“I would have liked to know that.” I can guarantee that you are going to say this at some point in your entrepreneurial career. Here is what I would have liked to know when I started my entrepreneurial career.
Think about your business. I’ll bet your work hard. You probably put your customers ahead of yourself. If a project is an important one then sleep can take a back seat before you finish your work, right? You are dedicated to produce and do your job well. Most entrepreneurs realize their reputation is really what they sell and they work very hard to maintain it.
Nothing is worse for an entrepreneur than doing the work, selling the product, delivering the results and not getting paid. In my 13 years as an entrepreneur, I have been stiffed just once. Here’s what you need to know about deadbeats. They don’t look like deadbeats. If they did, you wouldn’t do business with them. My deadbeat had two daughters in an exclusive, private girls’ school, invited my family to his 4,000 square foot home for dinner and is a member of a private tennis club.
How do I know about his tennis membership? I get reminded every time my husband plays in his club’s tennis league. My husband routinely sees the guy in the league tournaments. I often tell my husband, “Why don’t you go up to him and remind him that he owes me money?” That’s not going to happen.
So you see, it’s not that deadbeats don’t have money to pay you. It’s just that they’re choosing not to pay you.
I learned this lesson when I was in the oil business. There was one large trucking firm who was known among some suppliers as a payment problem. What did he do? The only way to get paid was to stop off at his office and pick up your check. He actually wrote all his checks out, but never mailed them. He told these suppliers that if someone really wanted their money they would come and get it. He had a stack of checks that people never called about. He got to use some people’s money for months. Then there were some businesses with poor controls who never got paid. He got to keep their money. That should never happen to you.
It’s your job to manage getting paid. Here’s what I did wrong. I had a signed consulting agreement with this man. He was to pay me a monthly fee. When the agreement began he was paying me on time. This lasted for several months. Then his payments got slower.
What was due on the 1st became the 15th. That should have set off all kinds of warnings to me. It didn’t. After all, he was such a nice guy. Well, he wasn’t. I kept doing my job and by doing so I signaled to him that I was one of the suppliers that he could “keep their check in the drawer.”
When I finally asked for my money, he said he was having cash flow problems and would pay me when he could. That was years ago. Notice, he hasn’t stopped playing tennis and his kids are still in private school. I doubt either business is giving him services for free. I was the chump.
Don’t you be like me. If you’re an entrepreneur, and especially a female entrepreneur, one of the first things you need to be able to do as an entrepreneur is look someone in the eye and tell them you want your money. It doesn’t have to be as direct as that. You still need to look them in the eye and say, “I see that my invoice is still open. I can stop by today for the check.” Don’t let yourself work for nothing.
I learned an expensive lesson that hopefully, you will not have to learn. You’ll be on top of your accounts receivables, you will keep it in control, and you will always get paid. That way you can consider my loss to be your gain.
Maura Schreier-Fleming is a sales strategist and founder of Best@Selling, a sales training and consulting company. She wrote Monday Morning Sales Tips and works with sales professionals who want to sell more and get more business.