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Problem Client: How To Protect Yourself From Clients Who Refuse To Pay

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Question: have you ever been stiffed? I sincerely hope the answer to that question is no, but the sad reality is . . .

Nearly all of us have been cheated out of money.

The worst is when you’ve been stiffed by your clients. It can feel downright depressing when you work hard to deliver an outstanding product or a service, and then you get burned.

After all, you were operating on good faith and assumed that your clients would be honorable and honest!

The worst part here is that we have no one to blame but ourselves. (Ouch!)

Look, I’ll be the first to admit that I learned this lesson the hard and expensive way.

I’m a very trusting person with a huge heart, and over the years I’ve been stiffed out of tens of thousands of dollars.

Not to mention all the time and energy I lost beating myself up for being naive or trying to get people to just honor their agreements and pay for what they received.

The good news is that I’ve realized there are a few simple things you can do to protect yourself and keep your energy where it belongs: on delivering value to honest customers, making a difference and enjoying an amazing life.

Click play to learn how to safeguard yourself from having a non-paying “problem client.” You’ll get two word-for-word scripts to use over email or in person, starting now.

We teach people how to treat us. @DrPhil via @MarieForleo

By the way, if you liked this video, you’d also enjoy our episode about setting boundaries with late or no-show clients.

Now, I’d love to hear from you.

Have you ever dealt with deadbeat clients or had trouble getting paid? How exactly did you handle it?

If you haven’t dealt with a non-paying problem client yet, let me know the specific insight you learned from this and how you’ll implement it moving forward.

We all know that money is a super hot-button topic, so let’s make sure we keep our comments constructive and geared towards collective growth and learning.

(you’re always so good at that, but it’s a useful reminder for us all anyway :))

Remember to be as specific as you can. Your wisdom and experience can make a huge difference for others.

Thank you, as always, for reading and watching!

P.S. If you want more business training, head over to B-School right now for our free three part video series.

You can also see our brand new Live Your Dream site here: watch videos and read profiles of B-Schoolers from around the world in action.

With love,

xoxo

Marie Forleo

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Read the comments or Add yours

Udo, the Girl -- GIRL AFTER COLLEGE

Very frustrating situation! I am a tutor, so I never have issues with people NOT paying, but I do have issues with people wanting really, really reduced price. I finally started simply rejecting those clients (choosing not to work with clients who do not want to pay the full value of services). And discussing money BEFORE the service is rendered is the #1 thing.

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Rita

That’s probably a whole ‘nother episode, the bargain hunters! I’ve found the same thing, if people ask for a reduced price before you start, they just aren’t the right client.

I do a 50% split, half upfront and half after once work is done but before the final product is handed over to the client. As a web developer it works a lot easier that way. I’m sure I would have trouble getting paid if the service was complete and then I asked for payment.

One thing that payment upfront lets you do is provide rocking customer service after they’ve paid you, even when you don’t “owe” them anything anymore and amaze them to pieces!

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Sarah at Oh My Raw!

Hi Rita, I couldn’t agree more. When I was starting my coaching business I offered a free session and, ironically, not one of my “free” sessions turned into a long-term client, despite the fact they communicated the high value they received during the session and how they were quite excited and thankful.
I’ve come to accept that people have to place down a dollar amount, even if it is very little as you are gaining experience (beforehand), in order to be a client you want to work with. Of course, I’m sure there are exceptions but usually bargain hunters are not your ideal client.
Sarah

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Laura

Hi Sarah!

I agree completely! I know even for myself if I don’t pay for it, I don’t take it as seriously even though I may absolutely LOVE the service! I shamefully but honestly admit this :-)

Laura

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Linsi

Rita, I’m curious if you’ve ever had an issue with that final 50% payment. I do websites as well and we have a client whose site is finished (approved the whole way through) and now that we’re ready to launch and asking for final payment the client disappeared. He first said he wanted to hold off for a while, even though we rushed to meet his 1 month deadline, and when I said we could talk about it but needed a timeframe he disappeared. It’s been weeks now and I have a developer and graphic staff that need to be paid :/

Just curious if you’ve ever run into this, where a client puts off that final launch ‘indefinitely’ and leaves you hanging. I’m tempted to do a a 50% – 40% – 10% launch policy but I don’t know if that will fly with people. Thoughts?

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Andrea

Linsi: That’s frustrating. With web design clients, simply don’t launch the site until the final invoice is paid. This doesn’t take care of your staff but it might get you the money faster.

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michelle martello

Another web designer here – my standard for years has been a 30% deposit, 40% at design sign-off and 30% prior to project launch. I’ve now moved to 50%, 25% and 25%. If someone isn’t willing to put up the funds at the outset (especially if you are an established designer) then you WILL likely have problems getting paid later.

Whenever I deviated from that standard I ran into issues — especially if I adjusted my fee to work with friends. I had one “friend” take over 2 years to pay me!

Now I have a line item in my contracts that if a project exceeds a specified time frame an additional monthly fee is assessed. I also have a “project abandonment fee” – if I don’t hear from a client in 30 days, and they come back later, they are assessed a start-up fee and I require full payment for the rest of the project before get my team started again.

Clear contract language clarifies a lot of these situations – and after a few years, you often get a “feeling” of who isn’t a good fit for you – especially if they hesitate to pay at least 30-50% upfront.

Marama Carmichael

I’m a web designer too, and I do sometimes get people dragging their feet at the launch. I’ve never had someone disappear totally though that late in proceedings.

I give an estimate and request a deposit of $500 at the start of work for sites under $3000 (more for bigger sites), then progress payments as we progress, with final payment due before handover. This allows for changes in the scope which I often get with small businesses. They really don’t know what they want clearly until they see it in my experience.

Michelle Martello (couldn’t reply to your post for some reason) How does your abandonment fee work?

My drop offs are usually at the deposit stage – so I haven’t done any work on the project yet and just cancel the invoice at tax time, but occasionally I get an abandon half way though, OR response slows down and a project is hanging because the client is focusing on something else. I’d like to get a system in place that keeps things moving and an abandonment clause sounds like a good idea.

Thanks for your video as always Marie!

I need to start taking payment for smaller graphic design jobs upfront. That’s where I fall down. I have a client or someone I trust who needs something for a launch. We do it for deadline and let them have it invoicing it AT handover and then payment is delayed. (Not refused, but I often have to chase it up). I need to change that to invoice and THEN files sent…

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michelle martello

Hi Marama -

A few things I do that may help:

1. I typically have a 5-6 month wait list – and I always request a non-refundable deposit to secure their spot on the list. This motivates clients to really commit to the project.

2. I will not start a project until all copy/content has been provided – again, this gets clients motivated and prepared to work.

Nicole

Linsi, this happens to me as well. In fact I am waiting on 3 people who currently their websites are waiting to go live right now. They have just disappeared. Luckily their websites are still on my demo sites (I have a policy, no website goes live without payment – after too many non-payers).

But I still spent a lot of time on the websites and I really want to be paid.

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Linsi

Ladies, thank you so much for the input! Andrea, Michelle, Marama, Nicole – it helps a lot to hear varied approaches.

Nicole I’m totally with you! We put SO MUCH work into this site and need to be paid for it, plus it’s just painful to see our beautiful site just sitting there.

Michelle, great policies, and I will definitely ‘clean up’ my contracts from now on.

Cathy Pullins

Marie,

Asking for money in advance also aids the buyer by leading them ‘not into temptation’. … the temptation to buy something in a hope of being able pay for it Because if you hope and pay not — you hurt yourself AND the one you are obliged to.

On the other hand, we have been bilked out of BIG money paying for services that were not performed. So…solution? Some kind of pay in pieces as you go?…

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Priscilla

Marie, Having clients worry that I won’t do the job is exactly why I didn’t want to bill for work beforehand in the first place! Normally, I charge 40-50% up front (depending on scope of project), but this time it was a small job that took just a few hours to do). Problem is, now the client is taking her sweet time in paying. It’s been 1.5 weeks now, but still nothing.

I’m used to clients who pay right away (ie. some as fast as within 2 hours! but most within a day or 2.)! Is such prompt payment unusual (ie. have I just been really lucky)? Or is taking over a week for clients to pay the norm? (It’s only a couple hundred dollars but still, it would be nice to be able to move on to other things, as entrepreneurs, we have enough things to worry about!

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Amy

I’m a hair stylist working in a high end salon. This is defiantly one of my biggest struggles to do deal with in my profession. People are constantly trying to talk me down on my price, or renegotiate. It’s insulting, and as many of you have said if the client is starting the relationship asking for discounts we will not be a good fit. In salon services are easy to control the price, however it’s out of salon services that become a problem. Client present a wedding/special event/business trip I accompany them on as one way to me-we negotiate pricing, then in the moment they require much more of my time. It hard to get more money out of them for my time in the because originally I did not quote them, however they originally misled me on how much of my time they were Goin to need. Any ideas on how to prevent this from happening? Also since I develop a close relationship with clients a lot of times clients blur the line between friendship/and business with me. How do I make the line more clear without being insulting?

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Claire

Can completly sympathise here, I am in same profession and have experienced everything you just mentioned. I am so strict now with my boundaries. I believe if they respect the relationship with you, they won’t take your for granted and will respect your rates and time. I have had to get really strict with clients and state clearly a rate and then a rate for any extra hours, because otherwise you will be there forever, on the original quoted rate. I would say, you should set your rates and be clear on how much time that buys and then also make them aware of a rate for if you go over the allotted/quoted time.

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Rashida B.

Hi Amy!

I used to do weddings and events. I had a strict policy that payment was due BEFORE the day, and also in the contract it would state how much each additional hour would be. I used to carry around those old school credit card sheets that my clients were required to sign if they wanted to work with me in addition to the contract that stated they would be billed for any additional time THAT DAY (nope I’m not waiting around for you to pay me). Right before I’d finish the last whatever it is that they needed, I’d pull that slip out from my toolbelt and say. “Hey remember when we discussed overtime? It looks like we’re three hours over here, here’s the slip that you signed, I’ll email you your receipt.”

Anyone that’s reluctant to sign your contract in the beginning is not your client. It’s alway best to get the money details out the way in the beginning when there’s no harm no foul and you both can walk away if you can’t agree.

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Jennifer

Hi Amy and Marie -
I used to have a hair salon back in the day – and every time any of my clients really complained about the price I would put it up! I was really passionate about giving quality service and I thought to myself that if you can’t see my value I don’t want you in my shop.
I ended up with a higher calibre of clientèle who where really appreciative of my years of experience, knowledge and the quality products and service.
The Moaning Mini’s soon disappeared and I could work less hours for more money and pay my staff more too.
As for weddings – I would do a try-out session with the bride and as many of the bridal party as possible for which they would pay up front. So I knew how long and who I would be working with on the day.
If they wanted to go ahead the try-out payment was treated as a deposit with the final bill to be paid as I arrived or before or I would not do the work. Of course you factor in the costs of try-out session as well and I would charge for the time I would be there inclusive. So no additions that I would have to be chasing for payment. Just like on a photo-shoot – this is my rate for the day until a fixed time – and I’ll take care of you the bride as a priority with anyone else next.
You have to believe in what you deliver and “Teach people how to treat you”…
I hope this helps Amy – good luck.
Thanks Marie for another brilliant Q&A

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Julissa

Jennifer, well done for believing in your work and being confident enough to stick to some strict boundaries. This is definitely the best way to work with only wonderful clients! :)

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Shirley

I can relate to this in a way. When I am hired to be a property manager for a single family home sometimes I offer “fee paid services” where I do the tenant placement and I get paid the first full months rent and the owner acts as the manager. If they are out of state they can hire me for a particular service like hire a contractor and I am paid to oversee the contractors work. The owner pays the contractor and also pays for my service under a specific managemnt service.
One time the owner thought the price was too high and tired to bargin it down. He really pushed but the contractor would not come down. So he tired to get me to cut my fee. I told him that I could not lower my fee, that it took my time and my watchful eye to keep the contrators work in line all for him. I had to really stand up to him and even said, “If you don’t want to pay me, there really isn’t anything I can do to make you, but the contractor will put a lein on your property, so I would suggest that you pay him. As far as me, if you don’t pay me my fee, then I just will not be able to assist you with this anymore. After all I am not getting paid a monthly management fee to handle these things. And I will be happy to let you out of our agreement.”
He responded with, “I really made you mad!” I was only negotiating. That’s what you do in business.” So now we are still in contract, but we have a better understanding. And if I had talked to him about this before hand, I don’t think he would have signed up with me and besides you can’t talk about issues that may never come up!
What I really got out of this was that when it comes to negotating I have to feel confident enough to explain why I charge what I charge. That you are getting a professional and tell them to look at the savings they are already getting with me!

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Senait

I’ve worked in a small business where I watch people haggle with my boss on prices all day. I couldn’t help but feel for him, though he dealt with it really well. And I learned from him.

He would simply reaffirm that the prices represented the quality of service they were getting in an honest and confident way. Maybe in your store you have great products you use, and you’re in high demand, and you have plenty of customers you’re juggling. Remind them that the price ensures the quality of service they’re getting and it guarantees it will always be consistent! So long as that’s true – and you’re efforts are really worth the dollar amount you’re quoting them – you’ll never lose sleep, and they’ll never want to leave you.

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DailyTarot Girl

Ugh! I agree. I have had countless people try to get my services for half price or less….I find it infuriating. I am a professional bellydancer and I have encountered this more often than not in this line of work. I also do other things (personal training, Tarot reading, Life coaching) and I have never ever encountered it in those fields – just with bellydancing.

I always politely decline to do the work for less than my asking price, but I still have not mastered the art of not taking this personally and getting my panties in a twist about it.

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Shannon Holand

I recently watched a photography workshop with a successful photographer who’s reply for those people asking for discounts is: “Gee, I wish I could but…” fill in the blank. She had several comebacks but my favorite saucy one was “Gee, I wish I could but I have this annoying habit of eating 3 times a day!” If only I could pull that one off without sounding snarky. LOL

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Gare Thoms

Girl i agree with you 100%, if they com plane about the fee just say by… thats simple

in my business i only deal with people that wants what i have and willing to pay for my service..

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Robyn

Wow is this a very frustrating situation.

What I had to do for non-payment clients is to block them from receiving our amazing services and then charged them an inconvenience fee to reinstate their membership. This has situation has made me move my business from a credit account to cash based and boy is it so much easier to run things when you have the cash in the back.

Also someone once said to me that a upfront paying client that honors your policies respect you and your business. This also opens up the mode of communication to receiving more business and giving out better and more effective offerings that my clients absolutely love.

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Darlene

Robyn, I love how you take it to the next level with “charged them an inconvenience fee to reinstate their membership.” Exactly! Because it does take extra work to deal with that.

Yes Marie. So glad you told her to charge up front. For a one time fee like the kitty situation, it’s a must.

If it’s a service that takes a little time; perhaps ongoing service or a YouTube campaign, or other ‘done for you’ service, it’s OK to break it up.. but always, always get something up front. We all know that before we even meet with our new customer, a lot of prelim work has already been completed.

~ darlene

Sidenote:
My hubby is a new home builder. In our town, builders give free quotes to perspective clients even tho putting together the quote can cost several hundred dollars and 30-35 hours of time.

Problem is, if no one else is charging, how do you?

