Archive for the ‘Getting Paid’ Category

What Is Your Talent Worth?

What Is Your Talent Worth?

Not sure where I first came across this quote, but it’s a sentiment that always bear repeating.

To an extent, value is relative. Which is why it’s important to work with the right, well-chosen clients, clients who need what you have to offer and will therefore appreciate (i.e., value) it more highly.

That said, at a fundamental level, if you don’t value what you have to offer (and price it accordingly), no one else will either.

Does this resonate with you? I’d love to hear why.

Dear Danielle: Is There a Formula for Raising My Rates?

Dear Danielle,

Happy New Year!  I hope all your dreams will be actualized in 2019! My question relates to raising rates with current clients and if there a formula to follow. In the past I have used the script you provided in your blog post Raising Your Rates, and I must say it has worked like a charm. I love all the advice you provide on the blog in this category, especially about not letting fear get the best of you when you offer high quality service. Over the last couple of years, I have restructured my administrative consulting business. I offer a core service in two niche markets. During this time, I have retained five clients and have had great success. With each new client,I have incrementally raised my rates. This gets me to my question: The first client I retained almost two years ago is THRILLED with my service. Not only did I meet the contractual obligations, but went above and beyond. I really hit the ball out of the park with this client. They are often singing the praises about my administrative consulting firm. Since their two-year anniversary is approaching, I was planning on raising their rates. Is there standard protocol to follow (like tipping a server at a restaurant)? I thought I would raise my rates (REMOVED)%. This is a number I picked because when I see a vendor, utility, or dental plan increase by this amount, I think, “that’s fair,” but any higher, I feel like I am being taken advantage of. Next, I looked up the cost of living increase on Google. It is 3% each year for 2017 and 2018. That makes me wonder, would I be undercutting myself with a (REMOVED)% raise and should I increase to (REMOVED) %? Vacillating to the other end of the spectrum, I am obsessed with client satisfaction. I don’t want to raise the rate so high they feel taken advantage of. We have a dynamic relationship. Would seeing the numbers help? The client’s current retainer is $(REMOVED)/month. As I solicit new clients, they will pay $(REMOVED)/month for this service. However, I am not ready to lose this client. I truly value your guidance in this situation. Thanks again for all you do for our community!Name Withheld for Privacy

Thank you, and happy new year to you as well! And thanks for the great question which I’ve been chomping at the bit to answer for you.

First, congratulations on your well-earned growth and success. That is absolutely wonderful to hear!

I also want to let you know that I am keeping your name anonymous and removed certain info from your question for reasons I will explain below.

The short, quick answer is that there is no formula for raising your fees. I know people love to be given formulas, but it’s not that simple.

It’s also highly illegal for members of a profession/industry to discuss rates or setting standards or minimums or formulas when it comes to pricing as these things violate antitrust laws. Those kind of conversations constitute what is termed “collusion.”

The state and federal agencies that oversee these laws take violations very seriously so we never want to run afoul of them.

It doesn’t matter how big or small a business is, whether they are sole proprietors or big corporations, or how much money they make, we are all subject to these laws.

As they will tell you: ignorance is not a defense. This means you can be prosecuted for violations whether you were aware or not.

This is why I am always trying to educate our industry on this topic. Read this post for a bit more in-depth info: Dear Danielle: Why Can’t You Just Give Us a Ballpark Figure When It Comes to Pricing?

So for all the other colleagues out there, the bottom-line is this: STOP asking others what you should charge!

Not only are you putting yourself in danger, you are putting others as well as our entire industry in jeopardy. Your pricing is for you and you alone to determine.

The good news is that we don’t have to discuss specific numbers to help each other learn and grow in our business smarts and profitability.

Here are the things I would want you to give some thought to:

1.

Don’t compare what you do to a utility. You are not a commodity; you are a professional service provider.

Your value is relative to how you improve the life and business of each of your clients, not how much they pay for a box of cereal on a shelf.

Here are a couple of posts to help people better understand and remember what their real value is to clients (hint: it’s not how much/little clients pay or how much money you save them):

How has your work helped them advance, grow and improve in their business? What goals has it helped them achieve or get closer to? How much more time and freedom do they have since working with you?

When it’s time to raise your rates, be thinking along these lines and taking note of them, not just how much your workload may have increased, although that is certainly relevant as well.

People know that when they get more, they pay more. The benefit of connecting what they have gained by working with you, however, is that it helps keep them in a positive mindset toward fee increases, particularly when they are increased for more abstract reasons (such as cost of living) and not necessarily increased workload.

How you determine your fee increases and how much to increase them by is entirely up to you. There is no right or wrong way to do it.

2.

I’m concerned that you have one-price-for-all.

If you are providing administrative support, you are providing a variety of tasks, functions, and roles for each client, each of whom is unique and whose support areas, needs, levels, and objectives are all going to be different from the next client.

When you are providing a value-based service, there shouldn’t be anything cookie-cutter about your pricing. Each client’s needs and support plan should be evaluated and determined on an individual basis. This is something I show people how to do in my Value-Based Pricing Guide.

It doesn’t tell you what to charge or give you a formula. It will show you what factors to take into account, how to identify/categorize support plan areas and set parameters and boundaries, and give you as systematic an approach as you can get for determining your pricing around your support plans that is fair and profitable for both you and your clients.

3.

Capture their “before” picture at the start of every new client relationship.

When you consult with potential clients and onboard new ones, be sure to include a step where you obtain as complete a picture as you can of their current challenges, difficulties, pain points, and obstacles, as well as their desired objectives and outcomes BEFORE you start working together.

(If anyone reading this doesn’t have a consultation process in place, you NEED one now! Get my Consultation Guide for an easy, step-by-step plan that shows you exactly what to do before, during and after.)

Not only does this help you create case studies/stories for your website, it’s also incredibly useful insight to have when it’s time to raise your fees.

