OT: getting paid

So, I've recently started trying to run a business on the side setting up sound reinforcement equipment for DJs and stuff like that. This is a kind of new area of business for me, and I've recently run into some issues with a client. Given the nature of the work, these issues may come up again and again so I thought I'd ask here.

This client was actually a friend of the family, so I gave a discount on my usual rate. This guy didn't know what he was doing with his gear at all, and I spent a great deal of time working with what he had to make it sound the best it could.

I provided him with an invoice for the work with a due date, and the date has now passed. Apparently, the client's father-in-law looked at the system and decided he didn't like how I had set it up, even though it was a thousand times better than how it was before. He thought the microphone sounded "tinny" (not a piece of equipment I provided) and that the feedback destroyer setup wasn't completely killing feedback frequencies to his liking. Told his son-in-law not to pay me for the work.

Son-in-law is now digging in his heels, saying I have to spend a lot more time getting it "just right" before he will be allowed to pay. This is a completely open-ended situation and it may never be resolved, and I have a bunch of money in equipment and cables sunk into the contract that I may never see because I just don't have any more time to work on it. At this point, because I don't want to alienate my friend, I may just have to take a loss.

How to avoid this in the future?

Reply to
bitrex
Loading thread data ...

Did you have a purchase order with deliverables well defined?

(1) Don't do work for "friend of the family" again.

(2) Just for fun, sue in small-claims court. ...Jim Thompson

--
| James E.Thompson                                 |    mens     | 
| Analog Innovations                               |     et      | 
 Click to see the full signature
Reply to
Jim Thompson

Obviously your time is not worth as much as your friends money. Why are you worried about alienating your friend, he's not worried about alienating you! Mikek

--
This email has been checked for viruses by Avast antivirus software. 
http://www.avast.com
Reply to
amdx

First - which country are you in? Don't like to assume...

(If the UK, then there's the Small Claims Court which is low effort, low cost and set up for exactly scenarios like this.) Quite frankly, if I could I would sue, as long as it did not take an insane amount of money or time. Or write it off if it is impractical.

Secondly - maybe take a deposit up front first next time? Don't know if that is the done thing round your way.

Reply to
Tim Watts

It's money claim online nowadays, and it's easy.

formatting link

Cheers

--
Syd
Reply to
Syd Rumpo

You need something in writing that specifies that you're working hourly, and that consulting is a 'best efforts' business.

Then work for somebody who has actual money of their own--you always have to have the arrangement with the guy writing the checks.

That being said, getting stiffed occasionally is part of the gig. It's only happened to me once, when a company gave me a lot of work and promptly went insolvent. Painful.

Cheers

Phil Hobbs

--
Dr Philip C D Hobbs 
Principal Consultant 
 Click to see the full signature
Reply to
Phil Hobbs

You *do* have a contract that spells out the responsibilities of each party, right?? :>

For fixed cost projects, I usually asked for 1/3 up front (i.e., the client is "extended", I have nothing at risk), 1/3 at a halfway milestone (client is still extended but nowhere near as much, and I've got a history started) and remaining 1/3 at completion (*I* am extended, client has everything he asked for!)

For T&M work, invoice weekly and give tight terms (net 7 days) for short projects; you can extend them for longer-term projects (net 30).

Avoid name-calling. It will just make things worse. "Learn your lesson"

If you have a fair bit of money at stake, you can consider negotiating CLEAR, MEASURABLE terms before you decide to resume the work. You can also expect something "up front" as a sign of the buyer's "good faith" (as he has proven not to be trustworthy!)

You can also walk away from it. IME, sooner or later, he'll *need* you for something. At that point, you can insist on money up front (citing his past behavior). Or, leave him hanging. Maybe the

*next* guy he hires will be more cutthroat and he'll rue the fact that he's lost your goodwill. He may end up paying more and getting *less*!

A relative developed and sold medical office software several decades ago. Got "stiffed" at the first site at which they installed. Big shot doctor figured he could do what he wanted. OK, they ate the cost.

Some time later, disk filled up and doctor called in a panic -- system was unusable, wanted an upgrade, etc. They gladly installed the upgrade and locked him out (this is probably not legal!) until payment was received -- for the upgrade AND the original system!

Sure, doctor could have sued. And they could have let his "practice" sit in that "locked" condition while the suit made its way through the courts. How many days (months, years!) does it take for you to decide it's cheaper just to do what you *should* have done in the first place?? And, all the while, others in the medical and patient community would get to hear his dirty laundry!

Another friend got stiffed by a client. Some time later, client called in a hurry to get some work done on a new project: "Well, Bob, there's still the matter of that $X you owe me from the last!" "How about if I send you a check for $X/2?" "Sure!" Check arrives. And is promptly cashed. More time goes by. Bob calls: "I haven't heard from you! Did you receive my check??" "Yes, thank you very much." "Well, when can we get started on the new project?" "Well, Bob, there's still the matter of that $X/2 you owe me from the last!"

