Posted by Mitch Mitchell on Sep 21, 2011
I’m not a great business person. True, I did celebrate the 10th anniversary of my business this summer, so I have found a way to stick around for a good long time. But I’m not a great business person; sometimes I’m not even sure I’m a good business person. Let me tell you why.
Two weeks ago I had to go to small claims court to get money that someone owed me for work I completed. The thing is I made one of those crucial mistakes that probably hits all business people at some point in their life. I did the work before I had the person signed the contract, and then he decided that there was something about the work he didn’t like and he didn’t pay me all he owed me. I did the work because this is someone I’d known for a while and thought I could trust; Judge Judy would have chewed me out for this mistake.
This isn’t the first time it’s happened to me since I’ve been in business. It is the first time I was owed enough money to sue for. Luckily I won; yay! Or did I? What I agreed to is half that day and half the following Friday, and to also help finish the project, which this guy hadn’t finished even though in court he tried to tell the judge that he’d gone to somebody else to help him with it. Of course I knew better because there are very few people that do this particular thing I do. I did my part, and today if he does his part I should have a check in the mail. The thing is it’s five days later than I should have had this money. That’s being a bad business person.
On another front, I’ve been waiting to be paid by a company I did work for back in April. In this case I did sign a contract which said that I would get paid when they got paid. This was with another guy I have known for some years who told me that their clients usually pay them within 30 days so that I should have my money relatively soon. This could have turned out to be a very big contract so I went with it.
Instead, new players got into the game, the contract got cut short, and I have been waiting for my payment ever since. I had actually been told that I would have this payment a month ago and I’ve been looking for it for a while. Then last Monday the same guy contacted me and tells me there had been an error in the office that was finally corrected and I should have my check this week. Of course nothing has shown up yet.
If you’ve read this blog or my business blog for a while, you know that I basically have three tenets that I base my perception of every person I meet on. Those tenets are honesty, loyalty, and trustworthiness. Sometimes in business we tend to make allowances for things that we wouldn’t make allowances for in our personal lives. This sometimes impacts us negatively when it comes to business, whether we work for ourselves or for someone else. After 10 years I’m supposed to know better; I need to start proving it.
Here are five rules I’ve got to put into effect for myself if I’m going to stay in business. These wouldn’t hurt anyone else to follow if they needed business tips, whether your business is online or off-line, and in some cases whether you work for someone else or not. So here we go:
1. I will no longer do any business with anyone without at least getting a deposit up front. The amount of the deposit will vary based on how big the contract is, but it will be anywhere from 25% to 50%. Truth be told, on the first story I told you if I hadn’t got the amount of money I got up front I wouldn’t have been able to get the entire amount in small claims court, and I would have had to make a decision whether to take him to full court or not. That would’ve been really expensive based on the amount of money he owed me, and I could’ve lost out totally. So maybe I wasn’t such a bad business person at all.
2. I will stop lowering my price for most services I provide for someone else. I mainly do this for people I know, but that turns out to be a bad thing when I’m doing something that’s very technical. One of those things you start to learn is that people don’t respect you as a professional, even if they know you, if your price is too low. I was trying to do the first guy a favor which I thought could result in a lot of business on the back end, and he used it to his advantage by delaying the payment I deserved. Sometimes we need to realize when we do specialized services that we need to stick to our guns and our price and dare people to find someone else who can do the work for them. And if they go searching and can’t find someone, if they come back to you raise the price for their wasting your time.
3. I will better define certain terms of my contract so that there is a definitive as to when a project is completed. In this case I did the work in the time I said I would do it, but I never really indicated when I expected to be paid. I did write that I expected to be paid within two weeks of the end of the project, but that left him to interpret that the project ended when he thought it was over. That left me without being paid for seven months. That’s a mistake that won’t happen again.
4. I will better define what will be delivered and what the client can expect. When it comes to SEO work, clients need to understand that the only guarantee they can really get is that their presence on search engines will improve, probably a lot if they have no ranking, but if they have a presence already results might not be as drastic.
When it comes to the specific healthcare work I do, realizing that everyone can’t do it and those other people that do this type of work, which are mainly the very large consulting companies that charge upwards of three times what I normally charge, are someone that I can beat with a better price and better customer service attention.
5. I will not only work to maintain my integrity and the standards and tenets I’ve set for myself and people in my personal life, but I will hold people in business, whether it’s their company or themselves, to the same standards if I’m the one who’s going to be working with them. This is a concept known as “finding the type of clients you want to work with”. I will not work with just anybody for the sake of getting money. I have found that to be mentally draining and not much fun. True, work isn’t always supposed to be fun, but if work is beating you down get away from it and go do something else.
And those are my five things. Is there anything you’d like to add?