By better identifying what each client actually values and what they’re trying to accomplish through your work together, you can use that information to set benchmarks and emphasize those accomplishments.

They also inspire clients by helping them remember what life was like before they had your support and how far they have come and what a smart decision they made in choosing you.

4.

Survey clients for their feedback and suggestions on a regular, consistent basis.

This is something else that is useful when presenting fee increases as it can help you connect the dots from your work directly to what the client’s values, goals and objectives are.

I recommend getting client feedback at least every year for established clients, and more frequently (e.g., every three to six months) for new clients.

One caution, though: Don’t raise fees at the same time of year that you survey clients for their feedback and suggestions. Do these two things at different times of the year.

5.

Similarly, if you have my Value-Based Pricing Guide, you know that I also recommend reviewing every client’s support plan at regular intervals.

For new clients, you are going to do this more frequently because there is a lot of ramping up and getting to know the work and each other and fine-tuning of things in that first year of working together.

For them, I suggest reviewing their support plan internally every two to three months initially in that first year.

You want to make sure you are honoring the parameters you both agreed to and identifying any scope creep that you have not have taken in account and then adjusting accordingly at the next fee increase.

With established clients, you may decide that an annual support plan review is sufficient for your purposes.

6.

Keep clients informed upfront all along the way with plenty of notice.

Let new clients know that there may be a period of adjustment in the first months/year of working together and that you will be reviewing their support plan every so many weeks or months.

If there are areas that have been or need to be added on or increased (or been eliminated or significantly decreased, for that matter), let them know that the fee they pay may be affected.

And let established clients know that their support plans are reviewed regularly as well (e.g., annually or every six months).

The key is to inform all clients upfront that their support plans are reviewed at specific intervals and that there will be periodic fee increases as you deem necessary or appropriate

You want them to understand that what they pay is relative to the support areas and parameters you have agreed to, and as those change and evolve or increase, you will be examining them and adjusting pricing accordingly.

At a very basic level, all I can say is this: You know your clients. You know what you do for them. You know when you feel like you are doing more than what you are charging for. You know how they are benefiting from your work. And you know when it’s time for raise fees for the profitability of your business and in keeping with the value you are providing.

When you start to feel those nigglings, that is always the correct time to review and adjust.

Always be reviewing and evaluating internally, and then on whatever regular schedule that you determine, implement your fee increases.

For Example

Let’s say you like to go through your annual feedback process with clients around May or June when business generally tends to slow down somewhat for everyone and they have more time to reflect.

You could then time your annual fee increases for January.

Whenever you time these events, I suggest you always give clients 30-60 days’ notice of any support plan adjustments/fee increases.

This gets them used to the idea, gives them time to ask any questions they have, and ensures no one is surprised or caught off guard. That’s the only thing that would really create ill will.

By giving courteous notice, it’s only going to help you adjust things in the best way possible for both you and each of your clients.

The bottom-line: Never surprise clients with things coming out of left field.

Everyone appreciates a heads-up so they can plan and budget accordingly, and your fee increases will be far more well-received.

Dear Danielle: Client Wants Me to Cut My Fees By $200 a Month

Dear Danielle: Client Wants Me to Cut My Fees by $200 a Month

Dear Danielle:

I recently had a contract client who could no longer afford to pay me the regular contracted amount because of a slowdown in her business so she asked that I drop my price about $200 until she was back on her feet. How should I deal with that? She’s been my client for 3 years and she’s always paid on time and every penny. I agreed to the cut but not sure for how long. Any words of advice? —KP

It sounds like this is a good client with whom you’ve had a happy, healthy business relationship thus far.

It also sounds like this client is paying some sort of monthly fee, if I am surmising things correctly.

And there’s no reason to throw all that away.

BUT there’s also no reason why this client’s financial woes should be your problem. Especially since you aren’t sure how long it will continue.

There IS a compassionate, client-centric way you can offer to help this client out during what I assume is only a temporary predicament without sacrificing your own business needs and well-being.

And it starts with this handy phrase: You don’t get what you don’t pay for.

That’s obviously not very client-centric the way it’s phrased, but the solution in its meaning is, very simply, to take something off the table.

What that means is, if you are selling hours, take $200 worth of hours away from their retainer. Only work up to the number of hours they have paid for.

If they can only pay for 15 hours instead of the usual 20, then they should only get 15 hours of support, not 20.

Alternatively, if you are using my value-based pricing methodology (which is a faster, more effective way to make an impact and give clients more readily apparent, targeted results), take a $200 task/function/role away from the monthly support plan.

Have a conversation with the client, identify what the most important functions are to their operations during this financial lean-time, and then offer to remove/temporarily suspend a $200 value task/function/role that is least necessary and will have the least impact on their continued smooth functioning and profits.

Give them two or three options of what could be removed for $200 less a month, and let them decide which one to sacrifice.

It’s also possible during this discussion that the client realizes even more the value of what you do for their business and decides to find the money to keep paying your full fee for full services to continue.

If this were me, I would also be curious about the reasons for this client’s financial down-turn.

If they were open to sharing, it’s possible I would have some ideas and insights on what we could do and where we could focus our work to create some new/fresh revenue.

Perhaps you even saw this coming, but the client had previously been resistant to exploring your ideas, trying something new, or doing things a little differently than they were used to that might have helped them improve financially. They might now be a bit more receptive to hearing you out.

I would, however, certainly expect to be paid for any additional work/consulting I provided. It’s up to them to decide where their priorities are.

No reasonable client would expect you to work for free.

And despite any client’s best (or unrealistic) intentions, they don’t have a crystal ball no matter what grand promises they make.

So the best policy is to go about things in a way that serves your business interests.

Keep in mind that you have an obligation to safeguard your financial well-being and business profitability not only for yourself, but for your other clients as well.

It doesn’t serve them for you to be giving away time, energy, and work for free to someone who isn’t paying fully for it.