Because he decided he was good enough.. and guess what.. we found pp are willing to pay him for the quote. Does he lose possible clients? Probably, but he saves a ton of wasted time and money with tire kickers.

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Priscilla Biju Then

The timing of this video post is uncanny. I’m a web/graphic designer who has a client request that wants an e-commerce website. After several back and forth versions of quotes, she insisted on sending me a cheque for the initial payment by Express Post even though I told her regular mail is fine, but then at the last minute she wanted more services tacked on (social media). She agreed to the price over the phone but when I sent her the contract, she said the price was too high. It’s been almost a week and she still hasn’t signed. I spent over 2 weeks full-time hand-holding her to explain what she’d need, reserve a domain name, do the research for her website, explain web lingo, write a 5 page contract, etc. and now she’s not signing.

I’ve decided this very week to start charging an amount UP FRONT, BEFORE I start any working for someone in future. Because I provide value to the client when I’m in the research/negotiation process . Glad Marie put this video up, because I have 3 new requests to do websites and have a hard time determining a price and asking people to pay me before starting to do a quote. I think I will charge 10% up front (ie. $300 for a $3,000 project which is a “guestimate”, but my intuition has always proven spot on).

Thank you Marie for putting up this video!

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M

Priscilla,

I don’t think you can charge in advance of doing a quote (you haven’t even done any work yet…doing quotes/estimates is cost of doing business), but you CAN put together common packages and list them in plain view on your website, like:

$1,500-$2,500
Basic Site that includes X (5) pages, 3 concepts, 3 rounds of revisions, etc. (you fill in details)

$2,500-$5,000
talk about a more robust site here and common things it may include

$5,000+
write up summary of what typically is involved in site of this budget and for them to contact you for a custom quote

Adjust price levels to whatever best fits your packages…you could have 3-5 packages.

This will remove bargain shoppers and also let people know in advance what services they can expect for their budget range.

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Sun

The home builder just proved that you can charge for quotes and get paid for them. I think you just have to start doing it and see what the response is. As the website designer said, she does provide value in the research stage. It’s not written in stone that you can’t charge for an estimate and neither that people won’t pay. Rules can be changed.

Priscilla

I’m sorry I somehow missed your comment until now, but thanks for the input! You have to do the information architecture up front in order to give a proper estimate for bigger web design projects, and because this can take many hours to do, often a fee is required up front.

The benefit to the client is that they will no longer have to ask another designer to evaluate the components and features of a website, nor have to make major recommendations, because all of that work will have already been laid out.

I know a well-known marketing consultant for designers (Ilise Benun) who teaches designers to charge a fee up front (ie. $500) when doing a more complicated website in order to assess the client’s website needs.

Hilary

M,
I DO think a designer / website designer can charge for an estimate in particular situations.

For me, I put a time limit on my initial meetings and estimate process. Almost everything I do has the estimates as part of my cost of doing business.

HOWEVER I have had a couple of people come to me with websites that were expected to be elaborate enough to need a planning phase. These were sites that weren’t going to fit in my time limit. For that I create an estimate for the planning phase and an overview of each of the phases they will likely need (not including cost for phase 2+ since things decided upon in the planning phase may affect that.) From there they can take the planning that gets done and we create an estimate for site development (or they can take the plans to another developer if they really want. I don’t plan for it to be taken elsewhere so if they choose someone who can’t implement what’s planned, that’s not my responsibility.)

My pricing however can not accomodate say 40 hours of prep work needed for an estimate on an elaborate site for no pay – basically on speculation that someone would hire me. Yes, I get that a certain amount of time has to be spent as part of the sales process and cost of doing business in any profession but that doesn’t mean you should be doing things that are more akin to working for free.

This is why I have capped the time I can work on each estimate. This is also why I do my first meeting as a “getting to know you and your project” meeting. I can tell from that meeting if I can write the estimate up in my typical fashion or if the project will need to be broken down into phases.

Whether or not it’s reasonable can be a matter of process, presentation, and actual value. If the estimate just says “Wordpress site $2,000 – $5000″ then yeah, there’s nothing there really to charge for. But if it covers things like that business’s target market, their goals, the look and feel of the expected site, features and functions…. basically if it has more custom detail and planning then that’s no longer a simple prefab “package” and it should be something that the client pays for.

Shirley

I like that. I use to be able to do that in my business, as a property manager, but when the market got a lot more competive not only did it drive the fees down that we all use to get, but it also drove out being able to charge an upfront fee. Then I started doing an Exit fee if they wanted to get out of the contract. I had a few that wanted to cancel for whatever reason and they did go ahead and pay the cancelation fee.

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Priscilla

Might I add to the comment by “M” that for basic websites, yes, you can have your prices listed.

But when doing site architecture for more complex websites, it requires at least 2 or 3 meetings, each about 2 hours long, to understand a business, as well as current website evaluation (2-4 hrs), competitive research and website evaluation, etc. Then making recommendations for a website with proposed features, estimating the time required AND the individual price calculations…. whew! The whole thing can take a week to do; no wonder they suggest charging $500 (or a 10%) minimum!

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Christina Ambubuyog

Robyn, I agree with Darlene loved how to have a reinstatement fee. I will definitely start to add that to my agreements as well. Thank you for sharing that!

One idea that just came up right now which I have not yet implemented is having automatic payments come on the first of the month, that way if a client defaults let’s say their credit card has been declined, then that months sessions can be on hold until payment is made. I have had some recent issues with payment from several clients and it’s definitely made me take a look at how I am handling things.

And Marie love how you talk about handling your business more seriously, I’ve noticed that when I do that by changing things that no longer work and having more control over situations that I can control then the quality of my clients definitely increases which is definitely a reflection of my value increasing in how I treat myself and my business! So happy you touched upon this topic today!

Thank you!
~ Christina

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Jessica

Great advice, Marie!

I was really worried about this when I first started my business (I’d heard so many horror stories), so when I read Million Dollar Consulting and he said he offers a discount for pre-payment in full, I decided that was what I would do too. It’s worked really, really well, and has kept me protected from this situation, plus clients appreciate the discount. It’s nice because I feel like I’m giving them a little something extra for saving me the potential worry.

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claire stone

oooohh, not only was the video great, but your point Jessica has just answered about 3 things for me. I want to raise my prices in April, but didn’t just want to hit people with a new price. I also want to get folks paying advance and I do, naughtily, like giving a discount, so ta da!!!!! I raise my prices, people get a discount if they pay in full in advance, and they don’t if they don’t!! Yeah. Thank you for that little bit of clarity magic!

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Holly

Give them a discount for paying in advance, and give them a clear deadline: Get X% off by X date. Good luck!

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Cecilia

Hey Jessica,
I like this idea, it appeals to the part of me that likes to give people a little deal and to the part that would like to be charging up front.

Thanks!
Cecilia

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Racheal Cook

Yes the discount for paid-in-full up front is HUGE! I’ve been offering this and those clients are always so much easier to work with.

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Helena Osorio

Hi Jessica,
Will check out that book and the discount for pre-payment sounds like a great idea.
Must try that.
Have a great one!

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Shay

Definitely a very frustrating situation! I love your advice. I personally have a pre-pay policy for all of my products. Since I have a subscription-based business, I have clients pre-pay three, six, or twelve months in advance. The longer the pre-paymnet, the bigger the discount. So far it’s working great!

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Kisabird

Love the idea of the longer the contract, the bigger the discount! Glad to hear this is working so well…my new business will likely have subscription based component so I like this idea a lot. THanks for sharing!

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Anna

Yes, not paying clients may be so frustrating!

I had this problem in the beginning of my business life: any time someone was interested in my offer, I was SO excited that I would go and do anything to serve them and to please them; I would say “yes!” to any business oportunity, and I treated it more like an adventure, ane less like a business.
I also struggled with the issue of asking for payment, and – just like the Author of this week’s Q – I was afraid I’d be rude or impolite, if I asked for the money in advance. In fact, I had a feeling of “not seserving” it!

However, after ending up with no money and loads of work done for somebody for free, I started valuing my time and energy, and started to learn how to care for myself. That’s not easy, but I very rewarding.

I cross my fingers for you – good luck in your journey!!!:)

And THANK YOU, Marie!:)

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Shan

The “Live Your Dreams” site is gorgeous, inside and out.

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Grace

Totes agree, Shan! The videos, the colors, the whole set up is beautiful!

And yes, I have definitely been stiffed but not by a client. I have been stiffed by a web designer and SEO guy who didn’t live up to the hype.

I know now to research history, reviews, and client testimony before hiring someone as important as a web designer.

Thank, Marie. Lovely video!
P.S. Is Michelle Vargas still your videographer?

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Leah

This is why I had to get out of the one-on-one services business. It took such a toll on me to continually bother people about paying what they needed to pay, worrying where the money was coming from, wondering if I would get what I wanted. I wish I had seen this video first!

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Lisa | Practically Intuitive

Oh man! This recently happened to me with a client who signed up for my three month program. She hemmed and hawed even after we started and when her next payment was due, sent me an email saying she was having a panic attack and then POOF! Disappeared. I let her know that we could work this out together but I couldn’t help if she was hiding. POOF!

I finally sent her an email dissolving our contract because I did not want to chase her for the money and since she didn’t wasn’t forthcoming about what was going on, I couldn’t help.

It felt really yucky and sad.

I had my own nudges about her money issues early on and ignored them. Now I know to pay attention to that even more even if it’s uncomfortable to deal with.

Thanks for the words of advice Marie! I look forward to everyone’s thoughts and comments on this topic.

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Natalie MacNeil

Every time I’ve had an issue with not getting paid, I’ve had a hunch it might happen. You can learn a lot about someone in your first couple interactions and I pay a lot more attention to that now, and I’m fortunate I can be a little picky with who I choose to work with now. It wasn’t like that in the early days of starting my business though…

Funny thing Lisa, I’ve had two people tell me they were having a panic attack and couldn’t deal with paying! haha :)

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Laura Wallis

I always recommend requiring payment up front, and offer a money back guarantee for three months if it is a product. You can also touch base halfway through a project with a form to document how things are going, and make sure you are both on the right track in case there are any problems.

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Karyn Wagner

Creating a consulting package was the absolutely best thing I ever did for my business. 6 hours or 12 hours. One payment or two. Makes it super easy for everyone. No more invoices and late payments. Love the advice Marie!

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Victoria Gibson

Just make payment in full a requirement before you commence and re-iterate it on your invoice. Most people don’t even question it!

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kellie Adkins

Great advice, Marie!! I particularly like the point of you valuing your business so others will, too. I had a problem client that always wanted to wheel + deal with me. Even though my policy is paid up front {on booking} she wanted to pay half now, half later, could she get a discount, etc, etc, etc…I gave into this initially + I paid dearly for it. She got so behind on her fees that I finally FIRED her. Yeah, it hurt to lose that steady stream of income, but I look at it like freeing me up to work with people who are perfect for me + who are happy to pay me what I’m worth in a timely fashion.

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Justine

Kellie,

This is inspiration to me today. Thank you!

:)

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jackie harris

Hi everyone – when ever I have a late payer, I send them a version of this email (tailored to the situation) – it works like a charm everytime. The last time I had to send it I got a grovelling letter of apology from the client’s senior partner who gushed at how important I was to their team and a promise that it will never happen again. Use it carefully though – you can only use it once per customer. Also note, this is for clients with whom you have an ongoing relationship with – and wish to continue working with.

Dear XXX
We’re a week away from another month end. It was only yesterday I got my cheque for November’s bill paid into the bank. This morning I’m full of dread knowing that the cat and mouse game of; me chasing you for payment and you hiding and ignoring my calls and emails; is about to start all over again. On average I spend between two and three weeks of every month chasing you for payment. I think it’s time for this situation to stop. My solution to this is below. Before we get to that, as your PR & Marketing adviser, I want to point out the potential damage you are doing to your firm’s reputation.

1. You’re not living up to the hype – There’s an extraordinary irony in that I’m creating marketing messages that promote the integrity of your organization. Yet behind the scenes, you force your sole trader suppliers to beg and plead for every invoice to be settled. Where’s the integrity in treating small local suppliers with such contempt?

2. Everyone is a potential client – In the world of professional services, every supplier is a potential customer, and more importantly, a potential referrer of work to your firm. If I were in your shoes, I’d want to make sure everyone I did business with was a raving fan and evangelist for my business. You’re closing off an important pipeline of potential work. Marketing and PR is not just about leaflets and websites – its about behaviour and attitude. To quote advertising guru David Ogilvy – ‘You have to live the brand.”

3. Reputation is everything – No matter how much money Starbucks throw at PR, they will never lose the tag of ‘tax dodgers’. Much of the work we do to raise your profile could be eroded if you get yourselves a reputation as ‘bad payers’. A company’s reputation is a 360-degree process.

So, where do we go from here? My agreement with XXXX, which began in January 2011, is that I give a 20% discount on fees, and the firm pays my invoices promptly on 30 days. You get the discount, and I believe I provide a good service. It’s not unreasonable for me to expect you to honour your part of the deal. This is after all how people with integrity behave.

Chasing and pleading clearly doesn’t work and to be frank I’m exhausted by it. We need a different approach. I’m done with the begging.

When an invoice reaches its due day I expect it to be paid. The simplest thing to do would be for you to set up a standing order – then all this unpleasantness instantly disappears. If you won’t do that then this is how things will be. If the invoice is not settled within seven days of the due date, I down tools and cease work on any projects in progress until that invoice is paid. This means I expect payment for my December invoice to be in my bank account no later than Thursday 7th February.

If that doesn’t work, then really I feel we’re moving perilously towards the slippery slope to parting company. No-one can afford clients who won’t pay, and I’m pretty sure you wouldn’t tolerate this kind of treatment from your own clients.

Naturally my dearest wish is that we can sort this out, put these problems behind us and work together for a very long time. There’s so many fantastic things that could be achieved. We’re on the right track so it would be a real shame to spoil it all because of late payments.
That’s all I have to say really. It’s now over to you.

Jackie

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Sara

Thanks for including this Jackie! I hope to never need it but love your tone and language – respectful of yourself and business and pointing out clearly how misaligned the company is while still being kind.

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Christina

That is excellent, Jackie!! Not only do you remind them of the precise terms but exactly how their lack of integrity is being expressed in the world. Thanks so much for sharing!

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Racheal Cook

This is fab Jackie! Since expanding to include some done-for-you services in addition to consulting, I’ve been experiencing some issues with clients and will be saving this email as a template for the future!

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jackie harris

Glad you like it – I think sometimes we forget that there’s a world of difference between late payers and non-payers. I find the challenge is not for the one off projects, but for the retainer type clients. It’s about finding a ‘firm but fair’ approach to this. Anyway, emotion works wonders.

I love your website Rachel – beautifully done.
Jackie

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Marinda

That’s brilliant, Jackie. Thanks for sharing! I’m saving this as a draft e-mail just in case…

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Priscilla Biju

So well put. I like how you “call” them on their behaviour without name-calling, all while maintaining a high level of professionalism. (And as a former business writer, I don’t see any spelling mistakes/typos — another sign of a well-put, professionally written letter!)

Thank you for sharing, Jackie!

