Business Start-Up: Getting Paid

We’ve talked about finding the customers; we’ve looked at getting the work (i.e. the writing) done. Now we’re going to focus on the third element: getting paid. Talking about money is something which new business owners often find very difficult.  However, no-one will think badly of you for charging a fair rate for your work.  After all, that’s what they are doing, whether they are running businesses themselves or working for someone else.  So here are my tips for how to get paid:
 
·       Do make sure you have a system in place to collect money, which means keeping a record of what you’ve done, invoicing at an appropriate time-period (weekly, monthly or at the end of the job), and chasing invoices if they are not paid on time. Otherwise not everyone will be honest enough to pay up — and that will be very bad for cash-flow.

·      Try to negotiate at least some percentage of the money in advance.  This is especially important if you have to buy materials or incur travel or other expenditures in order to do the work.  However, it is also a way to reduce the risk that you will not get paid.  Unfortunately, there are people out there who will take your work and then refuse to pay.

·        If you suspect that there is going to be a problem with payment, then cut your losses and walk away.  A customer that doesn’t pay is not a customer that you need (or can afford) to keep.

·       At the end of the financial year, many organizations, particularly public ones, are looking to spend excess budget money, on the “use it or lose” basis.  So the last couple of months of the financial year could be a good time to prospect for work.  Even if they don’t need the work done until the next budget cycle, they may be willing to make an advance payment for services to be supplied later.  Now that’s a really good way to “borrow” money without incurring interest payments.
 

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By Elizabeth Ducie

Elizabeth Ducie was a successful international manufacturing consultant, when she decided to give it all up and start telling lies for a living instead.

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