And don’t even think about letting this client pay on credit (a la “I will gladly pay you tomorrow for a hamburger today”).

You won’t be doing them, yourself, or your other clients any favors by letting them go into debt to you.

If they are already in financial straights, owing you or anybody else more money is only going to bury them further.

Remember, you teach people how to treat, value, and respect you.

Lower your fee for this client if you want to help and keep them on your roster; just make sure you also take away an equal amount of work from what you provide them with.

And have another conversation with this client to reset the expectations around what they will and won’t get for the reduced monthly fee.

I also suggest giving the client a definite time limit on this special arrangement.

Give it a month or two and inform the client that you will need to review and discuss things again at that time to determine whether or not it’s still feasible/profitable/in your business interests to continue the arrangement.

If there’s no improvement in sight, you may even decide that, while you wish this client well, keeping them on your roster is no longer profitable for you.

If any of this is helpful, one way you could return the favor is by letting me know in the comments. I would truly value that.

And if you or anyone else has more questions on this, please feel free to ask in the comments, and I’ll be happy to continue the conversation and share my further insights and advice.

Paypal Instant Transfer Is Here

Paypal Instant Transfer Is Here!

YAY! I am so excited about instant transfer on Paypal, I can’t even TELL you!

If you use a regular Paypal personal account, you should see the instant transfer option in your Wallet. The standard one-day transfer is still free, but if you’d like to transfer and have your funds available more immediately, you now have that option for a very nominal $0.25 fee.

They have already started the roll-out so if you don’t see it in your account now, you should very soon.

If you have a Paypal Business account (like I do), though, it may appear that you don’t have the instant transfer capability. You do, but there’s a little bit of a work-around to go through.

That’s because the instant transfer was mainly built for consumers, not business.

To make this easier for you, here are the steps for making an instant transfer if you have a Paypal business account:

  1. Go to your Paypal account and add your bank debit card (if you don’t already have it in there).
  2. Download the Paypal consumer app to your smartphone (if you don’t already have it there). The regular consumer app will say simply “Paypal.” If you have downloaded the app that comes up as “Paypal Business,” that’s the wrong one.
  3. Open the app. Go to the balance page. Click on “Manage Balance.”
  4. In the lower right, you should see an option for “Transfer to Bank.” Click on that.
  5. On the page that opens, type in the amount you want to transfer. NOTE: Paypal will deduct the $0.25 fee from any amount you transfer so if you want an even number, be sure to add in the fee. Example: If you want to transfer $1.00, make the transfer amount $1.25.
  6. Once you’ve entered the transfer amount, click “Done” and then “Next” on the page after that. This will bring up the page to choose where you want to transfer the money to. In the event that you already have your bank account linked to your Paypal account, you will see it listed here. DO NOT choose your bank account. That’s because if you have a Paypal Business account, you can’t do instant transfers to bank accounts. Let me rephrase that: You can transfer to your bank account, but it will take the regular 1-day processing time (which is free). The work-around is that if you want to do an instant transfer from a Paypal business account, it has to go to your bank account’s debit card. So, next to your bank account, you should see an option to “Choose.” Click on that and then scroll right on the images until you see your bank debit card listed. That is the one you want to choose if you want an instant transfer. Select that and away you go!

When I did my first test transfer of $1.25 and it took mere seconds for it to show up in my bank account.

I then transferred a larger, more significant amount, and it also showed up in my online bank account nearly instantly. So it’s very fast!!!!

I also confirmed that you can do as many transfers in a day as you like (no limits). The dollar limit per transfer (or maybe it’s per day?) is $10,000.

It used to take 3-4 days for my transfers to go through, which meant I didn’t have access to those funds until the process was fully completed, which is inconvenient.

If I wanted my money sooner and needed it in an account from where I could (for example) make payments to my credit cards, I would have to make a special trip to withdraw the funds I needed, then go to the bank and make a deposit.

What a waste of time and gas. (Not to mention the nuisance ATM fees we’re often charged, grrrr!)

This is going to add so much more ease and convenience and speed to our banking and accounting processes!

Be sure and let your clients know also as many of them use Paypal, too. This may open up additional options and convenience for them in billing their clients and moving funds around more quickly.

Have you tried Paypal instant transfer out yet? Are you excited to try it out? What do you think?

Something for Nothing

This kind of thing makes me cringe…

I popped into LinkedIn today and immediately came across a colleague’s post where she was sharing some client praise. Her client wrote:

“I’ve had 10 times more response from your social media design than I have from the one a graphic designer did for me and charged me 3 x the price.”

From the apparent value this client got, this colleague should have charged 3 x what she did. 😉

This is what I mean about people using our industry as cheap substitutes.

It’s so insulting for clients to rave about how little they paid, particularly when they know good and well what properly professional fees cost.

What this client said was the equivalent of shouting to everyone:

Hey, everybody, we’ve got a sucker over here! She practically gave away something that’s making me money and growing my business that I would have paid anyone else 3 times more for.

I have no doubt this colleague will eventually realize the value of her talents and start charging a more commensurate rate for the value that clients receive from her work… particularly if she keeps hearing “praise” like this.

With devaluing clients like that, who needs to earn a living from their work? 😉

Accepting Electronic Payments with Viewpost

Last year, Intuit discontinued its Intuit Payment Network (IPN), which was a convenient way to collect payments from clients inexpensively (only 50 cents per transaction).

Plus, even though it was a great option for receiving payment electronically from clients, there were some minimum financial benchmarks to meet in order to qualify for the service so it didn’t work for everyone.

Paypal is a handy, extremely easy-to-use backup and while any fees you pay are a business write-off (so I don’t sweat them), it still would be nice to have another IPN alternative.

So I was definitely interested when I received an email from my bank about a third party service called Viewpost.

