A group of colleagues and I were having a conversation about crappy clients who don’t want to pay professional fees.
My advice – get rid of those losers. You’ll never be able to do your best work or move forward and grow your business if you keep saddling yourself with them.
That seemed to strike a pretty unanimous chord so I asked everyone if they experienced these frustrations on a regular basis.
A member commented that she has clients who really like the word “barter,” but bartering doesn’t pay her bills.
Truer words have never been spoken!
Oh, the ol’ “barter” game. Ugh. I see those articles that recommend bartering and it’s such BS.
Bartering might work on a one-time, very quick, simple, straightforward basis here and there, but not for long-term, ongoing situations, and only if the terms are very explicitly spelled out and what you get in return is really and truly of value to you.
And I tell ya, people in our industry who barter usually get the short end of the stick in these situations. I’ve seen it time and time and time again.
They will bust their butts giving these people their all, but far too often, when it comes time to pay the piper, barter clients make it their last priority, can’t seem to spare the time once they’ve been helped or give back absent-minded, second-rate work in return like it’s a bother to them.
They have a way of conveniently forgetting the terms or coming up with all kinds of other excuses about how they didn’t get what they expected so they’re not going to honor the terms of the deal.
Oh, and don’t forget that most of these clients automatically assume that you’ll be doing work first before they have to give back in return, instead of the other way around.
I bet you did, too. 😉
Let me share a story…
Many years ago I had a client who was constantly getting involved in one new side business venture after another.
To clarify, when I have a client who has more than one business he/she wants support with, I charge a completely separate retainer for each additional business. I don’t allow them to mix and mingle work for different businesses. I’m not here to work for free and I’m not offering two for one bargains.
So anyway, this client was always trying to get me to accept stock and percentages in these new companies instead of having to pay actual money for my services.
It was always made to sound like I’d eventually make waaaayyyyy more money with these options and ownership than I would with my retainer.
I always politely declined, and finally, after being pestered to death about it for the millionth time, had to once and for all get super direct and tell him in no uncertain terms, “look, I’m just not interested – stop asking.”
Stocks and percentages that may or may not come to fruition some day don’t pay my bills today.
I also wasn’t interested in the convoluted accounting, reporting and admin involved in trying to keep track of what my shares were worth from one minute to the next.
I like to keep my life and my business SIMPLE. There’s nothing more straightforward than “I do this and you pay that.”
Well, guess what? Every single of one of these little side ventures went nowhere.
If I had accepted stocks and percentages and incentives as payment, all those months and months of work would have been done for free. And I would have had to get rid of that client because it would have soured the relationship.
No, I just am not the least bit interested in getting myself into situations like that.
If you want to accept an ongoing barter arrangement, use your business noggin and be discerning about it:
- Don’t give away the farm.
- Don’t let it take up more than 10-20% of your time/client roster. (The rest needs to be reserved for cash-paying clients.)
- Draw up a contract like you would with any other client and spell out the terms of the trade very explicitly (e.g., exactly what work you’ll do, how much you’ll do, what the limitations are, what the dollar value is, what you are to get specifically in return, when you’re to get it, etc.).
- Make it clear that if you do a certain amount of work in a month worth X dollars, you need to be paid back in kind the same month (not months down the road).
- Include a clause that provides for cash payment in full being immediately due if the client breaches their end of the bargain or arbitrarily decides to terminate the arrangement.
- Invoice for the work just like you would in a paying situation so that the client sees on a regular basis exactly what they would have been paying in dollars.
- Bill on the same schedule you would for any other client.
- Stop selling yourself short. Remember that you are giving them something of great value. You make sure they understand and remember that and maintain the right attitude about it, too, by doing all of the above.
Keep in mind, too, that “barter” does not mean “free.” You are both still required by law to report the value of each other’s services as income come tax time.
(Which, by the way, is a whole other reason I don’t like barter: having to pay cash money in taxes on income I didn’t receive in actual dollars.)
And consider this… if this were any other retainer client, they would be paying the fee upfront before you started working. Why should a barter arrangement be any different?
If they want you to work on trade, insist that they deliver their trade work first before you lift a finger.
If they are serious about the arrangement, it shouldn’t be a problem. Remember, you’re doing them the favor, not the other way around.
And for goshsakes, stop discounting your fees!
Why on earth would you think to do that? Is the client discounting their barter services from their normal cost? If anything, you should be RAISING the price of your barter services just for the fact that you are granting them an exceptional benefit that comes at a much higher cost to your business.
The bottom line is this — offers to barter and trade or give you stocks and percentages in companies are just BS ways people try to get out of paying you fairly and squarely.
It’s not your job to subsidize other people’s businesses – you have your own to take care of. And that ain’t gonna happen if you’re giving all your time and energy to clients who aren’t paying for the privilege.
Never be afraid to say no to cockamamie schemes and flat out tell folks that the only currency you deal with is of the cold hard cash variety.