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Linda Simms

Wow Jackie that is a fierce way to come across to those folks who do not value your services. I love the way you are direct and straight with your customer explaining the damage they can cause to their own reputation. Smart and on point! I do understand too that this is for ongoing relationships already in place….but I can see it working each and every time…Good Tip!!!

Lin

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Logan

Absolutely brilliant! Thank you Jackie. Sharing this and saving a copy as an email draft..though I hope I don’t ever need to use it :)

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Shannon Holand

Damn girl – you are good!!! I’m sitting here trying to think of friends who could benefit from having this letter in their arsenal.

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Laura

Hi Marie! I loved this video. Well I love all your videos but this one especially because it addressed one of the fears I have about going into business. I will definitely be using the “pay before you play” concept and plan to build that into my website. I’ll of course use a bit more catsy, I mean classy language ;-)

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Shell

I agree with several other commenters. I do mostly from scratch custom design items. While I do not charge a design fee, once the design is finished and the items to be decorated are finalized, it’s half up front and the second half when complete and BEFORE it ship it out. If someone balks, then, SORRY that’s my policy and I’m sticking to it. I have only had one client hit me with a charge back for a credit card purchase after she received the items. Thankfully, I fought it and won. Thanks for all you do Marie. I CANNOT wait for Bschool!

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Robin Hallett

Thanks for tackling this today Marie :)

It comes down to our own comfort level with abundance. Do you believe you are worth it? Are you excited about earning an excellent wage for the excellent service you provide?

Feel confident about creating a policy about payment in advance and deposits – collect it upfront, you’re worth it!

Hugs and love,

Robin

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Jess Weagle

You gotta nip this in the butt! An easy solution is to sell packages of your services. That way you know they are committed to your service.

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Linda Simms

Absolutely!!! I just recently learned that packages solve many solutions to cost especially for those who think they cannot afford it. By the time they sign the contract and pay for a package service, they have no choice but to follow-through. Not only does this help you and your services continue to thrive but allows the client to see their self-worth as well by doing what they say and meaning what they do. Nice!!

Lin

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Ariana Blossom

What a fun episode! I love an edgy joke.
I’ve dealt with clients who don’t want to pay my rates, or don’t want to pay upfront. It took me losing a significant amount of money to realize that I had to play, what felt like to me, hardball. I have a contract that details payment schedule and cost that clients have to sign. I make sure to work up my confidence BEFORE meeting with a client who needs to pay, so I don’t play soft with them. So far, the results have been more income and more respect.

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Lana

Love this episode Marie — awesome insight! I’m in the ‘midst of creating my first online program, so this gave me some great pointers. Sending lotsa love your way (by the way….LOVE ‘Live your dream’. Very beautiful and inspiring). xo

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Claudia Richey

Ugly situation. Non-paying clients have happened to me a few times, and this even with prepaid sessions. You can always run into a situation where cheques bounce or a credit card payment doesn’t go through.
With one client I even considered hiring a collecting agency and opted out last minute as I considered her situation.

What I do now is1. Always take pre=payment and monthly postdated cheques for ongoing services, with a 30 cancellation policy in my contract I know that I won’t get any surprise cancellations.
2. Have a very clear 24 hr cancellation policy. That way, with prepaid sessions, I know I’m still getting paid if the client doesn’t show up, and so does the client.
3. Consider the persons situation and be gentle. Yes, time is money. It irks on so many levels to not get paid. But before getting upset and nasty I consider letting the client go and not chasing after the money they owe me. Simply because I don’t know what their situation is. At that point at least all I have lost is my time.
But by staying calm I get to stay in integrity and keep my dignity. :)

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Claudia Richey

That was meant to be 30 Day Cancellation policy. ;)

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Sara

Okay how did you manage to turn kitty biz into something so fun??!

Love the scripts and think they’re completely applicable to any business. I find it hardest when billing clients monthly over the course of a longer engagement – say 6 months or so. I’d love to use an auto-pay service that automatically bills my clients so I don’t have to remind them and manually invoice them each month. Would appreciate suggestions if someone does this already and has a service they love.

Thanks, Marie, for addressing a potentially awkward and power usurping topic.

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Claudia Richey

I don’t know if that applies to yours services, but if you accept Paypal payments it’s fairly easy to set up a payment plan or subscription that has them invoiced automatically every month or whichever time frame you agree on.
Claudia.

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Sara

Thanks Claudia! I use PayPal but when I look at their service options, I never saw a subscription pay option. Will definitely look into it.

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Andrea

A tool you should look into is freshbooks. It’s an invoicing system that allows you to automate many functions. You can set up recurring invoices.

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Sara

Awesome, Andrea, I’ve heard of them of course, but never thought to look into them for my (right now) small outfit. I will now though. Thanks!

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Andrea

Sara: It doesn’t matter what size your company is, because there’s multiple plans ranging from free to $40/month. I use the lowest tier of the Freshbooks paid version and it is SO worth it. The only difference between the free and paid is that you can have more clients. The alternative is to delete a client every time you add a new one. The plan I’m on allows me 25 clients at $20/month. The $30 and $40 plans allow unlimited clients. With all plans you have unlimited invoices, Paypal integration and more. There are also add-ons that integrate with newsletter programs such as Mailchimp & Constant Contact, e-Commerce tools such as Shopify, project management tools and more.

They recently release apps for iPad & iPhone so you can be invoicing while in a business meeting.

I’ve been a fan for years. They’re also local to me.

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Dedi

I have used Freshbooks before and LOVED them..they are great with any professional service business..

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asha

hi marie.hmmm. though i dont sell things as of now.i am kind of a selector for many. i go around shopping for many people as my selections are liked by most[in garments and accessories] but time and travel costs are borne by me.i will buy and send them too.but nothing in it for me.like i saw in the video i think ‘she is my friend, how can i ask her for money’.some make me buy things but never pay in time.when i ask they get kind of upset with me.i am a sucker for helping ladies and i end up suffering!!!!!!!!!!
well it was nice watching u today. i will harden my heart and say sorry,dont have time?!

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Christina

What a great topic! Thankfully I have never been ‘stiffed’ however when I first started as a coach I did a 6 week free training in exchange for a survey filled out at the end. It was really frustrating when one of the women refused to fill out the survey or return any communication – after I had given 6 weeks of free coaching! The Lesson for me in this was that now I know my services are worth paying for and I will never again give them away for free. I always require payment up front. What’s great about this community is knowing that even in the rough patches, you aren’t alone. Thanks, Marie and fellow B-Schoolers!

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Heather Chauvin

Another kick-ASS video and training Marie.
Permission that I am on the right track.

When I catch a client REALLY wanting change but nervous to take the leap I say. ” Change happens when you go get your purse and give me your credit card number.” Because it really does. Money and personal value go hand in hand and when someone steps up to the plate and invests in themselves THAT is were the magic happens.

Love your heart and passion Marie. Thank you again :)

xo
H

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Helena Osorio

”Change happens when you go get your purse and give me your credit card number.” That’s awesome! Love it. Can I use that?

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Ryan Smith

What I do is:

1: Payment first, then service.
2: No refunds. That way, I must be the one to honor my commitments instead of the client.
3: Work closely with the client with a friendly and helpful attitude. High quality service brings high quality clients and may help to prevent payment problems in the first place because the client trusts you enough to deliver.
4: Form the habit of doing more than paid for. I often include freebies and surprises in my audio design services, such as extra sounds and streaming sessions to make the process smoother and produce more accurate sound effects. Not only does it feel good to hear their approval, but this may turn first-time customers into regular clients. :)

I hope what meager knowledge I possess about the subject is useful to someone.

– Ryan

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Chetan

Hi,

I have recently experienced this but as you rightly said that policies and script should be intact.
I have provided consulting to one of my client on online reputation management I have done 3 hour session with them on how to execute it.
Unfortunately now when i sent invoice they are not interested to pay.
IT SUCKS
but i think that feeling is good for our improvement.
Thanks for your tips Keep Rocking

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Brigitte van Tuijl

I’ve been in business almost 10 years now, and until recently everyone always paid me on time and upfront.

Last year I made an exception to this payment policy because it was someone I knew and therefore thought I could trust.

Unfortunately, that trust was totally misplaced. She didn’t pay, didn’t communicate about it, neglected my emails, phonecalls and final reminder by snail mail.

I’ve recently handed the whole thing over to a debt collection agency. It was a difficult decision for me, but I’m glad I made it. I’m not sure how it will turn out, but I know that I’m prepared to go to court if necessary. Not getting paid is unacceptable, and I take a stand for my money.

Good luck to anyone out there dealing with this – it’s not a nice thing to experience, and your emotions can make it harder to deal with it effectively.

So set your boundaries, be strict about them and don’t take any crap from anyone :)

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justine

oh, I know the feeling!!

as a jewelry designer, I used to deal with this all the time. Until I noticed that my bussiness woudn’t grow if I didn’t get paid for my work right away.

What did I do?
*I quit selling my jewelry in unreliable shops that would sell my work and pay me whenever it worked for THEM.

*I charge up front (yeay for the internet!) ALWAYS.

*Custom designs are paid up front to! Even if they would have to wait more then a month to get their piece delivered .

RESULT: the real clients came along, and the not-paying ones disappeared!

No more shame, if we want our bussinesses to grow & flow, we need to learn how to charge!

:) Thanks Marie for the GREAT ADVICE!!!

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Debi Berndt

Interesting, I found the higher my rates, the higher integrity of client base. I used to struggle with getting paid from clients and have them looking for discounts and deals when I charged nothing. When I raised my rates and standards, I attracted better clients. Charge more, get paid. It works.

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Cecilia

Very cool Debi, I like this. It’s been my intuition that this is true, so it’s good to hear it confirmed.

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mandeep/melanie

Sat Nam! Cat-as-trophie has been adverted, thanks to your A to this Q. I live in a small Southern Utah town where the general population is ultra conservative on all levels – business especially. My Yoga and Mediation Healing Center is starting to Thrive in the last year, after 4 years of figuring it out, due to my placing a true value (on myself) on what it is that is being offered. I teach the core values of prosperity and abundance – empty handed you come, empty handed you go. My daily classes are “by donation”. This has created an opening for folks to relax about giving money for a service and understanding the concept of giving to receive and vice versa. Now, I’m focusing on building my private healing sessions business which is a Fee based service. Slow but Steady it’s coming along. Any more thoughts on how being in a challenging location can be addressed re: this topic? Thanks Marie! Love=Mandeep

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Nicole Quast

Hi there,
I think it is very important to be confident about oneself and to feel really worthy inside to get the money for your service.
We attract people who match our energy. People can feel, “if they can do it with you or not”. It is all about feeling worthy and confident. And then you have to beam out this energy, that you will not accept anyone, who does not appreciates you.
So how do you do this? I my case help that I looked into my self and ask: What money do I have to get for my service, so that I feel good. I could fully represent this inner knowing. I wrote lists about what the people get for this money.
Business is just a natural flow of give and take that must be balanced. So if there is somebody that doesnt pay – where must you balance yourself out?
Hope that helps,
Nicole
***

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Ketina

It’s amazing how the universe sends me the right information. I am still building up my spirtual counseling and teaching business. I will be working with my first student later on this afternoon. Over the weekend I’ve been putting up lesson plans for my face to face(intraservice) sessions. I’m mostly defintely ask for payment up front. I will give a 10% discount, but right now I’m trying to figure out what to charge. This will be my second product. My first product is up front fee on tarot reading via paypal.
I suggest any woman before getting started on a business is to do your research on everything about business as possible. My research took me about 5 years before I got clarity on my gifts, prices, website, direction, and gudiance. Sometimes we can be too eager and end up not being too wise. Wisdom and self-integrity comes first. You pay yourself first by asking for payment up front. I absolutely love Marie’s advice in this video. She was spot on.

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Eleanor Deacon

Great video! I usually have no problem getting customers to pay. I simply state that I don’t get started on their piece until payment is made. The problem I have is with friends who want to buy my jewelry and don’t respect that this is a business and not a source of free jewelry for them. I’ve often felt awkward asking friends to pay up front – thinking I should cut them some slack since they are friends after all. That’s where the troubles begin because it’s even MORE awkward to have to repeatedly ask them for payment and have them blow you off…especially when you see them buying new clothes coffee or dinner.

I am quite generous with friends but I do need help setting boundaries with them when it comes to business!

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Ketina

Your friends sound like freeloaders, Eleanor. I think it’s time for them to learn their lessons here. Spend less time with them and offer them nothing starting today. You already have been an awesome friend and gave them free jewerly. So its time to show them some tough love and your tough business woman side. You got to do this for you. To me I see your friends robbing you of your money. I know doing this is hard, but you got to pass your lesson as well. You are a great and compassionate person please learn not to be taken advantage of. Good Luck, Eleanor!

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Susan Tantlinger

Repeat after me. “No Credit.” Since I started with that, (a couple of decades ago), no problems. Now IF you are in a situation where money is owed. Phone the client (often) and simply say, “Hello, I’m calling about the money you owe me………………..then SILENCE………….
Trust me on this one, a minute will seem like an eternity to the client. He will start digging a hole, making excuses, but may promise to pay. If you hear the old, “Check is in the mail,” thing, ask, “What number check is that?” Makes them tell another lie, which hopefully, they are now reluctant to do. Don’t get me started……… About 30 years ago in the gift business, several of us got together and combined unpaid invoices. One person went to New York, walked into the evil store, tried on a very expensive necklace (twice wholesale value owed = retail) and slammed the invoices down on the counter, and left. This is not theft. I could write a book on this stuff.

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ashley

I LOVED THIS! I had a job where this was an issue and WISH I had this vid. This is one of those lessons that you carry forever. Thank you for making this vid, it it soooo important. <3 Ashley Anne

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Caco

I learned this lesson the hard way years ago as a business consultant. A very well-known company hired my firm as a contractor, and I needed to front consultant’s pay to *my* partners in advance, then invoice the client. You guessed it, even with a contract my little firm got on the “pay when ever/if ever” list! After many patient attempts to get paid (for GREAT work!!) through their accts payable group, I called my client contact, and shared with her that I’d regretfully need to discontinue serving them (it was a high profile project with deadlines) unless she would help me get paid–her “professional” response: “Do you REALLY think that will help you get paid faster?”…uh, yes! She finally intervened and we got paid.

Lessons learned: Know your business and the leverage you have, be kind but firm, and get paid in advance as often as possible :)

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Dodie Jacobi

Been there too many times but finally realized that if I stuck to my policy I COULDN’T be burned. I’m definitely a “trust till proven otherwise” person (compared to a “distrust till proven otherwise”) but – and this is the only time I’m likely to quote Ronald Reagan (and Marie, it’s very tweetable!) “Trust but verify.”

Thanks for the tip to prepay bookings at the time of scheduling! I’m just now adding Sched Yerself feature to my website, and shopping cart, so perfect timing. And resched/noshows do get annoying when I’ve sometimes booked a whole day around their appointment. I don’t always know how much time a client will need, and historically manage this by charging actual at the end of the appointment. To prepay, I think I’ll have them buy in hour chunks (which gets me an hour min) and suggest that they bring a second or third issue to Spot Treat in case we move through their initial reason for scheduling faster than we expect.

Good luck on this next B-School Registration! I’m spreading the woid.