I haven’t used it yet, but I have signed up, which was very easy to do. Here’s what I can tell you so far:

  1. It works with any bank in the U.S.
  2. There are no minimum financial qualifications or balances to meet to sign up and use the service.
  3. You can invoice anyone for free using the ViewPost invoice service. (Aside: I prefer my own custom, fully branded business invoices inside Quickbooks so I won’t be using this feature. I consider invoicing both an accounting and marketing function, and I’m VERY particular about how all of that is done and looks. While you can upload your own logo in Viewpost, their invoicing isn’t very sophisticated or customizable beyond that so it’s a no-go for me. However, I was informed that the service is compatible with Quickbooks if you like to automate the bookkeeping portion of it.)
  4. Clients can pay with bank account or credit card (all my clients prefer credit card because their payments to me earn them a significant amount of travel miles, hotel and cashback rewards). During the sign-up process in Viewpost, you’ll also have the option to sign up with Stripe which is the service that will give you the additional functionality of accepting credit card payments. If you sign up for Viewpost only, payment will only be bank account to bank account.
  5. You are not charged for any payments you receive through the service.
  6. For clients to pay you through the service, they will also need to set up an account. However, this is a one-time process and they can then use that account with other vendors as well as for themselves and their own clients if they so choose.

CAVEAT: While you pay no fees for any payments submitted to you, the client is charged 50 cents per transaction. Of course, 50 cents in the scheme of things is nothing; however, on principle, I don’t feel my clients should be charged any kind of fee to pay me. This is a pretty important standard to me so I don’t like this part whatsoever. I would prefer to be the one paying the 50 cents as I feel any fees charged are my business cost to bear. I consider my practice to be an upscale service and would never dream of charging or passing on chintzy fees like that to clients. I’m sure there’s some work-around I can figure out (e.g., reducing my invoice by 50 cents perhaps), though, knowing my clients, they aren’t going to care about paying an extra 50 cents. (But I care!)

All said and done, it’s still worth trying out as it would be nice to keep more of my own well-earned payments myself.

Check them out here: Viewpost

And their pricing page: Viewpost Pricing Info

Better yet, ask your bank if they already partner with Viewpost and ask for their special link/sign-up page as there might be some special advantage to doing that. I received my invite via my bank and there is a special $25 Amazon gift card sign-up bonus right now.

Have you used Viewpost before? What was your experience with it? Any other Viewpost info or tips you can share with us?

Do you know of a similar service that only charges 50 cents per payment transaction?

Let us know!

UPDATE 2/22/17:

Well, this has turned out to be a bit of a no-go for me. It occurred to me to ask about accepting credit card payments. I have most of my clients on auto-pay (where they sign an agreement and I process their payments to me automatically each month), and most of them prefer paying by credit card because they want the airline/travel/hotel/cashback points and rewards. I was informed that you can only accept credit card payments by using Stripe (which the Viewpost sign-up process has you sign up for as well) and their regular merchant account processing fees  (I think they said it was roughly 2.9%). I was also told that it would take anywhere from 2 – 7 days for those payments to actual process and be available to me. And while the bank-to-bank account payments through Viewpost, even though they would only cost 50 cents to the client who is paying, those would also not resolve for 2 days and could take as long as 10 days to finalize.

So that was all a deal breaker for me. Why would I switch to a new system that creates more work and rigamarole (for me and my clients) and no cost savings when I can already have a system in place with the ease and convenience of instant payment with Paypal? Sure, I might pay the same fees to PayPal, but you’re going to pay the same (or more) to any merchant account service and the ease and convenience and instant availability of my funds is worth it to me. Plus, any fees you pay are a business write-off so I’m not worried about them. They help reduce my taxes.

Still, as with anything, there’s always a positive side. Now I know more about this particular service and even though it’s not right for me and my clients currently, there still might be some odd occasion where it can be handy, either for me or for one of my clients.

Dear Danielle: What Are Your Thoughts About this Deadbeat Client?

Dear Danielle: What Are Your Thoughts About this Deadbeat Client?

Dear Danielle:

I recently experienced every startup business owner’s nightmare. One of my clients (a fast talker) was extremely upset because I had to resort to threats of involving my business attorney. It is absolutely outlined and spelled out in all of my contracts. He went off on me, tried to avoid payment, but I did not back down. He refused and did not pay the late fees that are also outlined in my contract as well, then had the audacity to tell me, “I’ve been in business for 35 years and never seen such aggressive payment policies.” I reminded him how I bent all my rules for him from the start in order to accommodate his needs, drastically lowered my pay, and okayed him to pay upon invoice vs. upfront for projects. After he found that I was not going to back down and accept the loss, the funds miraculously appeared in my account. However, he did not pay the late fees he had incurred. He is someone I will always run into as we are associated with the same Chamber. Not only did he insult me countless times, but he left some very rude messages. I stayed calm the entire time and continually reminded him of the contract we had gone over together and signed, and how with any business, his included, no one will render services without payment. My attorney advised me to take the loss for the fees because he eventually paid and to let it go, especially considering how low the amount was from start. Needless to say, after a long disturbing message from client, he says, “We will no longer do business. Don’t call us anymore.” I laughed thinking, he can’t be serious? Surely, he couldn’t have thought there would be any more services after that. Ultimately, I thought about it; he knew I had just begun. What he didn’t know is that I have many years of experience behind me. Just because a business is up and coming, that doesn’t mean you’re illiterate as to how business should flow. I am now considering that he may taint my good name with lies to cover what he has done. What are your thoughts? —Chaunte’

I’m guessing while you are justifiably upset, you may also be feeling a bit beat up and second-guessing yourself, wondering if you were out-of-line in any way.

I don’t know the backstory here so I’m not entirely sure what happened, but if you did work he engaged you to do, you are certainly entitled to be paid.

That said, I call these first clients (the ones we take on when we’re new and not entirely sure what we’re doing just yet) “practice” clients.

