I can easily point to the non-action on the marketing plan as a reason for his business not picking up. He walked away from the marketing plan meeting full of enthusiasm and called the next day to tell me how pumped up he was. Then, he did none of the things on the plan. Red Flag!
Objectivity is Your Friend
A good friend asked me why I kept doing work for a non-paying client. The truth is that as we became friends, I gradually began listening to my helpful nature rather than my business experience. I lost my objectivity.
Now, the two of us get along like old friends, and I really enjoy talking with him about both business and life in general. Even today, with him owing me quite a bit of money, I consider him a friend, and I truly trust him when he says he will pay when he can. The thing is, during the course of our work together, I watched him do everything under the sun to procrastinate from doing the things that it takes to succeed in a startup: from buying expensive toys, to frequently taking days off to go play, to attempting to hire staff without first doing the work it takes to get clients, and ultimately to not paying me. All of these things, except the non-pay, would be fine for someone who is independently wealthy or whose business is well-financed, but he was barely getting by, and eventually he said he was totally broke. I can understand that, as times are tough for everyone.
Heed These Words: Stop Before It's Too Late!
When I finally realized that I had to cut him off until he paid, it was too late. The time I had spent on his work should have been spent on paying client work or marketing, both of which would have been profitable. Now, I am stuck having to take desperate measures in the hopes of surviving.
In Conclusion
Finally, I have to ask myself this: Would I allow a friend to treat me the way this client has treated me? No way! Would I bankroll a friend's business? Nope! So why on earth did I not heed the red flags, and stick a fork in this work before it was done? Why did I put my business at such a great risk of collapsing under the weight of this client's non-payment?
I think it boils down to trusting and listening to those internal red flags, and importantly, acting on them.
Now please, take advantage of me and my offer if it will benefit your business. And thanks for reading.
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