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Cecilia

Thanks Marie, this is super helpful. I’m looking to move to a prepay model not so much because I’ve been stiffed but because sometimes it takes a little longer to get paid than I would like. I can also tell when I tune in on an energetic level that getting paid first would enable me to give more during the session.

ox
Cecilia

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Cecilia

Wow, I’m having super AHA moments today around everything to do with offerings today. How to get paid, how much I need to charge to enable me to give EVERYTHING I want to without feeling stretched, sweet surprises.

It’s been a long time coming, but I think it’s finally happening… I’m a slow cook bschooler, getting there slowly but surely. ;)

Thanks again for the inspiration today.

ox
Cecilia

p.s. I would totally pay in advance to touch your hair. Wait, that’s creepy, but seriously, I would. ;) Good luck with the bschool launch!

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Sara

Cecelia! I love all of your comments! I too am a slow cook b-schooler but finally am feeling ready and at peace and WORTHY of what I am offering to clients. So many changes to make to my website now where I make NO mention of price at all. OY VEY!

Thanks for the laugh over the hair! Sara :)

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Cecilia

Hi Sara,
I’m SO glad that I’m not alone. I don’t even really have offerings on my site right now but I’m proud to say that I sent something out to my current subscribers on Valentine’s Day to let them know what I have in the works. I decided to give my B-School experience a year to show a return and I’m pretty confident it’s on it’s way.

ox
Cecilia

p.s. Love your site btw. :)

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Rob Anspach

I discovered a long time ago that not conforming to rules and regulations that “had always been” or the “this is just how you do it” set me apart from my competition. The idea that you would create a business only to emulate other’s dumb mistakes is the factor that puts many out of business. It’s your business…it’s your rules! If a client truly wants your product or service then they need to follow your rules. The customer is not always right…they just dont always know what to expect, so explain upfront how you work and eliminate the stress and frustrations of chasing them later.

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Abi Carmen

Marie,

Looking and reading all the comments before me it looks like I may be the only ‘male’, am I allowed into this club? If so, here goes:

It’s been a long time but I owned an Electronics service company in Chicago for over 15 years and in that time was only ‘stiffed’ once. A fellow (who was referred to me) purchased some stuff from me and mailed me a bad check. Since it was over $2500.00 and sent via mail from California, I decided to contact the San Mateo Police who brought the guy in for questioning. He admitted to the bad check and said he would send me a good one.

Long story short, after calling the Police numerous times (as the fellow never made good), they told me that they could not prove he signed the original check even though he came in and made a tacit admission.

Moral of the story I guess is not only collect the money upfront but also make sure the funds are in the account.

Thanks for listening and for all your great episodes.

Best Wishes,
Abi

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Nige

Hey Abi,

Just want to reassure you that you are not the only male on this site. We have Marie’s full permission to hang out here. (pardon the expression).

Keep it real,

Nige

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Abi Carmen

Thank you Nige, glad to see I’m not alone out here.

Best, Abi

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Abi Carmen

Sorry Rob, looks like you snuck in right before me.

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Mary

One thing that solopreneurs and small biz owners overlook is that many of their customers aren’t swimming in cash. Therefore, you, as a business owner, need to make it EASY to pay – accept every possible credit card, offer financing (PayPal’s “Bill Me Later” option is awesome for this, as YOU aren’t the one extending the credit) – online payment options, every avenue you can offer to make it convenient to pay you. None of this “I dont want to take credit cards” because of the fees… it is a cost of doing business that needs to be factored into your pricing.

Also – if you are going to invoice after the service is rendered – at least take a 50% deposit.

Just my 2 cents… ;-) Great topic, Marie!!

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Cecilia

Great point Mary.

Make it easy. Make it easy. Make it easy.

It’s my new mantra. :)

ox
Cecilia

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Sabine Brandt

Agreed! My private clients pay up front for any services purchased so I do not have this dilemma. My corporate clients pay after delivery of service, however, these are usually very large public companies that are committed to paying their bills on time and I have never had an issue.

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Ashlee Thurlow

Thanks so much for this Marie! I was worrying about this exact issue the other day! So far I haven’t experienced it yet, but I was wondering about how I should navigate it because I figured it would probably come up eventually, especially after I take Bschool and really branch out on new offerings. Also, thank you SO much for putting together the Live Your Dream site! I’ve watched all the videos and read every single page! It’s beautiful and I’m 1000xs more excited for Bschool than I already was! Plus I’ve already found some great info from the women’s sites that were featured. :)

~Ashlee

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Linda S

Fabulous info!!! I wanted to say I didn’t have this problem however…..I don’t have this problem because I don’t have any clients!!!!….lol…with that aside, I love the example of what to say to receive payment before service. I will use these ideas for my own coaching biz. I struggled with how do I ask for payment from clients that are in recovery and that I want to help. The bottom line is this is my business and when inquires come in they want to know how much up front. I felt intimidated to give the price right away…and that does not work!!!….Being a coach of any kind your taking an assessment or discovery or intake or whatever you do to first find out what the clients most important issues are and how you can help. That’s usually a free service…from there you can send the client a contract with your services and payment….and get the cost upfront once that contract is signed and sent back. POWWWW….your in business!!
Love your videos loved you on Oprah…you are such a fresh new and shining star in our spiritual walks today…keep it up “gurl”!!
Lin

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Melissa

Hi Marie,

I’m am going through the ringer, I have an investor ready to invest in my buisness. How am I to know its ligit. What contracts, agreements etc. do I need to get the ball rolling? My boyfriend thinks its a scam.:( ugggggggggg Drama.
I want B school to help guide my way into my buisness. I respect your leadership and advice to I can be Drama free.

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Natalie VonRaven

Great advice! I can see how asking for money upfront can be awkward but the ability to deal with awkward situations gracefully in business is what makes you seem so professional. Don’t apologize or devalue your services, people will respect you and your business more for it. =) Whenever I’m in an awkward situation, I take time to cool off before I write my email or script. Then I re-read it form the objective perspective of a public relations specialist. (which I am not, I just don the hat) It’s amazing how much that helps! You can make just about anything sound clear, positive and professional without compromising your policies or integrity.

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Mailynne

As a freelance marketing consultant I learned this lesson early on. After not getting paid or having clients “slow pay” me I adjusted my policy to not getting started until I’ve been paid at least a 50% deposit. However, I’ve also found that sometimes the clients are even slow-paying on the back end with the final payment so I may have to adjust this as well. I’ve also found that doing business with the right type of client helps this issue a lot.

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Gigi

I’m having this same issue. Super quick up-front payments and then slow-paying on the back end. I think we’ll all have to band together and push full payment to the front of the project.

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Jackie Freeman

Great advice Marie. I agree that asking for payment upfront is a good practice in order to ensure you get paid. I also like your suggestion of having customers pay before the service is offered. I’m a psychotherapist, would you recommend having clients pay before this type of service as well?

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Niight

I have had this situation 1 1/2 times. I couldn’t believe that one of them was a yoga teacher in the community. I now make sure people know my prices and state on a form they sign and on their appointment reminder e-mail that payment is due at time of service. Knock on wood no more issues with that.

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Nige

Hey Marie,

As well as being a Personal Trainer I run a DJ business called Kaboom, and after getting burnt a couple of times, I decided to charge up front. (people can act mighty strange when they have had a few drinks) Nowadays, I take a 25% deposit and then the rest of the money seven days before the gig. As a result I feel more confident in myself and the service that I offer. This paid off Last New Years Eve when I played a gig at a local restaurant/pub. Unfortunately the week after the gig they went into administration and none of the staff got paid. Fortunately for me I was paid upfront. Phew.

Keep up the good work.

Love Nige

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Andrea

Great story, Nige. I’ve heard similar stories in the event services business where people have said that their businesses have done better when payment was made before the event. In one case, it was someone (an event planner, maybe?) who had vendors that she had to pay and so getting paid before the event meant that she could pay her suppliers. Everyone wins.

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Caroline Frenette Master Intuitive Coach

HILARIOUS video! And the word play is priceless :)

ABSOLUTELY get paid up front!

But bottom line: this is about honouring YOUR value, your self-worth AND owning your power.

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Gigi

Excellent video! When I first started, I had several terrible situations with clients who took months on end to pay, so I started charging half up-front and half on completion, as well as building an aggressive late fee structure into the contracts my clients sign.

For a while, everything went swimmingly. But lately I’ve had several clients who have started paying late and making excuses. So I think I’m going to start having to charge 100% up front. Thanks for the reminder that that isn’t necessarily abnormal or demanding.

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Nicole

I’m a web developer and I learned from experience that before you accept work from a client look them up in whatever legal records system your city/county/state provides to see if they as an individual or company have a criminal record or a long list of legal actions against them for not paying vendors. Check out their listing on the Better Business Bureau site as well, are they resolving their customer’s complaints or just ignoring them? That’s in indication of how they will treat you too.

On the flip side, I also look up people I hire, whether it’s other vendors or contractors. If lots of people are suing them for incomplete or poorly done work, I won’t hire them.

If someone doesn’t pay and tries to disappear on you, rather than taking a loss you can go to your county magistrate and file paperwork. It cost me about $50, if they pay right way your are done. If not, you can go back, file more paperwork and the case goes to court. At this point the person your suing would be responsible for covering everything they owed, in addition to your paperwork and court fees, if you win. If they don’t show up to their court date, you automatically win and can send an officer after them to collect the money or you can put a lien on their property.

Going to court should be your last resort, but don’t hesitate to do it if you are owed a substantial amount.

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Shnirley Farrington

Here is what I have tired and it works some times. I charge them an application/processing fee of $65.00 to get pre-screened that shows they are ready, willing, and able. Then I can work with them because I will then get paid a leasing fee from the owner which is very small. But I tell them that my minmum is $500 and if the owner pays under that then they agree to pay me the difference. When they agree I go to work for them, hunting for properties, checking availability, setting up showing times, consulting with them over the phone on what areas are better than others and why. Giving them my professional opion and advice since they are a client of mine.
Then what happens most of the time, they still search on their own or have their mother looking for them. Then all of a sudden this one gal relocating said to me that she wanted me to show her mother the houses. I did. Then the next thing, while I was working on a for rent by owner, to get permission to show this house…that my client asked me to find out about for her, well she told her mother about it also. You guessed it, her mother called the owners directly and went to see it and put down a deposit on the spot for her daughter. Well that cut me out of it all becasue she didn’t wait for me to show it to her.
I still needed to get paid but the client didn’t want to pay me anything. She admited that her morther should not have gone behind my back, but her mother was only trying to help her get a house. …..and her mother is a mortgage broker who works with real estate agents all the time….So I told my client to decide how much she thought the work I did for her was worth to her! She agreed to pay me $300.00. And she did. I knew she was a professional with a high income and is use to hiring people to work for her. But most will not even agree to pay the $65.00. In those cases, I just tell them that I can’t help them.
Would love your wisdom!

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Shnirley Farrington

P.S. I forgot to put in what I do. I am a Rental Home Locator and I am a licensed real estate agent. I specialize in Rental Relocation!

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Claire

Thank you for your video today.

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Vanessa Uybarreta

Get paid first!!

We all have issues that we are letting go of, and business ownership definitely gives us the chance to do just that! I understand money issues, and all I can say is that when you decide on what is non-negotiable for you, you really do feel empowered.

I now work with my ideal clients. They are wonderful people that I feel great fulfillment working with. They honor all my policies and I also work from an authentic place. I have had experience with dead beat clients, as well as ones that want to nickle and dime me. Doesn’t happen anymore.

It took some letting go of old belief systems and honoring what I really desired to attract them. It is so worth the journey…so overall, IT DOES GET BETTER!!! You’re in your right place at your right time!! You can do it! Get paid first!!!

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Stephanie Cockerl

Thank you so much for this. Very timely.

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Amethyst Mahoney

Love the video, and the tips! I have been charging up front for some time, but I recently ran into trouble with a client who can no longer pay. We’re going to have a conversation about how this is the same old sh*t that stops her every time her business starts to get going. All of a sudden, she’ll find a way to self-sabotage and make excuses, and her dreams come to a screeching halt – again.

Sometimes it’s more about helping them dig deep and figure out that not paying is a sign of their ongoing blocks that hold them back in multiple areas of their lives.

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Shirley

Thats a really great point about their ongoing blocks!

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Jackie

I am a Custom Design and Sewing/Tailoring business. Every thing from the Design, to the pattern and sample. Or just good ole tailoring a rtw garment off the rack.
Ok, some people are into kinky stuff, right? Well it is hard to find some things, for the fantasy folks so they come to me and I make it specially for them.
So the ONLY time someone tried to stiff me was when this dude wanted a French Maid costume (his girlfriend whom he desperately wanted to get back together with, said this was the only way he could prove his love). So this was definitely one of the MOST crazy things I have done. She even gave him some pretty detailed notes about how this was going to go down. Head to toe (yes Pumps) and undergarments (yep, Girdle) he was fitted and looked just like a (Large) french maid, ready to serve his lover and her gal pals dinner. Long story short.
Really! But he grew a set, and called it off at the last minute, while I held the bag of not so cute frenchy. He simply told me he didn’t want it any more. I simply said, “well we will have to see what the judge says about that”.
He came and paid me in cash within 2 hours. Use your imagination, and hey, its even funnier than that!

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Karla T.

Thankfully, I have an online store and people must pay for EVERYTHING up front before I ship anything to them.

The cat bobbin’ his head to WU-TANG…*dead

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Michelle Reynolds

Oh, baybee! I have a lot to share on this topic. Thank you Marie, for broaching this important business issue that we all face at one time or another. My experience comes from eighteen years of working in the family business, a traditional advertising agency in Texas. Mom was the President. I was the CFO. My brother was the graphic designer. And another brother was the media buyer. Oh, the joys of working with family! NOT. Anyway, back in the glory days of landing multi-million dollars media accounts there were times when clients would fall behind on paying for radio, TV, print and outdoor media buys. We had an iron clad contract in place and were covered but the collection process is stressful and time-consuming. And it took time away from working on new business. There were several times that we sent accounts to collection after we exhausted all efforts. As CFO, I had no problem smacking the hammer down. After 90 days in arrears the collection letters start going out. We’re not talking chump change here either. Several times it was over $100K. Clients paid up in the end on big media bills but often times they would pay the media first and not for design services which are retained by the agency. The audacity! However, even to this day there have clients who have not paid for services in full by leaving a $1-3K balance. Now days, everything is 50% in advance, balance upon delivery. No credit whatsoever. All media is 100% cash advance. It works great expect for when the President breaks policy. Like I said, the joys of working with family. It was the best and worst of times. All kidding aside, I wouldn’t trade those years for anything.

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Lydia H

Great video Marie! There is certainly nothing wrong with asking for money upfront before you offer a service. I taught an in-home, drop in style dance class for a few months. Most of my students paid each class, however, a few were having money issues, so I let them pay every other week. Others would let the two weeks pass and then admit they couldn’t pay, while some asked if they could pay in kind instead of cash. Luckily, that venture was only a side deal and I wasn’t relying on the income from it. However, I learned that when I go into teaching again (this time more seriously) that I will develop an established list of rates, policies, and expectations to avoid future headaches.

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Cathy

Hi Marie,
Wow and wow!! Love your site, your videos and your whole theme. This topic really struck a chord with me as this problem happens so often in family law. People have “eyes bigger than their stomach”, lol, and do not realize how expensive litigation is. I’m now in the process of slowly converting to flat fees paid up front.

