If there is one thing that can get a business owner yearning to return to their time in employment, it’s the uncertainty of getting paid regularly.
When you’re owed money by a client, it can cause serious stress for you. There are still bills that need to be paid but if the cash just isn’t coming in regularly enough, you could find yourself having to rely on borrowing just to keep yourself afloat.
If you’re familiar with the Law of Attraction, you’re also likely aware that the more you focus on the bad stuff, the more of the same you attract into your life?
Thus, by allowing yourself to get immersed into the negative thoughts around your financial problems, you’ll find that you attract even more financial problems.
With me so far?
So today I want to talk about how you can almost always avoid being in this position when you make a few simple changes.
Get paid upfront:
It ‘s obvious really, but asking for payment upfront will stop you being in the position of having completed the work but struggling to get paid.
It does mean you have to be firm on this when negotiating your fees with a client… especially if you are going to incur costs on their behalf in order to complete the work.
If you’re already billing monthly upfront, you may be thinking this doesn’t apply to you. However I recommend you take it a step further and invoice the whole project upfront.
Doing so avoids a situation where you are paid in advance for the first month, but struggle to get paid for month two onwards. How do you manage that? It’s difficult to suddenly stop work on day 32 if you haven’t set clear boundaries from the outset.
What if the client can’t or won’t pay for the entire project upfront?
Not every client will want (or be able) to commit to full payment in advance of the project. Even so, I urge you to go into the meeting with a determination to obtain full payment upfront… in other words, start negotiation from the best case scenario.
If you begin by asking for (or expecting) instalments, you cannot negotiate upwards later. So you can’t go from asking for instalments to requesting full payment. Always begin negotiations from your highest point.
A simple way to manage payments by instalments is to set down milestones for each stage of the project. So, as each milestone is reached, the next instalment becomes due. And until you have received payment for each milestone, you don’t begin working towards the next one.
It’s too late… I’m already owed money!
If you have unpaid invoices that are overdue and causing you cashflow problems right now… I’d hazard a guess you’re making this one fundamental mistake;
“You are expecting the money to come into your account any day now!?”
Am I right? You know the invoice is outstanding, and you fully expect to be paid soon. So when you add up your invoiced amounts this month, your income numbers still look healthy?
It’s not a great way of thinking though because it places too much focus on the other person. If your situation is dire, you will begin to feel angry or resentful towards them for being the cause of your cash flow difficulties by not paying you on time.
And that my friend, is not a healthy outlet for your energy.
How about if I told you that I knew for certain that you will never receive the payment? Where would you focus your energy if you knew that unless you went out and generated that income yourself, your temporary cash flow issue would become a permanent situation?
You know, I’m not saying you stop your credit control process, but what I am inviting you to do is take back the responsibility of bringing income into your business… don’t give defaulting customers that level of power.
If you thought you were never going to be paid by this client, what could you do differently today that could positively impact your cashflow? How would you raise the cash if you had no choice but to do so?
- Host a webinar and promote your products to your community?
- Work with a JV partner to promote your products to their community?
- Promote a complementary business for a share in the profits?
- Sell a complementary service or product to existing clients?
- Give it some thought this week.
You know what else I love about the Law of Attraction? As soon as you focus your energy into creating wealth, and away from the missing income, the cash will start rolling in!
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Generally good advice to maintain a ‘can do’ will do’ attitude and mindset. I have the occasional scammer still, but much less so now I have in place procedures up front especially for private clients. Those people who really want to make progress are generally happy to pay up front.Regards Vince Stevenson