I.e., there is a point at which the opportunity cost will bite your friend.

*Without* your need to remind him of this!
Reply to
Don Y

n

if its a freiend you want to keep, i'd give him a copy of the receipts for the gear you paid for that he has and is using, and tell him, if he likes t he stuff and wants to keep it, here is what you paid for it and he owes you that amount. If he doesn't want the gear, then he should give it back to you. I'd just take a loss on your time to keep peace in the family, but not on the gear you paid for.

Mark

Reply to
makolber

I've had it happen because I'm rather sloppy with the contracts. The problem is that you didn't have a clear definition of what constitutes completion. If you met the stated objectives, as itemized in an estimate or completion document, there's not much they can complain about. There's also the clause about additional changes will be billed separately to underscore that any changes of specifications or circumstances will be the responsibility of the client, not the contractor.

If you go to small claims court without a contract, the judge will almost automatically award you 50% of your fee (if the charges seem fair) so that both parties leave only half angry. I've had situations where I probably should have sued, but after calculating the cost to benefit ratio, I decided it wasn't worthwhile.

Also, I have friends and I have customers. The difference is that friends don't bother to pay me, and customers do pay me. Otherwise, they're the same. It is all to easy to turn a customer into a friend, and almost impossible to turn a friend into a paying customer. It took about 5 such mistakes over my working career to learn that lesson.

You also made another mistake. Never give a discount on the first job. The client will expect the same discount forever, even if you make it clear that it's a one time only proposition. My mentor went a step further and insisted that everyone, large or small, get charged at the same rate. I've tried to do that over the years with some success. The last thing you need is to have your next client talk to your previous client friend, and find that you gave the friend a discount. The next client will surely ask or demand the same discounted rate.

Good luck.

--
Jeff Liebermann     jeffl@cruzio.com 
150 Felker St #D    http://www.LearnByDestroying.com 
 Click to see the full signature
Reply to
Jeff Liebermann

Yeah, I agree on the first part. If I had known that completion of this job was reliant on the approval of some third party, I don't think I ever would have taken it.

The father-in-law just bought one of these 22k...things...recently as well and has invested a bunch of money getting it modded and done up with custom paint, maybe to give you an indication of the personality type we're dealing with:

formatting link

Reply to
bitrex

Right.

Reply to
bitrex

Thank you, this is good information to keep in mind.

Reply to
bitrex

  1. Get some money up front.

  1. Find a better customer base, people with money. DJs are going to be high on the flake scale.

--
John Larkin         Highland Technology, Inc 
picosecond timing   precision measurement  
 Click to see the full signature
Reply to
John Larkin

Immediately go with the full price, no beating about the bush, got it. (I'm also in a process of starting a business, but an equipment manufacturing gig, not a consultancy.)

Reply to
Aleksandar Kuktin

If you aren't getting paid then the kit isn't theirs to keep. Assuming here that you have sensible T&Cs that are applicable to individuals.

Make sure you get staged payments with 10% on final acceptance. Or don't work for dodgy unreliable friends of the family again.

--
Regards, 
Martin Brown
Reply to
Martin Brown

We did a big project for the Indian government. It took 2.5 years to get paid, but we finally did. Now we know.

--
John Larkin         Highland Technology, Inc 
picosecond timing   precision measurement  
 Click to see the full signature
Reply to
John Larkin

If you want to offer folks a "deal", do it in payment terms; i.e., give them a discount if they pay, in full, PROMPTLY. This is esp worthwhile with bigger organizations where it can take weeks for a payment request to make its way "through channels"

Or, offer some other "service" (extend the warranty period).

Reply to
Don Y

Sometimes you get lucky. Bowmar went bankrupt owing me ~$6K. A year later a judge ruled that consultants were to be treated as part-time employees and I got all my money. ...Jim Thompson

--
| James E.Thompson                                 |    mens     | 
| Analog Innovations                               |     et      | 
 Click to see the full signature
Reply to
Jim Thompson

Seems like sometimes people are magically broke whenever it comes time to pay me. I lived on a fixed income for several years because of serious health problems, and yet I still somehow managed to have enough to get by...

Reply to
bitrex

Flakery seems to be becoming a bigger and bigger problem in general, both in business and personal life. Maybe it has something to do with the spread of technology and social media or whatever, but getting anyone to actually commit to anything on a schedule seems like pulling teeth sometimes.

I'm at a point in my life where I've decided that I'll only really accept direct answers to direct questions. I'll accept "No", "Yes", and "I'm not sure, but I will know with more clarity on ."

Anything other than that and well, don't call me, I'll call you.

Reply to
bitrex

ElectronDepot website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.