Keep up the good work :)

Cathy

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Kate

Thanks for this Marie – it was exactly what I needed today! We have one client in particular who just drags their feet on paying us. Their bookkeeper says it’s their “payment policy” – but hey, what about our billing policy?!?! So this inspired me to write a formal billing policy (it was just a paragraph in our invoices before) and reach out to a few clients who needed a nudge, and put my foot down. I’m glad I did – whether I receive a payment or lose a client is ok with me, because having a client who doesn’t pay is the same as not having one at all. Thanks again!

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shinazy

In my Career and Linkedin Tutoring business I conduct sessions over the phone. Since most of my clients never meet me in person they may feel uncomfortable giving me their credit card information.

Therefore I bill via PayPal. I tell my clients this provides them two levels of security: their credit card company and PayPal.

Should they have an issue with the service I provided they could challenge the fee via their Credit Card Company and / or PayPal.

Now my clients are protected and I get paid PRIOR to any tutoring session.

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Robbii Albright

So very good ( the video – that is )! I’m dealing with 2 ( at the same freakin’ time ) NON-PAYING clients. I stayed on one clients as$ – was very persistent and polite and made several phone calls, and sent several emails, and eventually ( after 3 plus months of this ) got a partial payment ( 75% ) The other client, simply hasn’t paid a thing….and I have held onto “the work” ( website ) until I receive a partial or full payment. All this said, the following client was required to pay half up front, and sign a contract with the services tb rendered and payment schedule listed. This has worked well, although we have gone over our budgetted time / money.

From your video, the thing that resonated with me, was the tweetable.
This thought (philosophy / simple fact) – is something that I have heard in the past from one of my former employers. He said essentially, take yourself more seriously, and other will as well.
I feel that I could “up my game” – in so many ways ( actually making my website to promote my design / web services; still haven’t made )
And I wanted to add:
On a spiritual level, if others aren’t paying you, MAKE sure you pay others! ( even if you have to squeeze a bit ) – I think this helps one to maintain a positive and upright attitude about this whole exchange thing called life and commerce.

:) all right…I’m done….. thanks for sharing so much, Marie. I love your show. So cool and fun and awesome and…on and on. Have a great week (day)!!!!

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Donna Marie Johnson

This is a very important topic, and I love your comedic video answers, too. It makes the medicine of reality check go down so much smoother.

I was trained in business by excellent business men. So, I know how to structure my biz to prevent this problem, BUT there was a time when I was being stupid and going against my own built-in policies.

After I started abiding by my own books, I became happier with my business and with my clients.

Thanks Marie!

~Donna Marie Johnson,
Your Social Networking Liaison

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Julie Geigle

Such a touchy subject – thanks for taking the bull by the horns and giving no nonsense advice. I an an international psychic medium and had to learn the hard way because I am so trusting.

I’ve recently implemented an auto pay program because people would sign up for my programs and quit mid way through even though I had a specific policy and even made them sign a contract. Now I don’t work with anyone unless the service is paid for when it is scheduled. Also eliminates cancelling and/or rescheduling appointments.

This is actually a nice bonus because we don’t have to hassle with money during the appointment which can be uncomfortable and time consuming.

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Patricia

Marie,
Always love hearing your tips.
Giving us the exact words to use is a great help.
We all need to remember, that we do deserve to get paid.

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Dotti

I completely agree with Marie that you need to be paid upfront. I’ve had both a successful photography business and a successful officiant business and always required payment at the point at which clients wanted to secure my services. It’s actually a very good way to qualify your clients, and recognize that you might not get every job…and that’s OK. Spend your time servicing the people who pay you and stop wasting time chasing the deadbeats. It’s important to tell your future clients that you expect payment up front with confidence, and in a voice that says “well, of course you pay first.” When some people would ask “How do I know I can trust you?” I’d answer “My reputation precedes me, but the choice is yours.” Don’t let them put you on the defensive and don’t beg for business…good luck!

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Evelyn

Marie, what a great site! Love it!
Anytime I have had issues with clients, it was usually when money wasn’t clear cut or terms were allowed (by me) to be bent. No longer though, I’ve learnt how to keep referring back to my clearly outlined and public pricing structure for full transparency.
I’ve been coaching independently for nearly 5 years now and it’s all about setting those boundaries.
Having my pricing clearly stated on my site is much easier, so potential clients can qualify themselves before they ever contact me. Plus, I offer 3 or 6 session packages, I found ‘pay as you go’ situations were painful for everyone. Also, who really achieves much in less than 3 sessions anyway, so you’re doing the client a favour.
The one thing I have noticed is when I have given people a discount or haven’t enforced my terms, the client almost expects more?? That always puzzled me.
I like keeping things clear cut so that everyone knows where they stand and it frees us up to really get down to work and achieve great results.

Thanks for affirming this for me.
I’ll be checking in regularly x

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Kate

I think they expect more because when they “pushed” the first time, you gave in. Give an inch and they expect a mile.

At least, that’s been our experience too.

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Franka Baly

This is a topic that really resonates with me Marie. I owned a graphic design studio for 11 years. I would pour my heart into projects for my clients, staying up late if necessary, sometimes getting very little sleep. I remember clients being so happy with their project and telling me that they loved it. Then what I remember is having to chase them down and even send threatening letters to get them to pay me, which I hated. I literally had anxiety over it because it affected my cash flow and my ability to pay my bills. Why do I have to chase you down when you are happy with the provided service? When I first started out I was naive and I would release the collateral to them at the end of the project, thinking that people are fair-minded and I would have no problem getting paid for a service I rendered, WRONG! But later after being burned I started requesting the final payment before any collateral was released to them. Surprisingly I never had anyone complain about this especially since it was in my project agreement. They knew up front that this was how I conducted business. As a small business owner I wasn’t in a position to just leave money out there that I needed to sustain my business. I did let my clients see their project online and even provided samples, if it was indicated in their contract, but to get the final files I had to be paid first. No exceptions, even for friends and family. Money can derail even the best relationships so be sure to have a clear process about how you handle getting paid in your business. This is one lesson I learned well!

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Mary Frances B

After getting taken twice (chang-ching), I got smart. I have various ways clients purchase my services and found that all types of payment processes are not alike so I had to come up with a system for each.

First I have the one-on-one, one-time consulting fee. I am very clear via our communication what my rate is, how they need to prepare for when we meet and that the payment (and that I only accept check or cash in that situation) is due upon the closing of the meeting. Both parties know I’m not leaving until payment is in my hand. Note that my hourly rate here is my highest rate.

For project-based clients (short term) I provide a detailed proposal that states very clearly that 50% is due up front and 50% upon completion (not 10, 15 or 30 days later). I restate this during our initial meeting. I usually get payment in the mail within 10 days. I charge a middle of the road rate here.

For retainer accounts ( 35+ minimum hours a month with a minimum of 6 months commitment) the payment is due PRIOR to the month I start working (much like an accountant because they are paying for “retaining my servies” for a certain amount that month). Any overage at the end of the month gets charged and is due immediately (and is a higher rate than the retainer rate). My retainer rate is my lowest rate. They get that benefit while I’m guaranteed their work for 6 months.

In all scenarios it’s a win-win for each party and the client can choose based on their current needs and circumstances. The other aspect is I’m very upfront myself about talking about costs. I know I’m worth it; I know I’m fair, so I make the ground rules very clear.

However, note there will always be circumstances but if you’re upfront, have good proposals/contracts (it’s worth a lawyer looking at them) and be authentic in getting paid, those should be minimal!!

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Robin

Hi Marie,

I think the advice you gave is excellent, but I must take exception to one point of your assessment. It has to do with blame and victimhood. At the time this woman wrote to you, she had just been victimized. She does not however need to continue to play the role of victim. Recently, women in particular have come to realize the part they played in the unpleasant conditions of their lives and have thereby taken back their power — that’s a really, really good thing! But to say we have no one to blame but ourselves only internalizes the anger we naturally feel and causes it to embed further into our psyches.

Regardless of how she appeared (on her website… or walking down the street) it wasn’t fine for the person to whom she provided service in good faith to evade the agreed upon recompense. Changing her appearance may be a good move, but in this context, it is still an accommodation of prevailing views that wrongly devalue her worth. Women are commonly devaluated and victimized, but men can also be victimized and may also need ways to understand what happened and identify strategies to protect themselves in the future.

I am a real estate sales person and commission is almost always paid upon completion of the transaction. I have addressed the problem of non-payment by adding an early termination fee to the listing agreement. That way, if the property does not sell due to the seller’s action I am still paid for my time and expenses.

Thanks for bringing this to the table Marie, you rock!

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Judy

My husband had this problem as an accountant. The client was his parents’ friend! He learned very quickly to take a retainer fee. He has not had this issue since.

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mrl

thnx for the video!! very helpful!!! Can’t wait for the next one!!! :)

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Stephenie Zamora

YES, such an important topic. I’ve completely revamped my policies and project process for website design based on clients who’ve refused to pay, gone MIA mid project or are just difficult to deal with. When prospective clients try to work around my policies, I stand firm. This is how I do business and it’s what works for me. You’ll be glad to lose some prospects, because those are the ones that would end up being a pain in the butt, flaking out, going MIA or ignoring your invoice!

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Trinidad Pena

I agree. I ask for payment up front or at least a deposit and then I take monthly payments. It’s a really good business practice..

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Jen Kunkel

Great video! The simple solution to avoid collection drama is definitely to get paid up front, no matter what business you’re in. When I worked for my parent’s company several years ago, that was one of the first policies I changed for them. They sometimes had difficulty getting paid after installing equipment at the customer’s site, in which case they could lose money by doing the job because they were out the cost of equipment and labor. I suggested they get 50% up front and the remainder upon installation/completion. My parent’s resisted the idea at first, thinking the customers wouldn’t pay. I asked them to let me try it & none of the customers (even existing ones) blinked twice when I asked for money up front. Works like a charm!

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Jane

Oh boy do I hear you with this Q&A!

I had a shop many years ago and when I closed it down I was left with £000′s of stock. A woman that I knew, had been on a course with and who was a shop owner in the same business as me asked to buy my shelving and some remaining shop fittings. We agreed that she would pay me only £1000 for the shelving etc and ALL my remaining stock.

She gave me a couple of hundred pounds and I let her take all the stock with her, she told me should would collect the shelving later. Later never came, and nor did the rest of the money. I called her several times and she got very rude and aggressive. In the end I just said ‘what goes around comes around’ and let it go. For years afterwards I was still beating myself up for being so gullible but I know that I learnt a very valuable lesson.

My business is not up and running yet, but when it is I will be asking for payment in advance as per the top tips in this video!

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Jane

yeay, have now sorted out my Gravatar so that my link appears in posts :) Happy days.

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Cathy

hahaha…your timing is impecable!!! loved the episode on getting stiffed by your clients!!

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Karin Pinter

This is great, thanks! Training old-standing clients to pay up front has been a bit of a challenge – it’s so much easier with the new ones though! This really helps sort the “good apples” from the questionable ones.

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Carole

A little over 3 years ago I attended a huge seminar by a now famous motivator. He held a special meeting for those who would like to have their first book published by his own publishing company, and promised it would be guided by a former book agent for a big publisher. (This was before the huge eBook & Print on Demand rush) The motivator who seemed squeaky honest said we all had 3 years to get the details done. I signed up to the tune of $15000, and my husband & I flew out to have a meeting with him. All was well, I did everything he described to the letter, but because of some family matters, it took me over 2 years to get my manuscript ready. He had not been corresponding with me regularly, and I didn’t want to approach him until I was finished with the manuscript…my mistake. He was still doing huge seminars with top people, and even developing a membership to promote integrity in the internet marketing industry. You know where I’m going…when I tried to submit my manuscript after 2and1/2 years, he said his assistant had tried and tried to contact me, and I didn’t comply. He said his program had expired after 1 year. I had lots of evidence to the contrary, but nothing legal…I had trusted his words.
Lessons Learned: Don’t think a huge name is always honest. I made 3 credit card payments, so I couldn’t cancel a one time payment, when they didn’t provide a contract. You must make sure you have it all in writing. Don’t assume that because this guy’s program was all over the internet, that he couldn’t make that information disappear…he did. His whole demeanor changed when I tried to contact him. You probably know his name and his academy. My biggest lesson was I suspended my good judgment because I wanted to believe he wanted to help me. This didn’t make me cynical, and the good lesson was I’m a better businesswoman! Listen to your gut no matter how good someone looks or how much others seem to respect them!

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M

$15,000??? holy cow! that’s terrible!

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Beth

I couldn’t agree more, Marie. Your look of professionalism makes a huge difference! I run a tutoring company. I maintain a small, homey, but neat private office for this service. It is not out of my home. That, I think, automatically makes it seem more professional. In addition, I offer a free consult to see if the client and I are a good fit and what services they are looking for. This has almost always turned into an actual paying client. I state my fees up front, I tell them what they get for that, and I have never had a client try and dicker me down. Not even the client who “dropped out” for a few months and then came back to an increased rate tried to dicker me down. I think this is because I come across as firm in my prices, can talk about what other tutors, with similar credentials are charging, and I come across as seeking the customer’s best interest.

I used to charge clients when they arrived on a per hour basis and I had a lot of problems with no shows, not so much non payment. It didn’t take me two clients like that to charge up front for two weeks worth of sessions. I present this as “reserving their time” and everyone I work with has been totally fine with this. In addition, I provide a service agreement that discusses my policies about failure to call and cancel in advance (results in forfeiture of time and the fee) when payment is due, how to change a scheduled appointment and other things. I also discuss how they will be compensated if I am unable to meet an appointment. Finally, to encourage people to pay by month, I offer a discount for that.

By defining my worth to the people I work with in my knowledge, my dress, my bearing and by knowing who else is working, at my level, in the area, as well as by having my procedures clearly defined in writing, I nip a lot of problems in the bud.

I do this because I know I’m worth it.

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Sasha

I just want to say I love Wendy’s cat consulting business. I think it’s genius!

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Yolande Rogers

Hi Marie,
This is a question regarding B-School. I have been watching your videos for the past year and would like to take the plunge and join your training programme. However, I need clarity on an actual idea for business. I have a couple of ideas floating around but nothing concrete. Working the usual 9-5 is not for me and I want to do something bigger, creative and fulfilling. What I need to know is can anyone join B-School at any time ar is it for a set period?
I would be grateful for some info on this as I really admire what you have achieved and feel you would be of great help.
Thanks for all the great videos and isights thus far!

Yolande Rogers

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Kris

Changing to a pay-in-advance model was easier than I thought. People don’t bat an eyelid that they have to pay up front.

As I can be working with people over a long-ish period of time, I use a 50% in advance and 50% on delivery deal for clients with larger editing projects. They can be more comfortable this, especially as it takes a while to build the relationship between editor and writer.

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Logan

I got stiffed about $1500 by a client last year. But because they are also personal friends I chose the relationship over the money. But it’s still an issue for me since they could have done one or two more jobs before they closed their business to make sure I got paid. The fact that they devalued what I contributed is what really stung plus the fact that their regular employees all got a final check but for whatever reason they felt okay leaving me in the dust. I even recommended we work on a payment plan because that’s what I would do in their place. But no go.