We learn a lot from these initial clients, particularly what we don’t want in our businesses, who we want to avoid working with in the future (i.e., un-ideal clients), and what red flags to look for and be conscious of going forward.

We also have to cut ourselves a little slack when we’re new, forgive our missteps and possible clumsiness.

The good news is that we can learn from these experiences, gain clarity about how to do things differently next time, tweak and adjust our processes and infrastructure accordingly, and improve our finesse.

Since you asked for thoughts, I’ll share a few in no particular order in the hope that you find some useful ideas…

  1. The first thing I keyed in on was your characterization of this client as being “a fast talker.” This seems like the first red flag to appear that you recognized, and yet you took him on anyway. It would be worthwhile to do a bit of soul-searching and ask yourself why? If it was clear to you that this client was a bit of a “Slick Willy,” what made you ignore that red flag and not trust your first instincts? Will you ignore your intuition the next time this kind of client approaches you? Is this the kind of client you really want to be working with? If not, what will you do differently next time?
  2. The other related thing that stood out was your mention of how you bent over backwards for this client, gave him discounts and breaks you normally wouldn’t, and stepped over your own policies and self-interests. Why? Because no good ever comes from this; all it does is teach clients how to treat us poorly and take us for granted. So it would be good to ponder and examine what might be going on here. What I see that often happens is when we are new (and I had a very similar problem when I was new in business myself), and we don’t yet have a firm frame of reference of our value, we tend to overcompensate. We don’t think what we offer is enough; we think we need to “prove” ourselves. In fact, this is the worst thing we can indulge in when we’re new because the worst kind of clients smell that neediness and desperation like blood in the water. A lot of this clears up as we gain experience in business and working with clients. But often a person can go out of business before they can gain the insights, professional self-esteem and confidence to overcome these debilitating tendencies. This is why I always tell people that they can’t afford to work with crappy clients, not for any amount of money — they’re business killers. They can destroy a person’s morale and confidence in the blink of an eye.
  3. This does not sound like a joyful experience whatsoever. If you have clients you have to threaten with attorneys and legal action, there is something very wrong. Sure, you might be in the right, but do you really want a life and business working with people who are not honorable, that you can’t trust, who disrespect you with nonpayment? I’m guessing not. So, one important step to avoid this in your business moving forward is to start two lists: one for all the traits and characteristics of your ideal client and one for all the traits and characteristics of your UN-ideal client. Continue to add to these lists with every new client experience throughout the life of your business. It will be a constant work in progress; the point is that it is one of the very best exercises in getting clear about who you do and don’t want as clients so that you heed red flags and trust your gut in the future. As you consult with new clients, keep those lists handy. They’ll remind you whenever you’re tempted to step over your own standards about who you do and don’t want to work with (and more importantly, why).
  4. Yes, it’s good to have proper contracts with legal language that spells out what the recourse and late fees will be if a client doesn’t pay. At the same time, this should always be a very last resort for the very worst case scenarios. The best course is to avoid working with crappy clients in the first place. The better, more productive, focus is not to underscore every legal point to hammer clients over the head with them, but to improve the ways in which you get clients and how they are educated all along the way. This is why we have a website and steer clients there first so it can pre-educate them and set the proper context. It’s why we have a specific consultation process to further instill proper mindsets and education, as well as determine fit, before we take on clients. It’s why we need to get clear about the business we intend to be in (e.g., do you want to be in the project business where everything is a transaction, or in the business of ongoing administrative support where there is a more personal relationship and where you can charge an upfront retainer?). It’s why we are discerning about the clients we take on and go through specific, intentional steps in onboarding new clients (e.g., having a Client Guide and conducting a new client orientation with new administrative support clients). It’s why we get clear about our own standards, values and goals and what is important to us in our businesses — so that we can establish the policies, procedures and protocols that support them.
  5. I agree with your attorney. Even though you may be entitled to them, forget about the late fees. It sounds like you got the principle amount. This client is not worth allowing him to suck any more of your precious attention. To continue to let it take up space in your mind is giving energy to the wrong thing, to your detriment. For your own sake, forget about this client and move on.
  6. Deadbeat clients can happen to the best of us, particularly when we’re new. At the same time, clients often don’t pay because they aren’t happy with something. Did he give any reasons for why he wasn’t paying? Did you ask him? A lot of times some honest dialogue and meaningful probing can unearth what the real problem is. Barring a client just being a jerk and thinking he can take advantage (which it sounds like this client was), it’s very useful to us to forget about being in the right and make a sincere attempt to see things from the other person’s perspective when an issue crops up (which it can even in the best client relationships). The insight and feedback we can gain is like gold to our businesses — as long as we make good use of it.  So don’t shy away from direct, honest, respectful dialogue with clients. Don’t be afraid to ask — and hear — what could I do differently? What would make this better for you? You can use it to figure out where your blindspots might be and improve your systems and processes (for them and for you).
  7. One way to avoid deadbeat or otherwise un-ideal clients is to have a website. I noticed you don’t have one yet. While I get that people often want to take on clients before they have a website in place to start making money right away (and there is no shortage of morons out there telling people they don’t need a website to start their business), I would argue that this is a mistake. It is not to your benefit in any way for you to be doing business without a website. In so many ways, your website IS the business. Your website isn’t just a way to market what you have to offer. Its other value to you is that it provides a tool with which you can properly educate clients and set and manage their expectations and mindsets before you ever start working together. This is what will get you more consults with more (and better) clients.  To take on clients without the benefit of a website where you can send them to get informed about how things work in your business, what business you are actually in, who you are looking to work with (and who you’re not), etc., is like charging into battle without a gun. Your website can help you prequalify and attract more of your ideal clients, educate them in the way you need them to be so they enter the relationship with the right expectations and mindsets and understandings (and respect!), and weed out those who are not a good fit for you so your time is not wasted.
  8. It’s important to note that this was a project client, not a retained client where you were providing an ongoing relationship of administrative support. These are two completely different business models. It’s worth getting clear and intentional about which kind of business you want to have because the kind of clients you get, the way you work together, how you get them, how you make your money, and the processes you go through with each are very, very different from each other.
  9. Another way to get more intentional about the business you consciously choose to be in and the kind of clients you want to work with is to choose a target market. A target market is simply a field/industry/profession that you cater your administrative support to (like attorneys or financial advisors or coaches or speakers, etc., etc.). The benefit is that when you know specifically who you’re focusing on, you can get clear (more quickly and easily) about how to craft your solutions, how to market them, and where to find and get clients more quickly and easily. When you have a target market, you don’t have to take on projects with any ol’ client for not enough money. It helps you get more of your ideal clients and provide more ideal solutions designed specifically for them (which allows you to command higher fees).
  10. We always get a do-over. Each and every day is a new chance to learn, improve, do differently and grow.

