Win Without Pitching®: Thinking

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Okay Win Without Pitching jedi, you’re winning more business at higher margin and lower cost of sale. Congratulations. But if you’re having trouble collecting some of that money, this post is for you.

You reinvent the firm one new client at a time.

Most of the new habits you want to establish in your client relationships are easiest to implement at the very beginning when your power in the relationship is highest. Leverage that power to set the terms that you want and then be vigilant in enforcing them when client behavior gets lax.

Draw a line in time that is today. After today your new policies and standards on getting paid apply to every new client. The average firm turns over its client base in 3 to 4 years, so follow these policies and standards and your receivables problems will eventually be a hazy memory.

New clients must pay before any work begins.

New clients pay a deposit before any work begins. Period. This is policy and there are no exceptions.

I know firms that have never mastered this simple idea. To my great disappointment, firms I have advised for years I later learned have never corrected their bad habit of beginning the work and then having to chase the money. Some of the largest, most famous firms in the world haven't mastered this, and yet thousands of firms have. The difference comes down to one word: resolve.

Some people are fed up chasing receivables and some have accepted it's part of business. It doesn't have to be part of your business.

Fifty percent of the fee portion of the first phase of the engagement is a good place to start for determining a deposit, but 100% might be appropriate too, depending on the nature of the work and the size of the phase and/or fee.

After the first project or when the client has demonstrated they will abide by the financial terms of your agreement you can waive the deposit requirement.

Offer discounts for full payment up front.

Any CFO of any reasonably functioning (and cashflowing) organization will take a 10% discount for paying the entire fee in advance. When an established company fails to take this discount it should raise an amber flag of warning.

Yes, 10% is a lot of money but it's a small price to pay for getting a good night's sleep. Consider including it as an option on your invoices.

Be vigilant until the client is fully trained

The first time a new client fails to pay an instalment or balance on time, call. Call the day after the payment is due. Be polite but let it be known through your behavior these contractual terms you agreed on will be enforced.

If a pattern of late payments starts to develop, address it. “We need to have the grown up conversation. This is the third time in six months I've had to call because of a late payment. I know you appreciate we have agreed upon terms, but someone in payables does not. What can you do to help me sort this out?”

Play the Small Business Card

Large clients might try to use their size to pay on their terms and try to take the discount or in other ways erode the agreed upon financial terms. There is no harm (and a lot to be gained) in reminding the client yours is a small business.

Let the big kid know it's not polite to pick on someone smaller. “I understand the prioritization that finance departments sometimes need to do when it comes to paying bills. We're a small business. Cashflow is very important to us and the families of the people we employ. We need to get paid within the terms we agreed on. What can you do to make sure that happens?”

You could insist everyone pays in advance

This won't work for every creative firm (or even most) but it's your business and you get to set and enforce the terms. One hundred percent payment up front is a lot easier to enforce than any of the other innumerable terms. It will rule out doing business with some client organizations including many of the larger ones so think it through but don't dismiss it out of hand.

I have run a business where I've had to chase the odd invoice and I have run a business where everybody pays in advance. The difference to your mental wellbeing is profound.

Enforce it or forget it

Any standard or policy is only meaningful when it is enforced. When new clients start to show signs of being bad clients and they do not respond to some of the techniques above, the only leverage you have left is to walk away. This is the real test. Now that you know what to do, will you enforce your new standards or will you continue to put up with bad behavior?

Accepting onerous payment terms can be an advantage

I don't like this option but it's worth sharing. I once had a client in a specialized creative firm niche with a decades-long track record of success and healthy cash reserves. His category was being disrupted by affordable new technology and a plethora of upstart young firms. He focused on the largest client companies at the higher end of the market where he understood a competitive advantage was his ability to accept the onerous terms of his Fortune 500 clients—something his numerous fledgling competitors could not do. So he leaned into it.

“My second business is loaning money to some of the world's largest corporations,” he would tell me with a smile. He seemed to sleep fine at night, in part, probably, because his financial future was already secured.

Collecting from deadbeat clients

In a recent 2Bobs podcast episode, I interviewed David C. Baker on the dark arts of collecting money owed to you by clients who refuse to pay. If you do have to go to war on this issue, this episode is full of techniques to help you.

In summary, there are three keys to getting paid: start with new standards for new clients, summon the resolve to enforce your new standards the moment client behavior starts to slip, and be willing to walk away from clients that don’t honor their commitments.

Blair Enns
Blair Enns is the Win Without Pitching founder and CEO and the author of The Win Without Pitching Manifesto and Pricing Creativity: A Guide to Profit Beyond the Billable Hour.
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