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Irina

YES, always charge upfront! I have learned to stop doing commission work altogether, and even avoid retailers that pay in 30 days- it has never been less than 60 days later that i get paid, and it is no fun to ask- where is my check?

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Bianca Te Rito

Hi Marie and community

Wow! What a fantastic space the advice / suggestions!! Loved your points Marie on “perception” and the tweetable “We teach others how we wish to be treated” (one of my own personal values – that I also use in my business dealings).

With my consulting business I bill full payment upfront before any work is commenced. I don’t offer discounts and I don’t negotiate on price. I am fortunate to be in a position where I can be selective about who I work with. This took time, but it started with having a very clear vision of my ideal client. Often I have turned eager prospects away because I sensed that there wasn’t a “fit” in terms of values, content etc. From my experience, having a clear vision / filter of “who” I want to work with has saved me from any non-payment issues. If I sense “something” during our initial interactions I will politely decline or refer them on.

Also, I educate my prospect on what it is that I expect from them and what they can expect from me. “I teach them how I wish to be treated.” My point in support of Marie – billing upfront is totally do-able as a standard business practice and it has worked for me – I would not run my business any other way.

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Jan Haley-Soule

I absolutely love this video and advice. I think all businesses will have their various differences but bottom line we want to be paid for services we provided. I am an actress and voice over artist. Mostly my agents negotiate and secure payment, however I also use voice over databases that allow the voice artist to set their own terms. Those are the ones that I have problems with. 50% of the clients pay upon receipt of the recorded tracks, and possibly ask for revisions (which is included in the fee,) but some clients say that they have to get client approval first. Then they either forget to pay me, say they are still waiting for client approval, or never pay. Because I am fully versed in the industry I do truly believe that they are operating on limited cash, and that the producer is wearing many hats and could possibly put bookkeeping on a back burner, but at the end of the day I have to remind myself that I too wear many hats, and I too am working with cash flow issues, and I am not running a charity.
The databases bring in a good amount of money but I find myself spending a lot of time and energy on the few clients who don’t pay or who are extremely slow to pay. I am still not quite sure how I can deal with this. I don’t think I have ever heard of an actress or voice over artist being paid before they show up to set or a recording studio. Any suggestions Marie?
In addition to your videos being so helpful business wise, they always brighten my day with your incredible humor!!!

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Lidija

Yes Marie….“We teach people how to treat us”… Life is a miror… When we have a clear vision we get what we want… And we have to be confident in our decision…. Thanks for all your videos…

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Renee Lowe

This is a MAJOR problem for entrepreneurs. Especially, when clients are on a monthly retainer. I send them to a small business collections company and let them do the dirty work. They take a percentage of the fee owed to my company, but it lets the client know that I am serious about my business and that it WILL affect their credit report. After one or two calls from the debt collector, I usually receive payment. Only one incident is still pending payment out of 4 occasions this happened to me.

As far as the short-term services my company provides, I always do 50% down and final 50% payment for delivery of proposals, files, logos…etc…I never send them a file when we are going back and forth on changes, I do an electronic sharing of my screen, so they can look along with me. If it is logos or a website, I have HUGE watermarks on everything, rendering the items useless, if they decide they want to skip out on the final payment.

You just have to toughen up and let folks know you don’t play games. In the end, they will have to respect you for it.

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Darnell Jackson

The best way to avoid getting stiffed is to get really nice simple contracts that you have your clients sign so when they don’t pay you simply hand over to your attorney who sues them and obtains a default judgement.

Or you can move on and find 3 more clients?

I’ve always chosen to move on.

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patricia

How do I handle people wanting to have my artwork services for free?
This is what they say “It will bring a lot of traffic” to you. “It will drive people to your work” – Free to be in an upscale publication seems all good and well but should I do that for “free?”
pve

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Logan

Unless they can prove, with real data, how much traffic they will drive to your site and also whether or not it’s quality traffic (people that would actually want to purchase your art) then I wouldn’t take their word for it.

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M

They are looking for stooge. Don’t play their game. I do not think it will be worth it to you.

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Saida

Love this Video Marie!!!

I have learned to say no to ‘trades’ or ‘bargain hunter’s. I found that trades were always something I didn’t want or need and that the bargain hunter’s never actually paid their full discounted rate and I found it unfair to those who were willing to show up and pay full price.

I also recognized that when people put money up front, they truly pay attention and show up, so by making sure to provide this ‘up-front’ payment I am setting up my clients for greater success.

Love all the juicy comments on this video too! :)

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Kate

Ha! Love your work Marie. Truly inspirational. One word in your ear though. You know that when one is dealing with a truly international clientele, attention must be paid to the different cultural customs and etiquette – well, it is important to be mindful of one’s choice of language and phrasing too when our words are travelling globally! Have you ever been stiffed? Hmm, made me laugh out loud – shall we just say, it’s not your best subject line. It can mean other things! Clue: adj. Not easily bent; not flexible or pliant; not limber or flaccid; rigid; firm. ;-)

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Marie Forleo

OMG Kate this is the BEST mistake I’ve ever made!!!! Thank you so very much for letting me know. Hopefully, that subject line made for some laughs around the world :)

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Linda B

I’m a jewelry designer and while I don’t have problems with payment upfront, I did have to set deadlines on returning items and refunds.

My stumbling block is people who want to purchase 1-2 items at a wholesale discount. And, these are items that take me around an hour to produce … what do I do?

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Logan

Linda, I would increase your wholesale piece count. For example 6 items triggers a wholesale discount (or whatever high number you come up with). Otherwise you’re always selling at wholesale prices but not benefiting on a volume sale. Wholesale pricing is for volume orders..so if I make 20 bars of soap and a shop wants to stock my product I’ll give them a break on 20 bars, but not 1-2, that’s a retail amount..same as if a stranger off the street walked into a shop and only bought two items.

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The Get In Shape Girl

Thank you for putting Wu-Tang into your video!!!

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Gates

What I usually say is this

“No bank would survive making short-term loans at zero percent interest, and neither will I. Please pay me. Thank you.”

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Exploring Souls with Nahanni Faith

Great topic, Marie! I had to laugh when you said the part about stores expecting payment upfront – that is what I always say to friends who are feeling guilty about charging for their services! You can’t go into the grocery store and expect to walk out with groceries unless you pay for them (and the store certainly doesn’t feel guilty about charging you for them).

Anyway, I have not encountered this problem in my own business because I do require payment at the time of booking a reading with me. Last year I also implemented a scholarship program, to provide an opportunity for people who would benefit from working with me but who would truly have a very difficult time paying for it. There is an application process with a limited number of spaces each month and I do require some type of energy exchange (this can be bartering, installment payments, volunteering in their own community, etc). This has been one of the best things I’ve ever implemented in my business – the scholarship clients I’ve worked with have been fantastic, and have all taken it seriously and benefited from the work. Also, since implementing it I haven’t had a single complaint about my rates!

Thanks Marie!

-Nahanni

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Lis

Ahh such a touchy topic indeed! Some fantastic comments here from everybody! I ask for an amount up front (and this is outlined on my website in the ‘steps for how we’ll work together’) for branding & design services & the final payment before anything goes live.

For consulting and idea generation sessions, the session is booked with payment in full and then we schedule the session just as Marie suggested. That’s definitely stress free, smooth and pleasurable business and we both have a heap of fun!

I love the idea someone up the top had about a discount for full payment up front. This is a great idea for some larger projects! Thank you!

I’m with a number of the ladies that struggle with people discounting their services. I’ve just had a look and find myself regularly throwing in things that are definitely not part of the standard package for free.

You wonderful women are right, if somebody respects you and your business, and values you, they will pay you correctly and not try and ‘bargain you down’. We have to set some boundaries!

Anyone else have trouble doing this via social media and email? For example I get asked a lot of questions via email that are actually part of what I charge for. I’ve started answering with a few ideas and then suggesting a package but I’ve often found these specific people are just looking for free help. And I truly, truly want to help every single person for free but I can’t sustain a life or business that way and it detracts from the people who are paying.

If it’s a quick question, or something I can answer quickly that benefits all I certainly will but anything complex or really specific I suggest a package. That’s also part of what the blog is for…answering these general questions to help everyone. I’ve been thinking about doing a bit of a Q&A series…time for that!

Thank you for this great conversation that resonates with so many of us!

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Katerina Svobodova

Maria!

Yes, Yes, Yes so thru and important that we need to lear how to have respect by people we give our services time and energy! I did struggled as well few years a go asking for money for stuff I give away, as I really did love to give all I could for free lol. I loved too, but we really need to think more business tho. It is more fun as you lear so much more about yourself your power and your honesty. Very funny video Maria and very well sad, really very well done! I am sure the Lady will bring it on !!! We need to treat others like we love others treat us IN THE GOOD WAY NATURALLY. Love you all ladies and looking forward to hear more about B-SCHOOL tomorrow !!!! Have ya all great evening <3 Katerina

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Blythe

A freelance copywriter, I know how hard it can be to get paid in a timely fashion. I once had an agency let me know upfront that they don’t pay their freelancers for 60 days after the job is completed, and because I needed the money I said yes. This is not something I would do again as the project took over a month to complete and then 2 more to get paid. If this was my only source of income at the time, I would have been in big trouble. I would definitely re-think working for this client ever again. I also had a PR client ask me to write TV scripts for them and then claim not to use a single word, when they never asked for revisions. I should have known better, as they have a terrible reputation in the industry and are known for doing this, which I didn’t know at the time. When I finally met with them, after having them cancel on me at the last minute several times, they kept me waiting for 30 minutes. My gut told me to leave and tell them that if they didn’t respect my time, I could not work for them. I should have listened to my gut. After meeting with them and having them give me “cliche” concepts for the scripts, I had the weekend to write them. Normally, I would have charged a rush fee, but they claimed they had a tight budget. Then when it came time to pay me, they refused, until I insisted and then only received half of what they really owed me. I consider taking them to small claims court, but when I did some investigating, I found out just how bad their reputation was and how often they had screwed people, so I decided just to drop it. I did send them an email expressing my dissatisfaction with their lack of professionalism.

If was a hard lesson to learn, but now I review polices with clients before I consider working with them so that this never happens again.

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Michael

Learning to follow your feeling or “gut” is a great great lesson. I’m happy you learned and your business is still out there with these experiences.

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Damayanthi

Hi Marie,
I used to distribute health & nutrition products. Once I get the products they come to collect them & tell me a big story to delay the payment.
I feel sorry for them & just accept the story telling them its ok they can pay later. Which ofcourse never happens.
I learned my lesson the hard way. No payment – no product.
If I feel that their story is genuine them I give accepting the fact that I may not receive the payment. (I think I gave awya to charity)

I am not with this business anymore, but it was a good learning curve.

Damayanthi

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Michael

Hi Marie, thank you again for the video.
My biggest lesson was when I was hired through LinkedIn as a Sharepoint consultant for a government project through a IT company. Ok sounded great, checked the meeting location and it was blurred out (Google Maps) cool! (I was young ;) still am :) ) Went to the meeting, got a security check, went into the government office. 2nd meeting: different location with lunch and everything. In the meantime I still did not get a signed contract back, but I thought ahhh that will be ok, let’s continue consulting. E-mail to the project manager: Hey could you sign the contract -> no reply. Long story short: suddenly no more communciation, e-mail adresses were shut down, telephone numbers did not excist anymore –> ghost company. Reminded me of the movie The Game with Michael Douglas :) I invoiced several thousands euros and lost time. Luckily the only losses and a big lesson learned. Now I am working on another consulting project and I did not typed a letter before I got the signed contract back.

I would also like to say that there is NOTHING wrong with paying upfront. If the potential customer refuses and there is no trust, is there a good connection then? I always try to follow my heart but keep in mind that we are still living in a 3d world. For B2B wholesaling we ask to pay upfront, no problem at all even in some countries where they are not used to this. We save a lot of money and costs because of this. For my logo/animation/website etc. design I ask a % upfront to cover my costs, this way I’m always sure I will not lose money, maybe only time. The same counts for a hardware project I just finished –> 50% upfront to cover costs and even make revenue before I started. For the customer this was no problem at all. Too start a project this open, with trust and transperant is really really nice. It tells a lot about the customer.

Bottom line: protect yourself (before you.. ;) ) it’s better to miss a project then to lose money. Money is not an obsession but a tool to grow, learn and pay your bills.

Warm Regards,

Michael

ps. I loved the humor in this video :D

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Rowena List

I always get a deposit up front. Once in awhile I have a person who does not agree with that policy. They are not the client for me.
Once I was working with the lady of the household. We were downsizing her and getting her ready to move out on her own. Away from her creepy cat eyed husband. Then she asked me to help him on move day.
I did.
My mistake. I did not get an agreement with him on payment.
He refused to pay. She did not want to pay from his time with me either. 1700.00 out of pocket and bullied by him like you can not believe.Even threatened. Wish I had taken him to court now that I look back on it.
He is a high profile colon Dr in town and was a real asshole….pardon the pun but Marie you did it all the way with the cat jokes.
Lesson learned purrfectly!!

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Elly Klein

In Wendy’s case, I agree with Marie that she should get paid upfront – or perhaps half upfront and half on completion (ie. she doesn’t complete the service until the second half is paid).

But there are some industries where this is simply not possible. You wouldn’t get any work if you asked to be paid upfront. Such was the case when I was a freelance copywriter. You simply have to concede that chasing invoices and playing a bit of a cat and mouse game with clients is part of your job. Most will pay. Some might require some extra prodding or even a face-to-face meeting to sort out payments. And some will need to be ‘fired’ if they’re just too painful. (Also, some will go out of business before they pay you, so you’ll never, ever, see your money.)

The more confident and professional you can come across, the better, as they’ll take you more seriously. But it’s very delicate, because you need to act as though you’re ‘cool’ with not being paid in a timely fashion – otherwise, they’ll replace you. There’s a protocol that took me years to learn. It’s normal to send one or two ‘friendly reminder’ emails and then call if those are ignored. Almost all my clients would pay after an email or two.

After many years, I got really tired of it and wanted to have the kind of business that required people to pay upfront, so that I never had to chase an invoice again. I’m a lot happier now!

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Julia

I felt like you were reading my mind this morning, Marie!

I’ve recently been stiffed out of at least $20,000 by a client I was working for full time. I managed a huge book launch for her last fall and was induced to give up my life and work extraordinary overtime hours for a full two months because she made multiple promises of profit sharing.

When the launch was over, she refused to share the numbers with me and simply said “sorry, there’s no profit.” When I asked to see the numbers to confirm this for myself and requested that we work out a mutually acceptable deal for the overtime hours I worked, not only did she fire me, but denied ever promising to share the launch profits with me. She also denies owing me anything for the overtime I worked. She continues to claim this even after being contacted by my lawyer.

The experience has taught me a huge lesson. I’ve been far too naive and trusting. Not everyone operates from a place of integrity, despite what they proclaim to the outside world. From now on, I won’t be working without airtight legal agreements. It’s disappointing, but it’s also made me committed to getting really clear on what kind of people I want to work with. I’m also committed to making integrity a central focus of my own business teachings. Integrity and reputation shouldn’t just be given lip service. They are as important as any marketing or business building strategies.

Thanks for bringing up this topic!

Julia

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Shirley

You know, I’m sure that Dr Phil has a new book out called the New Code, something like that. Well I think it is time for us to have to new code to live by and to run our business.