***

What about you? Have you ever found yourself in a similar situation? How did you resolve it and what did you change moving forward?Save

Why Should I Pay that When I Can Get a Temp or Offshore VA for $5 Bucks an Hour?

Ever hear a client utter these words?

It’s probably the most grating sentence in our industry today.

But what if you knew exactly how to respond?

What if you offered your services in a way that didn’t focus whatsoever on hourly rates?

Wouldn’t that be a total game changer?

It’s not so annoying when you actually begin to love responding to that question (or when you no longer get it in the first place). ;)

…If you frequently encounter price resistance with clients and want to know what to do about it;

…If you have trouble getting clients to commit;

…If you struggle with articulating your value to clients, talking about your fees, and feeling confident about them;

…If you find the whole topic of pricing difficult, I have the solution!

It’s my value-priced packaging and pricing guide, How to Price and Package Your Support Based on Hours & Expertise — NOT Selling Hours

Value-Based Pricing & Packaging Guide: How to Price and Package Your Support Based on Value and Expertise—NOT Selling Hours (GDE39)

This guide will show you how to:

  • Attract more clients, more easily;
  • Make more money;
  • Create an easier business to run;
  • And toss out those time sheets forever!

…all without discounting, bargaining, or justifying your fees whatsoever!

Dear Danielle: Do You Use PayPal?

Dear Danielle: Do You Use PayPal?

This was a question posted in my private Facebook community last November. With Intuit Payment Network (IPN) ending next month, it seems like a good time to revisit the topic.

Dear Danielle:

Do you use PayPal for invoicing and payments in your business? Do you recommend them? —GB

Yes, I use PayPal as a payment processor, but I invoice clients with my customized invoice in Quickbooks Pro (which is the comprehensive software program where I do all of my bookkeeping).

I’ve been using PayPal since 2000 and have never had a single problem. It’s super easy to use, integrates quickly and easily with web coding, and it’s established and trusted.

A merchant account is an alternative to PayPal, but I’ve always found them more complicated to use, and not necessarily any cheaper, and in my experience, you don’t get the same level of tech support that PayPal provides.

Personally, I could never be bothered with using them, and when I was still in the web design business way back when, I hated trying to integrate their coding onto websites. So convoluted and difficult and they don’t necessarily care about providing more than a superficial level of support.

Maybe that’s changed. And of course, I have  programmer now that I let handle that kind of work when it comes up.

The other payment processor I use is IPN which is Intuit Payment Network:https://ipn.intuit.com/.

IPN only charges $0.50 per transaction, which is far less of a fee than others including PayPal charge (although personally, I never sweat those kind of fees, they are pennies in comparison AND they are tax deductible business expense that you get to write off at the end of the year which lowers your tax experience).

The only caveats with IPN are:

1) If you are billing a client over $1,500 on an invoice, they will need to be on IPN as well (you can bill guests up to $1,500 though).

2) You need a checking account with unlimited withdrawals and deposit; and

3) To get approved you will need from 3 – 6 months of consecutive bank statements showing an ongoing minimum balance, the amount of which depends on what you expect to bill out via IPN each month. So, for example, let’s say you will be billing $2,500 a month via IPN. To get approved for an IPN account, you will need to keep a minimum balance of at least $5,000 in that checking account for 3-6 months. The minimum balance they’re looking for all depends on the amount you intend to bill and they have different tiers that you’d have to call them directly to find out what your amount would be specifically. But once you get approved, you don’t have to keep that minimum balance anymore because they don’t monitor your bank account.

UPDATE: Intuit is discontinuintg their popular IPN (Intuit Payment Network) come April 2016. The company is encouraging users to move over to their Quickbooks-integrated merchant account product, Quickbooks Payments. There are two plans to choose from to fit your business, and you can also get mobile credit card processing if that’s of interest to you.

Personally, I probably won’t be switching over as PayPal meets all my needs. It’s easy, I trust it, and the costs are comparable.

Rant: I Have Never Seen Bigger Crybabies

RANT: I Have Never Seen Bigger Crybabies

Rant warning here. This has been brewing for a couple months now, and I just have to get it out of my system, lol.

There is this crybaby series of articles that Freelancers Union puts out that have been driving me a bit nuts.

Every ezine issue, they feature some sob story from a freelancer about how a mean, evil client stiffed them hundreds or thousands of dollars.

Omg, I’ve never seen a bigger bunch of professional victims.

And now they’ve got this ridiculous “Freelancing Isn’t Free” campaign to get some new laws on the books to protect freelancers from deadbeat clients, as if they themselves play no role in why they aren’t getting paid.

The one thing, the ONE SINGLE PROBLEM at the root of all of this is that these people can’t seem to grasp or get it through their thick skulls that as freelancers they are in business for themselves.

And business owners decide how things work in their relationships with clients. Business owners choose who they work with and who they don’t. Business owners determine what they are paid, when they are paid and how they are paid.

