This transcript was generated from the episode audio and may contain minor errors.
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It's kind of a nightmare scenario to work on something important and not get paid for it. And of course, I mean a situation where you're expecting to get paid, not where you were doing a favor for someone or it was somewhat unclear, but you just didn't get paid. And so that's what our caller today is asking about. After a freelancer friend had a negative experience working for a company and then getting stiffed on the bill, our caller wants to make sure this doesn't happen to him. What can he do and what can you do to be proactive about invoicing and collecting payment?
So let's see if we can help him out. And I'll also say right up front that while it's important to pay attention to this, I don't think you should let this concern hold you back from getting started, okay? You know, whenever you ask what could go wrong, like nothing wrong with disaster planning, but whenever you ask what could go wrong, I think it's also good to ask what could go well, what could go right? Not just how might this end in disaster, but also how might it be amazing? Let's look at the question, what if a company hires you and doesn't pay up?
Detailed question and my answer after this quick message from our sponsor. [Music]
Hi Chris, this is Michael from Miami. I just started listening to the show recently after finding it on Spotify. A friend of mine did some work for a company and didn't get paid. In retrospect, it seems like they took advantage of her, but also they didn't have a clear contract and only had a verbal authorization from one person who's no longer at the company.
I wanna start offering design services to startups and naturally, I'd like to avoid this situation. I also don't wanna spend a lot of time chasing down invoices. However, is there a way to protect myself and keep things simple for everyone involved? [Music]
Michael, I'm so sorry about your friend's experience. That sounds negative and she should definitely get paid, right?
Let's just say that first. Also though, just to kind of maybe take a higher level look from a position of a small business owner, I have vendors that I pay and I always pay them to be clear. But I'll also say that I prioritize paying the ones who are really proactive, okay? That's why I think it's so important to be proactive in the situation as a freelancer. I actually tend to respect people more who are like, okay, I'm not gonna start work until I get my deposit.
And then as soon as the work is done, I'm gonna bill you for it. And I need you to pay that bill, right? It's not fun as a business owner to get an invoice that is really overdue. Like the work was done a month or two ago, but they didn't really bill me for it until now. Obviously I'm still gonna pay that bill, but it just feels kind of demotivating in that way.
So that's the perspective of the small business owner. From the perspective of a freelancer, from really everyone, I think it's just better to couple the payment with the work, okay? So with that in mind, one of the best things you can do, well, actually first and foremost, a clear contract is essential. In this situation, your friend had a verbal authorization from someone at a company who then left, right? So that's problematic.
So having a clear contract, which can be very simple, just a one page agreement. And then be fast and proactive with invoicing. Again, it's human nature to leave it until later, but fight human nature in this way. And there is something you can do to make it simple. Pretty much any basic invoicing or small business payment software, QuickBooks, FreshBooks, Zoho, WaveApps, probably some others, they all make this process simple.
They know this is a pain point for freelancers. And so this is a big part of what they do. It can actually be set up to send reminders on your behalf to clients who haven't completed payment. So again, you should almost always get a deposit, typically 50% is normal, and then don't start work until you have it, right? And then whenever you deliver that project or it's otherwise complete, invoice for the balance right away, just doing those things is gonna take you far.
Now, again, I wanna just circle back before we wrap up. I don't think you should let these kinds of concerns hold you back from getting started because 95% of your experiences or more are going to be positive. And whenever you ask like what could go wrong about any particular scenario, I think that's helpful. I like to look at the risks and understand possibilities. But it's also good to ask what could go well, like what could go right, what could be awesome and amazing.
And I could do this business and people could pay me for it. And it wouldn't be that much of a hassle. Actually, I would be able to do lots of creative good work and I'd be building financial security for myself. So those things are pretty good, right? So that's what I try to focus on while not neglecting these practical details and making sure you get paid.
So that's my counsel, my advice to you, Michael. Good luck to you and to all of our listeners out there who are freelancing, thinking about freelancing. I'm cheering you on here. Let me know how I can help. sidehustleschool.com/questions.
I am excited about all this year has to come. So thank you for joining me. We've got a new episode coming out every single day. You can subscribe or follow wherever you like to listen. It's all 100% free.
My name is Chris Guillebeau. You're listening to "Side Hustle School." [Music]
- From the Onward Project.