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Carlyle Coash

Thank you for the video and the answer – as always it is poignant and funny. I will send along to my wife who struggles with this at times. I do have a question – is the B-School solely for women. I am interested but the messaging seems to suggest it is focused on supporting women in business. I do look fetching in a wig, but want to respect the work you are doing. Thanks so much! I deeply appreciate the style and joy you bring to a world that needs as much as possible.

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Marie Forleo

Hey Carlyle – B-School is NOT just for women and we have a growing and amazing male audience (no wigs required :) – if you have more q’s please write bschool@marieforleo.com

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Barbara

I LOVE that Dr. Phil tweetable! It’s so true. If we give our clients permission to walk all over us, they will. In my experience, commanding respect (on our websites, in our client relations, and so forth) tends to attract clients who WANT to be honest and respectful…and sends bad apples running in the opposite direction ;).

I’m in the 50/50 payment camp. I always require 50% up-front, because it’s the best of both worlds: I have assurance that they’re serious about working w/ me, and they have assurance that I will fulfill my end of the bargain, since they don’t pay me the remaining 50% until the project is complete.

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Brigit | Biddy Tarot

I always ask for payment upfront, whether it’s for a Tarot reading, class or 1:1 coaching. If the client can’t pay, I can’t deliver. Simple as that.

For the bargain hunters, I never compromise on my price because I value my time and my expertise. So I have a list of Tarot readers who provide free readings in exchange for feedback on my site, where I direct the ‘bargain hunters’. I never do a free reading.

You’ve got to stand your ground and value what you do, otherwise people will walk all over you.

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Fiona McAllister

Thanks for that Brigit. I love If the client can’t pay, I can’t deliver!

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Jesse Fung

Hey, I also have a problem with customer attraction. I have the audience over on Facebook in groups and pages where they offer and buy stuff. Over at my site I aim towards college and high school kids in NYC that need to spread their product or used item over the city. I have trouble getting them interested to post and I sort of know I need to lean towards the path of being special or different.
Thanks, Marie! I hope you can answer this! Anybody?

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Favi

This is one of the hardest lessons to learn when you start to work on you’re own.

I’m a Fashion Designer with a small office with sewing machines that i handle my self. For the first few years i struggled a lot trying to tell my clients that they had to pay up front, it’s normal to say pay 50% up front and 50% when you finish the job. But sometimes when you actually don’t know how much you’re going to cut and sew it’s difficult to make a quote.

Had a huge discussion with a recurrent client last year because of production that she couldn’t pay and wanted more and more with no payment in sight.

Settled with her on a payment plan (it wasn’t easy). But i won’t ever again get caught in that position, it’s my time,work, effort and money that they are using.

Great advice on payment before the delivery of the work. i will have to add that to my guidelines.

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Trish Allen

I am a Voice Coach and have had some trouble with late payments and bounced cheques (which were covered quickly) in the past. Now I always ask for payment up front- or occasionally at the 1st session if they need to pay cash (I work with a lot of young actors who are servers). Love Interac payment- but I take PayPal if they need to use a credit card. I have only been stiffed once I can recall- and my flake radar was always way up with the guy- he had missed sessions and cancelled at the last moment a couple of times and I had gone from not being keen on him to actually disliking him- very bad in my business. I thought he was gone. Then he showed up 2 week laters at his time at the beginning of what would have been a new cycle of sessions ‘unaware’ that he owed. I was very definite that I would charge for any more sessions he failed to cancel with 24 hrs notice- like any professional. Against my better judgement I did the session- said he could give me the fee next time- and I never saw him again. I called a couple of times to say he owed for at least that session with no reply. And then I decided, even though I felt like a shmuck- it was worth being stiffed to have a valid reason to stop working with him.

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Stefania Delprete

That’s a great lesson.
This weekend I will offer a workshop in an holistic centre and they provide for the payment as I have to register as self-employed or set up a company to receive payments! Oh, it was so strange to don’t have the control on that. I learnt a lot too.

For the next workshop I want to be able to receive payments and manage a “payment botton” and then we happily meet the day of the seminar.

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Fiona McAllister

Thank you for these lessons Marie. I am getting ready to start my own business in the next few months, and knowing that I need to charge up front for service is a great insight. I have had worries about how to avoid that sort of thing.

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Kim

Oh my goshhh my boyfriend has this problem all the time! He has a moving company and some of the moves are priced under an hourly rate, which meas theres no way he can ask for payment upfront. We tried deposits, which for the most part worked, but even government contracted jobs take months to pay us… he has to track people down all the time. Talk about not working with your ideal client…. Any suggestions guys?

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Elena

Ooooooh, yes. There have been several types of sneaky no-pay customers at the beginning of my business life, as a bodyworker. One time a man kept on insisting that I keep on working on him after the hour and a half session was up. I mentioned my fees to make sure he planned to pay me for OT. I worked on him for 3 hours and he then refused to pay me ANYTHING! He explained that he expected to be cured, or what was it worth to him? Never again. Payment happens in cash up front or through an internet pay system, period.

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Letitia Elizabeth @ Branding Academy

Oh I used to be super naive with clients. I don’t know if its more my outgoing generosity or that I meet clients who I get supremely passionate and excited about that I just want to put helping them first and worrying about the biz $$ side later. But now I try to protect myself as exhausting as that might be. I’ve also learned to embrace barter. After all I’m in the biz of helping the underdog creative entrepreneur get her launch on no matter how broke she is :)
But these are great tips ladies!!

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Trish Allen

I have always used some barter as a lot of the people I have wanted to help so far were creative but challenged with cash flow: I have traded for some great art that way- also housekeeping services, office assistance and packing and unpacking when I last moved.

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Linda Chaousis

Bartering is a great idea. I do think sometimes it is my outgoing generosity and passion for helping clients as a coach that has me launch into coaching conversations over coffee, agreeing to meet again and again without worrying about the $$ side and giving away a lot of advice free. Bartering is a great alternative to asking for $$ if in some relationships does not seem feasible or truly comfortable.

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ana

I’m a web developer too and I often often get very delayed payments. Sometimes i don’t even get paid which makes me want to cry sometimes because I’ve spent a lot of time and effort and I don’t get paid for it.

I don’t even ask for upfront payment because I fear that I’m being rude and being from the Philippines a lot of people take advantage of our “fear for confrontation” which is a cultural thing mostly.

I really really hope to learn from this and thank you so much Marie.

Ana

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Marie Forleo

Ana – woman! I hereby give you permission to be clear, elegant, strong, and most importantly, value your worth. You have it in you. YOU can be a living demonstration and break the chain of “the way it is” in your country. Create a new way, starting now.

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Marinda

Amen to that, Marie! You can do it, Ana!

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Karen Wolfer

I do solar (photovoltaic ) installations and only two people have tried to not pay me in 18 years. One time I had to place a lien on a property, and eventually received payment, but this time I will be taking them to small claims court. I hate having climbed on a roof in hot weather and then not being compensated for the work. And this non-payment is by a woman! Ouch. I do collect 1/2 down for all components before I order them, then get full payment before delivery. Labor is paid after all work is complete.
The legal system is there to help after the fact, but as Marie (and Dr. Phil) so wisely state, we train folks how to relate to us. Clear, written policies ahead of time can save most headaches.

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jennifer elizabeth

being that i design jewelry i get contacted by a lot of retailers asking to consign my work. my prior experience with consignment has not been good…i either have to chase down my money or my product becomes shop worn and unwearable. even worse there have been times i never got my product or my money! i came up with a simple solution, i just say no to consignment. period.

on the surface it may seem like i’m loosing business but the quality of the business matters more than quantity. there are plenty of retailers willing to pay for my goods up front AND there’s the internet where you can sell online 24-7 worldwide!

clear business policies work wonders!

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Caylena

So… I have two clients that have yet to fork it over. One of them paid, but her check bounced. She keeps making excuses and telling me stories. She said her account was hit with a scam … maybe it’s true, but then she said she mailed me a money order. We live in the same town and the money order has not arrived in weeks-months, so it’s pretty clear she lied about that.

The other client just hasn’t even sent a check. I sent an invoice, nothing. I sent a follow up invoice and a letter. Nothing. I sent another letter and invoice, certified, and it was returned.

So with these two non-paying clients I’m out $150… not the end of the world, but still somewhat significant and I want my money, but I’m at a point where I don’t know what to do anymore.

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Dedi

I learned the hard way..with someone in the same profession..a pet sitter hired me to scoop her yard …she had never cleaned it…when it came time to pay after I cleaned the yard her husband said he didn’t have the checkbook. All invoices and demands were ignored. Never thought someone in the same industry would stiff me…but they did. Luckily, this happened early on in the starting stages of my business and I was able to change to pay first then services rendered. I have never had anyone complain or feel I was being rude. If they do not pay I do not come out to scoop the yard..never again will I be stiffed.

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Shell

Marie is the Bomb!!! ;) Xo

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michelle wolff

I am an artist and do a lot of custom work. I recently went to full payment in advance. I make sure clients have seen my portfolio on the website and know what they are getting. I also let them know I will make minor changes but the price is non-refundable due to the work being a custom order. I worried this would result in lost business but it hasn’t. Believe your work is worth the money and be no-nonsense about it and that’s what will come across to your clients.

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Linda Chaousis

I have a similar problem to some of the others who find people want their work for free. I am a coach and a consultant and people often tell me I’m so easy to talk to, they feel so encouraged and motivated after talking to me etc etc and suddenly the ‘can we meet for coffee sometime’ has turned into regular catch ups that result basically in free coaching for them. Or people who can well afford coaching, asking me if I could ‘mentor them’ which I’ve seen in most cases as asking for ‘free coaching’. I would not go to a personal trainer and ask them ‘oh, could we have coffee once a month to catch up and you give me some tips on exercise?” I need to think of a good script to move these people who think we are just ‘networking out of professional friendship’ even though the whole conversation revolves around their issues to convert them to paying clients. I do see how this demonstrates lack of respect on my part for my time and for years, my daughters and I have repeated to each other Dr Phil’s you teach people how to treat you. Thanks for this reminder Marie. I think the starting place is for us all to have faith and confidence in what we have to offer and that it is well worth what we would charge for it. Love your work and get so inspired by the great women who post on your site. I like Michelle’s comment about ‘be no nonsense’. Think I have to do more of that!

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anne

hi Marie,

Great video that got me thinking…. and that’s always a good thing.

On a small scale, I have not been paid. I organise cup cake decorating workshops. The cost is 12€50, drink and snack included and 6 decorated cupcakes to take home.

2 people who had booked did not show up last time.
which means:
- I loose the fee od those 2 people
- I could have had 2 orther participants in their stead
- I end up with another 12 cupcakes that are not put to use

Thank you for the lesson, Marie, I will invoice people BEFORE the workshop. Everytime I watch one of you video’s I learn something.
Thank you so much, Marie!!!!

Anne

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Marinda

Sounds like you need to raise your prices too, while you’re at it Anne! ;) What you’re offering is worth at least €40. Check out Marie’s previous video on that subject… http://www.marieforleo.com/2012/08/raise-prices/

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lara

Hi Marie

Thanks for yet another great video. I would always collect payment first before providing a service. This is the preference.

If this is not possible though and you’re finding it awkward being friendly to the client whilst also having to ask for payment, then here’s one suggestion on how to handle it:

Create another email account just for collecting payment e.g. finance@xyz.com with generic emails regarding invoicing coming from this email account only. You can sign it off from The XYZ Finance Team, even though its from you.

This way you can detach yourself from the “backoffice” side (appearing that someone else is handling it) whilst remaining friendly on the “frontoffice” side to your clients.

Hope this helps!
Hugs
L x

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Hrvoje Livnjak

You’re great Marie! What to say more.. at first I thought that the show is well.. too much of a “me” factor but your episodes are better and better..

Now to dig into the question and answer and my comment on that..
I charge all clients 100% upfront.. 2 things.. That shows me they are serious about the biz and second.. they have my full money back guarantee as well as operator who is processing the credit card.. in this case paypal.. plus.. the tip.. testimonials always help with your credibility..

keep up the great work u do girl : )

best,
Hrvoje Livnjak

Reply

Desha peacock

You crack me up mrs. Marie! This is very helpful advice, I’ve dealt with it and still dealing with it, I often want to provide services to people who are on a superbly tight budget, so I offer a sliding scale and I’m going to start offering scholarships as well. I agree that paying up front is a fine idea, and my goal will be to set up an online payment system. Thanks again, I always enjoy your shows so much!

Reply

Amber

In the beginning of branching off from an agency I battled with a client wanting my public relations services for $50 a month or offering to do my hair every 3 months. Usually these clients are “slowpayers”, hard to deal with and are abusive in many senses. I also had that client who wants to call, text, and email all day with questions. They say they want to move ahead and start business with me and when it is time to pay they disappear. Somehow, magically they would pop up again with more questions.

I now charge a consult fee. This also helps me gauge what kind of customer they will be.

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Kelly

I had a boutique store not pay me for a shipment of my clothing line. I was quite young when I had my Business and did not have the proper tools in some areas such as this. I tried calling several times and emailed as it was on the other side of the country. This grown “business owner” just kept avoiding me! I couldn’t believe it, I was shocked as I was more of an adult then her at 20. I never got paid to this day and as I have not been doing that business for a while now I often think about that store and how they got a entire shipment that I never saw money for.
What I know now and from this video about covering yourself with policy’s etc… I will not be letting it happen again. yay!

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amy

how do you register for bschool?! I love all the videos but cannot seem to find a link to register…

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Rodrigo Flamenco

I ask for 50% in advanced, then I use another domain for “testings” but that is actually so I can have the websites on my power until they pay the other 50%, and with videos I use watermarks and I take them out until they pay the other 50% :)

I’ve come across many people who disappear after delivery and don’t pay the other 50% so it’s good to take measures :)

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shari reinhart

So Marie, I listened to your tips and I’m still not finding the answer.
To keep it short:
Publisher face to face meeting, email follow up to meeting and on the invoice it is clearly stated to the publisher that I take 50% upfront (he paid) and the balance upon delivery of end product. All articles, editing and proofreading submitted, within days I sent the invoice for the balance and followed up every 2nd or 3rd day with an email request and a phone call (no answer) – Finally I called his cell – he answered – I said “Hi, it’s Shari Reinhart” and he proceeded to CHEW MY INNOCENT HEAD OFF. I couldn’t get a word past his crazed yelling and then he hung up. till refuses to answer email or phone calls. Is it time for a lawyer’s letter? Do you have a more creative, prettier suggestion?
Thanks Marie

Reply

Aradia

I’ve had a narrow run-in just once. But somehow I managed to get paid and settle it all out. I think for myself, and anyone else who has a product based business, it can feel easier because as you said Marie when you go to the store you pay right there and then. My problem area comes up when it’s a custom order and I have had a number of people shirk on the cost and stop paying in the middle of my working on something. I haven’t figured out a good way to deal with that aspect yet either.

I do understand how it feels to be a service provider, as my other business focuses around that. But I think you can always put in a clause that if you are dissatisfied with the result of the service that you could discuss that and make a decision as to whether you would issue a refund. I would say put a time limit on this offer, but also use that to take even more care in the services you offer and what results should be honestly expected over what time period. To me that seems like it would protect you from having someone trying to say you didn’t do “such and such” when really that expectation is unrealistic.