Business owners can either run their business like a business, or they can be morons. The choice is theirs.

What contributes to this mindset of idiocy and victimhood is the word “freelancer.” That word needs to be abolished.

In society at large, people don’t understand that freelancer is merely another word for business owner.

It doesn’t matter if you have a day job and do a little work on the side. When you are doing that side work, you are being in business for yourself and wearing the hat of business owner. There is no in-between classification. It’s either/or. One or the other. That’s it.

So when you’re working your day job, you’re wearing your employee hat and all the rules, laws and taxes that apply to employment are in play.

And when you work for yourself and hire yourself out to people, you are wearing the hat of business owner. Doesn’t matter if it’s part-time, full-time or just a little here and there; doesn’t matter if you use the term freelancer, independent contractor, self-employed or whatever—these are all terms for the same thing: BUSINESS OPERATOR.

The sooner you get that through your head, the better off you will be because THEN you can start running your business like a business the way you should be.

Let Me Demonstrate

There are some common themes running through all of these stories. Here’s an example from the most recent victim article. This “freelancer” says:

“In 2015, I agreed to do some editorial work for a client. The agreement was verbal and, because I trusted her to some extent, we did not have a contract. Shortly after I completed the agreed-upon work, she slightly altered the work I produced, claimed everything as her own intellectual property, and failed to pay the $500 she owes me.”

Her first mistake was not formalizing the agreement in writing with a proper business contract. Whose mistake is that? It’s not the client’s job to do that, it’s hers. And she made the choice not to use one.

While a verbal agreement is still a legally binding agreement, it does make it more difficult should you have to take things to court. So, when you are a freelancer, you are in business, and that means conducting business properly and using proper legal business contracts — upfront, every time, with every client, no ifs ands or buts.

The other problem here is that this freelancer’s client seems to assume that their business arrangement was a work-for-hire one.

This is another reason you always, always use a proper business contract. It’s why I always rail against work-for-hire agreements as well, which is different from a business contract.

When you blindly and ignorantly enter into a work-for-hire agreement you can be giving away all your intellectual property, which you may or may not have bargained for.

The work you do and the ownership of a creative work are two separate legal values. This is why they are stipulated and charged for separately. And ownership of a work cannot be given away without express legal written permission.

If you don’t know what you are doing, are using the wrong kind of contract, or haven’t had an attorney draft or approve your business contacts, you could be signing away all rights to the creative works and proprietary intellectual property that you created!

Because of these critical distinctions in the law, it’s imperative as a business owner for you to get yourself some basic intellectual property education.

For example, let’s say as a business, I have a client with a particular need. I end up developing a tool for that need that ends up being useful for any number of my current and future clients. I realize that I could license use of this tool to others and add a lucrative additional revenue stream for myself, and decide to put it out to market.

However, if I entered into a work-for-hire agreement with a client, that tool could actually be owned by them automatically. Meaning, they could be free to sell it or do anything they want with it, including telling you that you may not sell it or use it with anyone else, and that it belongs to them because you were in a work-for-hire agreement and anything you create in the course of working with them belongs to them.

How would that sit with you?

As a business, I am damn sure not going to hand over ownership of my creative works, inventions and intellectual property or proprietary processes lock, stock and barrel. That would mean I couldn’t continue to profit from them, use them with others, or in any other way adapt them for other uses.

Even if I was a mind to do that, I wouldn’t be giving away that ownership for free. Oh, hell no!

But there would be nothing you could do because you were the fool who entered into a work-for-hire agreement instead of a proper business contract and didn’t set the terms properly.

This is why it’s so important to NEVER blindly enter into any blanket work-for-hire agreement, or ANY kind of work-for-hire agreement in my opinion, and to use proper business-to-business legal contracts that contain the proper languaging and terms when it comes defining the relationship and who owns intellectual property.

Here’s another excerpt:

“Although $500 may not sound like much, I’ve put together many small deals for less than a thousand dollars. If all my clients were to behave this way, my life would be a constant nightmare of living in fear of being shortchanged. Though it may seem disadvantageous to go through the stress of chasing down a couple hundred dollars, that couple hundred dollars could cover my electricity bill, or even groceries for a couple weeks.”

Wahwahwah. Then don’t do things that way. You act like you were prevented from doing things any other way.

Wrong. You made a choice.

On top of running your business like a business and using proper business contracts, upfront, every time, as a business you also have the CHOICE about who you work with.

Vet your clients properly. Put them through a consultation process so you have at least some idea of who you are doing business with and what they may or may not be like. You get to screen and prequalify clients as a business owner.

A proper consultation can help alert you to red flags that indicate someone may not be worth working with.

Stop rushing or bypassing these vital and important business protocols which also, by the way, help clients understand the CORRECT nature of the relationship and give it proper professional respect. These steps play a big role in setting the stage to make sure you get paid, in full and on time, every time. HUGE!

Likewise, who says you have to wait until work is done to be paid? You can charge the full fee upfront if that’s what you want to do. It’s a perfectly usual, legal, established standard business practice and option.

You can also split a project into phases with the payment for each phase due upfront before beginning work on any next phase. Or, you can charge a deposit or a percentage upfront.

Mitigate your losses if you are taking a chance on a client you don’t know and have never worked with before by getting some kind of payment upfront. Likewise, they’re going to take the business more seriously when they have skin in the game.

There Don’t Need to Be Any New Laws

There are already laws on the books to protect you in these matters and you’ve always had the choice to avail yourself of those recourses.

The problem is being a business moron and not conducting business according to how business is conducted.

It’s that YOU don’t understand that as a freelancer you are a business, and that YOU define these things in your contract that you should have been requiring clients to sign upfront.

You’re not a temp, you’re not a “contract worker.” (Tip: A contract worker is an employee, not an independent self-employed business owner.)

Stop letting clients tell you how things work in your business.

