Many entrepreneurs start their small business because they are specialists and experts in a certain service industry. From efficiency consultants to wedding coordinators and software programmers, these are all specialty service niches that require an entrepreneur to share his or her expertise with a client.
Unfortunately, oftentimes entrepreneurs get short-changed when it comes to payment. It may be that more hours were necessary to finish a project, but at a set price, the service provider gets less money per hour. Or a freelancer completes a valuable service, only to have a client fail to pay.
What can you do to ensure that you get what you are owed for your services? Here are three important tips:
Make Clients Sign A Contract for Each Job
A contract is a legal and binding agreement between two or more parties. The terms of the service you are providing should be spelled out completely, as should be the expectations for both you and the client. The ‘consideration’ portion of the contract tells what value the service is and how and when you are to be paid.
A contract should always be the first thing you get from a client before you begin any services. Even a small job for a few hundred dollars should be bound by a contract.
Write a Service Plan
Is your service ongoing? Create a service agreement. This, too, is a contract, but it gives both you and the client clear definitions of expectations. Never agree to do a job “until it is done.” Be sure to specify how many hours each month are included with the monthly service fee, and how much you will charge if extra hours are needed.
Collect a Deposit
Or better yet, get paid in full upfront. Many wedding services require an upfront payment because it is easy (and history has proven) for clients to ‘forget’ to pay once the wedding is over. Require a deposit of up to one-half of your fee, or require your service plan customers to pay their fee for the following month.