Getting Paid in your service-based small business.
Many small business owners dive into their service-based business full of passion and drive; with skills that are sought after, and with a highly marketable offering. They know who their ideal client is; demand for their offerings exists, and digital marketing strategies are in place.
These small business owners can see rainbows, and the future is bright.
This is all great – these business owners may be living their life’s purpose - and to that, I say ‘bravo!’.
But let’s be honest, love and passion are not enough for a small business to thrive. Any business, small or otherwise, relies on cash flow as the corner-stone. Without it, no amount of passion, skill, and drive will result in a viable – let alone profitable – business.
That’s where I come in!
Getting paid in a service-based business doesn’t need to be hard. It doesn’t need to be daunting or overwhelming either. With a little bit of planning, proper implementation of systems and processes, viola! – your business is getting paid with ease!
So how does this little bit of magic work? Like this:
Be sure to have properly tailored Business Terms & Conditions for your service-based business. These can also be referred to as a Service Agreement. Coaching Agreement, Design Agreement, etc (you get the idea – what you call your Business Ts & Cs depends on the nature of your business).
Your Business Ts & Cs, when prepared properly, will set out the vital details around what services you will be providing; the fees associated with these (including deposits, progress payments, payment plans, etc); payment terms; payment methods; dispute resolution procedures; and they will give you the right to cease providing services if payments are outstanding.
2. Set up your internal processes and systems that deal with:
Issuing your proposal/fee structure/quote;
Issue your Business Ts & Cs (critical step here!);
Diarise dates for invoicing for an initial deposit/progress-payments, final invoices, etc (also critical!);
Diarise due dates for invoices so you know when payments are late (and you can cease work if this happens);
Set up automatic reminders in your accounting software (such as Xero and MYOB);
Closing the work or project at the finalisation stage.
3. Have a strategy for dealing with client complaints or issues.
You may think you will leave this and deal with an issue if and when it arises. But trust me, you are much better served if you have thought about this in advance, without the pressure of a client complaint hanging over your head, to work out the best way to address these things!
In my experience, a well-considered approach to client complaints or issues places business owners in a far better position to deal with these swiftly and effectively, largely because you have developed your framework without pressure and emotion.
My top tip here? Communication. Understanding the real issue with an unhappy client means you know what you are dealing with and you are in a better position to address it, and (hopefully) resolve it reasonably quickly. Assuming you know what the client means, or feels, or wants (rather than being sure) can be a recipe for disaster – and a long and protracted process in working things out with your client.
If you take the time to invest in getting your Business Terms & Conditions properly tailored for your business; set up your internal systems and processes that all the necessary steps are covered; and have a plan in place to deal with client complaints or issues, you are well on your way to a smooth process of getting paid, and keeping that cash flow coming!
The end result? Real peace of mind in your business – and that’s what I’m talking about!
Ps – if any of this strikes a chord with you and you would like to chat some more, you can jump over here and book in for a free 20-minute chat. Let’s get this sorted for you!