And stop accepting “positions” with companies that should be paying you like an employee but instead are stealing from you by illegally classifying you as an independent contractor. (Hint: Business owners don’t work in positions; that’s an EMPLOYEE.)

If that’s what they are doing, turn their asses in to the IRS and your state Department of Revenue and Employment Security Department.

Because if you really are an employee (which is determined according to the federal laws that define these two distinctions and which employers don’t get to just decide arbitrarily), then they are stealing from you your rightful wages and employer-paid share of taxes and benefits.

By not understanding these distinctions, by not educating yourself, by willfully disregarding these things, YOU are equally guilty of perpetuating the problem of deadbeat clients.

Stop being a bunch of wishy-washy, crybaby pushovers who whine about being victimized all the time. You have the power and the choice to do things differently!

Sure deadbeat clients are shitty people; there’s a special place in hell for them. But guess what? You allowed them to treat you that way by all the choices you made.

No one can take advantage of you without your permission. Stop acting like a victim and like you had nothing to do with it, and start running your business like a business.

Take responsibility for the choices YOU made to not run your business like a business, rushing processes, not conducting proper consultations and due diligence, choosing crappy clients, not using contracts, and not getting at least some money upfront. It’s really simple.

Until you take responsibility for that, nothing in your business and life will change.

And listen, I don’t mean to be picking on anyone personally.

It’s one thing to be new in business and learning the ropes and making newbie mistakes. There’s a learning curve. We’ve ALL been there.

Beyond that, though, there is just too much information out there any direction you look to remain ignorant long. These aren’t people who are new making these dumb choices; these are people who knew better and what they should have done and chose not to do it.

I’m equally annoyed with organizations like Freelancers Union that don’t do their job as a professional organization which should be to properly educate their members and the marketplace, so the stupidity continues.

Because 99% of these problems wouldn’t exist if these people understood how business works, how it is properly conducted between two businesses, and that as freelancers they are business owners (not “contract workers” or employees).

I’m sick to death of all these whiny articles collectively because they don’t empower anyone, they just keep them acting like victims who blame others for their problems and many of whom are going to keep doing the same bone-headed things over and over.

Want More Dissections?

Here’s another example:

“Because I knew and trust my contact in NYC, I went ahead and started work without a contract, though I did send my salary requirements and scope of work via email for their records. I was told the contract was in the works.”

Same ol’ song and dance. You don’t do business without a contract and you don’t start work until that contract is signed and everything is agreed upon.

The other problem here is this freelancer uses the phrase “salary requirements.” Um, business owners – which again, is what freelancers are — are not paid a salary. EMPLOYEES are paid a salary. Someone who is in business for themselves charges a fee or rate and tells the client what, how and when they are required to pay, not the other way around.

And another:

“I proceeded to organize vendors, source supplies, find caterers, etc. There was some drama around whether to have the launch party in the office or at a venue nearby. They changed their minds about 6 or 7 times. The indecisiveness was alarming, but I rolled with it and did my work. The entire time I kept asking for the contract.”

You should haven’t kept asking. You should have stopped working and told them that the contract was required before any work was to begin or continue. Period.

This also hints that there was either no consultation conducted or it was a sloppy, not very thorough one. Otherwise, you could have established all the specifications about how the work and decisions were going to be made, who the ONE contact person was that you would be dealing with, etc., and avoided all their internal drama. There is no reason you needed to be part of that.

Moreover:

“Finally, the week of September 21, the majority of the folks from Europe came to town. I had a few meetings and eventually received the contract. The rate was correct, but the terms and conditions were way out of line. I wasn’t about to agree to a six-month non-compete and 90-day payment terms. It just didn’t make sense for the scope of my work! So I redlined the contract and sent it back.”

So let me get this straight, you let them write your contract for you? Ridiculous!

You’re the business owner; your contract is YOUR job. You don’t abdicate that responsibility to clients. Your business requires YOU to set the terms. Clients have only to agree and sign or suggest changes. Or you don’t do business together, simple as that.

Instead, you let the client treat you as if they were your employer and it was their role to call the shots here. WRONG. And stupid. NOTHING should have moved forward until the terms were finalized and YOUR contract signed by the client.

And:

“At this point, I was told that I was only hired for the month of September and not October. They hired an office manager and I was to give her a download on everything I had set up, which I did without complaint. I was now a week out of the job and still hadn’t received payment. When I followed up, I was told there was an issue with my invoice and that the company wanted a work log. I had never been asked to submit my hourly tasks and my rate was a day rate. Furthermore, I had clearly stated overtime fee after an 8-hour day.”

This person clearly doesn’t understand that she is not an employee. She uses employment terminology, lets the client operate as if they were her employer and isn’t understanding how she herself is allowing the lines of employment and business to be blurred.

You aren’t “hired” by clients, you are “engaged” by them. And you don’t get “overtime” as a business owner. Overtime is something employees are entitled to, not business owners.

Instead, business owners stipulate IN THE TERMS OF THEIR BUSINESS CONTRACT BETWEEN THEMSELVES AND THE CLIENT when late, rush or after-hours fees and charges will be incurred.

If you don’t want to be in business for yourself, and you are working with a client as if you are an employee, then you ARE an employee, and they legally need to be putting you on payroll and adhering to employment laws.

On the other hand, if you do want to be in business (which you are, automatically, if you work for yourself at any time), then you have to run your business like a business. There just isn’t any way around this.

But here again, this is yet another freelancer who doesn’t understand that they are a business owner and is letting a client operate with the mentality that they are some kind of employer and dictating things to her, which they have absolutely no legal right to do. She abdicated her own business responsibilities and now that she’s having problems with them is her own damn fault.

I know YOU are going to be smarter in your business, right?

PS: If you want to save yourself these problems and learn how to conduct business properly, be sure to also read my article How to Avoid Getting Stiffed on Payment