Love to you Marie and all my brothers & sisters in the Love Forleo Fam!

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Jeannette

Great tips and advice. After becoming certified as a grants consultant, I learned how to draft contracts and the importance of requesting fees. It’s not something that you have to state right away, but once I complete a FREE consultation with clients, I then proceed to draft a contract for agreement which states that a deposit is required upon starting a working relationship. The contract also states the length of the project, responsibilities on both parts and dates that payment is due. Hope that she was able to get that issue resolved. It’s wonderful doing what you love to do and it’s great when you are financially compensated for it as well. I mean, you gotta eat LOL

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Llyane

I also had problems with payments before I decided to charge upfront.

Even the clients that I visit, I ask for their payment on a monthly basis, the first session I have with them in the month.

I tell them that, in order to book the month with me, they have to pay in advance. This way I can plan my calendar, and I can guarantee my availability.

I did loose a couple of clients when I switched, but It was so worthwhile, and my clients do take me seriously and rarely they make any cancellations.

Thanks, Marie, again!

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Jen Smith

Great video as always, Marie.

As a coach I used to accept payment at the session but just found it a hassle. The client has to remember to bring money, I have to ask them for it etc. I decided to go down the pre-payment route early on and just found it so much easier and all my clients seem to prefer it & most have said so. We can both just concentrate on the session when it happens and the money part is out of the way and done. I had my first no-show recently and this just saves all the hassle that could come with also not having payment and luckily your other video on that helped me navigate that situation.

Jen x

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Laura Hurtado

Marie:

I identify myself a hundred percent with this Q&A video, I work for a company (Grupo TRESS) that produce a Payroll software, we sell the product and we also sell the support service to keep it working or to resolve doubths from the clients who bought it. Some of our clients delay the payments as much as they can, becuase it is important for them to get the service but not to pay, we have a policy in the company, we love our clients and we take care of them, BUT to provide a service we ask them to buy a number of support hours BEFORE we start any activity. When they have specific projects, we also send them via email, the total cost of the project and we ask a payment in advance BEFORE we start. We have educated them to be proactive and not reactive, they know the rules, but even when most of them know how must the game be played, some of them always want to take advantage of any situation, thank good they are the less.. Thanks for sharing

Laura.

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Marsan

Marie,

As usual, you are right on the money. One business tweetable I always remember is “People do not respect what they get for free”. This applies in all areas of your life. Always remember that and you can avoid problems later.

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Stefania Delprete

I’ve just apply the lesson of this video now! I’ve not jet a cool platform for independent online tuitions, I just respond to a job request through a social media.

I feel like I am a beginner in handling prices and proposals. I am pretty confident I will improve. Thanks Marie!

Reply

Robin

I’m a 20 year veteran of the home design and renovation business. I had trouble with this issue a few times early in my career. However, now, I charge people a consultation fee payable at the appointment, but I LOVE the idea of being able to e-mail a link for payment before even scheduling the appointment. Now, when they decide they want to work with me, I charge them a retainer up front that I hold until the end of the project, and invoice them monthly for the time I’ve spent that month. I stipulate in my contract that invoices are due upon receipt. If an invoice is in arrears by two weeks, a work stoppage ensues until the account is up to date. This seems to have fixed the issues.

However a colleague of mine suggested that I bill in blocks of time up front and send statements monthly to show how much is left on account. I love that idea, because then I’m always ahead of the game and am not the client’s bank!

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Hilary

Graphic & Website design here as well. I occasionally do consulting work with a 100% payment before or at the meeting works (I keep square or paypal iphone credit card readers in my purse just in case.)

The bulk of my work though is design projects and for that, 100% payment upfront makes people uncomfortable. There’s risk for them that the designer will simply not deliver anything. I have met with people who have had their past designer disappear after a full or substantial payment and I respect that they want to protect themselves.

SO what I’ve learned works best for me over the years is:
• 100% upfront payment required if something is approximately $100 or less.
• 50% downpayment with remainder on completion OR if the project is large enough, 50% down and milestone payments.
• If a client is unsure about large final or milestone payments, I’ve done a FEW with a 50% downpayment and MONTHLY payments after that (only when it’s a website and the site will be on my servers.)
• Hosting and domain names are paid upfront and billed annually 30 days before renewal.
• Printing is another item that’s paid for upfront. (Basically anytime anything is purchased that can’t be returned if I’m not paid, it’s payment upfront.)
• If someone is managing their own hosting, final payment is made before any website files are given to them (and they’re on their own for getting those files on the hosting if they are not using an approved hosting provider.)

These are my general rules. I’ve got a couple of exceptions on a select few who have been with me for a long time. I also don’t expect anyone to remember these rules except for me so anytime a payment is due, it’s always made clear to the client what is due and when.

On those projects that get stuck in an incomplete state, I tend to wait a certain amount of time (depends on the project size and timeline), give the client warning that I’m going to put the project on perma-hold and bill out for the current balance for time spent to date. I used to just let the projects that had hit some stopping point linger without payment and that’s on me. Getting payment for work completed to date means it shouldn’t matter to me if the site never goes live (ok ok, there’s one BEAUTIFUL site that’s not live and is practically finished, that HAS been paid for that I really want to share it with people and that still bugs me. But at least I’m not stressed about it waiting for payment.)

I did have a client last year go awol on hosting and domain name payment and it’s the first time that’s ever happened. Email invoices sent, at 30 days I manually switched it to snail mail invoice reminders (I use freshbooks to send invoices automatically), phone calls were made and no response. My 90 day notice includes a warning that hosting (and thus email) would be cut off if I didn’t at least hear from them. Cutting off client’s hosting and email usually gets people’s attention but with this client there was still no response. Even calling from a number they wouldn’t be familiar with didn’t get me anywhere (though they still had the same voicemail.) It’s been a year now so I’ve even let the domain name go. I have no idea if they went out of business or what happened. It wasn’t enough to be worth small claims court or send to collections or anything so I just dropped it and moved on.

My point with this last one is you can’t predict everything. There wasn’t even anything for me to really learn from the situation either. You do what you can to mitigate problems but sometimes a small loss is just part of doing business.

Oh and one more thought: ESCROW is another option to protect both buyer and seller. I haven’t used it personally but I wanted to bring it up because it might be a good solution for some people depending on the type of business they run.

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Linda Ursin

I’ve had two or three clients that didn’t pay on time, but after reminders with added fees, they eventually paid. Now this was back when I shipped C.O.D. I don’t do that anymore, I demand payment up front.

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ixeeya

This is a lil different but it has to do with follow through… I facilitate events and workshops for women. I end up spending alot of time talking and emailing with people , “tea dating ” who act very interested and enthusiastic then dont follow through with coming. I Find myself frustrated with spending the time and energy with them. Originally thinking it was a good strategy to make connections that would lead to them joining in. How do you handle enthusiastic clients that want alot of personal connection, time and energy( the infimous tea dates! ) but dont want to committ to working with you . So many people want to have tea with me to talk about what I do, our “similarities” or how cool it is we do the same thing. My business is womens culture so connecting with women certainly does feel natural and I really do care and feel enthusiastic to connect with them – but as I grow I am overwhelmed with the idea of meeting everyone for tea, making all the “special connects” taking up alot of time and in the end feeling financially and energetically exhausted and feeling I have no free time for myself or personal friends ! I know I need better boundaries and policies – wondering if anyone can get me started with how to begin and how to begin in a gracefull way . thank you !

Reply

Exploring Souls with Nahanni Faith

ixeeya, maybe you’ve thought of this already, but what about running a webinar or teleseminar for people to get to know you a little bit and get a sense of what you do and how you work? It could help you reach more people while also freeing up your personal time.

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ixeeya

Thankyou – that is a great idea – I will give that a try !

Reply

Cecilia

Ixeeya,
Oh yes, the tea date… :) The other option is if so many women in your city are looking to connect with one another, why don’t you start a networking event or meetup group? People could pay a little bit to come and then you position yourself as a leader in the community.

ox
Cecilia

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Anita Kaiser

Hi Marie, Today was the first day I watched one of your episodes having heard of you previously but really deciding I need to hear what you have to say after watching Danielle and you on the rapid fire. You are so what I need in my life – that fire that spunk – that humour – woah girl – can’t wait to hear more. B school isn’t possible for me this year – but I’ve got it in my sights for next year!
Fabulouso! Thanks for sharing the goods!

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Rachel

I have a client who I have been chasing payment from since August 2011. It was at a reduced rate (first mistake!!) and she said she would pay on the day. She has now paid half of it but I refuse to edit the images until she has paid the rest. Only now she is asking for another shoot (and asked to pay late – I said no) What I would really like to be done with it all and archive the images, accept it happened, not let it happen again and not have to work with her again. Not sure how to do that politely without her bad-mouthing me. Our children go to school together and I don’t want to risk any bad publicity.

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Kari Addison

Educate your client.

I collect my final 50% day of service by handing them an invoice.

I make sure they understand their date for service isn’t secure until I receive a contract with a 50% deposit and I give them five (5) business days to do this before the contract expires.

Hope that helps!

Cheers,
Kari

Reply

Renee

Great insights all round.

Thank you.

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Emma Gwillim Life Design Coach

A bit late to the party on this one…!

I have, in the past, been a little too trusting (read: naive) when it comes to money. As my big motivator is to help people, I have had the odd situation where I’ve not chased for the £££ as I wanted to help. But I quickly learned that wasn’t helping me or my family.

The things that helped me:
- Remembering the bigger picture: My overall goal is for freedom for me and my family and I learned to focus on THAT feeling (rather than feeling awkward about asking for monies owed!).
- The book ‘Overcoming Underearning’ – big recommendation!
- Reframing the whole ‘asking for money’ issue: rather than see it as I had been (negatively), I saw the VALUE that I was offering and know that for fee is worth the results…. And that by charging people I can continue to help people on a bigger scale.

Reply

mark

What do you do about clients who don’t pay when you can not bill up front because most of my work is Hourly. Therefore I can not know how much time I will be working for any particular client. But I still have clients that are months past due regardless of receiving an invoice every week.

Regards,
MJ

Reply

robin siegerman

Mark; Review your invoices over the last 6 months. Figure out the average number of hours you spend each month per client. Whatever that average number of hours is, bill them that block of time up front, then keep track of your time and give them a statement at the end of each month with an accounting of how much time you’ve spent and the balance in their account. This is what I do and I charge hourly as well. When you get within about 2.5 hours of the end of the block send them an invoice for another block. Put in your contract that if the block of time runs out, work stops until another block is purchased. this will stop the non-payment issues dead in their tracks! Good luck!

Reply

kylie

Help everyone i need advice! My former boss hired me to design corporate identity for one of his clients before i resigned my job. I have being told ” we are partners” ” we are a team” the power of his lies motivated me to work 10+ hours each day, i just did everything i could to make the organization is happy with my work and finally they signed the contract and paid my former boss upfront fee 300k in full. now the problem is the former boss changes his mind and says he is going to pay me only one month of salary for the last 45 days of my hard work. he hasn’t got any final files yet but i did send him all of the options files in low-res via the phone and emails. when i found out he doesn’t want to spilt the profit i asked him to pay me my salary before i send him the next item. He ignores my request and i haven’t been paid for all of it yet! should i visit his office or speak to the client straightway? How? I would appreciate any advice you give me!!

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Gabriela Estrada

I create a payment plan with my clients, making sure that it sets them well. Once we are agreed, I continue visiting them and making calls once a week to make sure everything is working right. If they don´t respect the payment plan I visit them and start taking some of they´re products that I might need for my business (we are both agreed with this negotiation). I don´t know if it is correct, but it has worked for both parts.

Reply

Alani

I do not know how you do it… but every week when I struggle with something, I sit around wondering, with my fingers in my hair… “how the heck am I to solve this?”…. AND THEN!!! I see your vid for the week and I am blown away! Every single topic effects me! I know it might sound silly… but it’s in fact very very true!! Thank you xxx

Reply

Malika

I found this super tricky (ridiculous I know but a part of my process :-))
asking clients for money was a super squirmy topic until I realised two things – they were responding to my body and spoken language of – I don’t really want to charge you what we have already agreed – and also, my time is one of the most precious things I own, so why was I putting such a tiny price on it?
So I practised a power pose (arms up in a V for victory shape for 2 mins a day) and decided that whatever I was going to give away, my time was not going to be on that list.
Now when I state my rates, or ask people to pay if they missed all the reminders, my certainty in my voice and pose gets a much more generous response :-) and being specific about amounts and time scales and offering two choices – pay when you book or pay at the end of the session – has really tightened up my finances.

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Darrell S.

I own a videography business and I typically get calls from prospective clients who want certain projects done. Everything always sounds good until they say” I have no budget but this will be good for your portfolio” . Am I wrong for telling them no because video equipment is not freeand I am a business??

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Jefferson Schnickel

i loved your answer to Js question and all the Baby questions. i feel the exact same way- "definitely someday" and it might not be easy but it will be wonderful eventually.

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Miss Blossom

I’ve worked hard to build my business and have had successful relationships with literally hundreds of happy clients. I recently branded and build a beautiful site for a client, who through playing dumb, calling me constantly and changing her mind, ended up owing my small boutique business thousands of dollars and suddenly the day before launch when we sent the invoice she send a nasty email, locked me out of her site’s admin and refused to pay the balance. I was devastated, both financially and in terms of the time I had allocated over other clients the previous week. She had simply changed her mind. In my business every client matters and every job counts, and to have this happen was very upsetting. Now, there are things I can do to recover the money as we have a contract, but being in another country makes this a little harder. Tha main issue for me was to recover from the incident emotionally, because I was invested in the work. I have to ensure it doesn’t affect the 30 other projects I have to work on. So tomorrow is Saturday, so I am going to work on other client’s pages, clients who will pay, and make up the money. There will always be cheats and liars who prosper,but they will always be cheats and liars and have to live with that. I have a clear conscience and have other clients with strong ethics and who I can trust. “Next!?” Xxxx

Reply

Troy Palmer

Miss Blossom I am so sorry to read your story. This has been my story for many of clients who wants something for nothing. Unless you can sue them without losing more money, you have to write of clients like this on your taxes and gain some money back that way. I am in the same business as you, so I know your pain. In the future, learn your new clients budget first (if they don’t tell, that’s a sign of trouble to come), next build them a solid product based on that budget, only give extras if you want to. Get 50% down to start, when client invest their money they will respect your service. It is very important to have control over the Administrative Rights. Link them to a development site to show progress. But only you should know the password and user name until you are paid in full.

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llewellyn abby winters

This site was… how do I say it? Relevant!! Finally I’ve found something which helped me.

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Troy Palmer

Very true! For me as a Web and Graphic designer with multiple skills. I have the most issues with Family & Friends who I try to give a deal (a.k.a. The Hook-Up). I cut my price by 50% and offer every feature they can use for success. Lord-Hav-Mercy! They still don’t want to pay the half price, but they still want those features, all of them. The above can be said for Small Businesses and Churches. Everybody wants the works for almost free and still won’t pay up. I have had a attorney draw up a professional contract, but if you have to go to court for a balance lower then the court fee you still lose.

Online Portfolio: http://www.tapworks.biz

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