The Side-Hustle Dad

Ep21
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Why Clients Ghost
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​[00:00:00]

Bryan Steele: Welcome back to another episode of The Side Hustle Dad. Glad you are with me today. We are going to talk about getting payments. Now, I can imagine the scenario, and you've probably been in it before, or you will imagine it very soon, where you spend all that time, you're pitching, you're doing your sales process.

We've been talking a lot about that recently, and somebody says yes. They say, "This sounds great. I see the value. I see how you can help me," and boom, you're excited. Like, okay, you're a client. Let's start working together. Let's make things happen. You start getting momentum. You start working, but after days and hours of effort, [00:01:00] they start disconnecting, and they stop sending messages back.

Maybe even you send them some final product or something that's usable before accepting payment, and then they just ghost you. They're off. You're like, "Hey, can you pay this invoice? Here's the invoice that we agreed upon.

You said you wanted to work with me." And I know how that can feel. It's so hard to get out there and get those new clients, and once somebody finally says yes, we just, we just wanna go. We just wanna start working because we've already been through all the awkward sales process, and so we just want it, them to be happy.

But we didn't get payment upfront, and now all of a sudden you find yourself being a bill collector trying to hunt somebody down, find somebody to pay you for the hard work and effort that you've already put in.

Services Need Upfront Pay
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Bryan Steele: Now with, products, if you've got a product, this is pretty easy.

You've made the investment and the time and the [00:02:00] resources, so somebody must pay before they get the product. It's pretty obvious. I mean, when we go to the grocery store, we can't leave with anything until we've paid. We don't wait until after we've drank the gallon of milk before we pay for it. And for you, your services are the same way.

We are not in the business of collecting bills after the fact, and so today, that's what I wanna talk to you about. I want to give you a clear way to think through this and to approach it and the strategies in which to accomplish it.

Mindset and Reframe
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Bryan Steele: So first, why do we do this? Why are we struggling to get the money up front?

Well, because it's an awkward conversation, and to some degree, there's a little bit of imposter syndrome. We've talked about that before. We're not sure that we're really worth what it is that we do or the service that we provide, so we take a step back and we say, "Well, I'm not gonna ask for the money yet.

I'm gonna prove my [00:03:00] worth. I'm gonna show them what I can do, and then they're gonna be like, 'Here you go. Here's the money.'" And it's a little awkward having that money conversation with somebody. The first time it's like, "Hey, the-- please pay me before we've ever done anything together."

And so there's a mindset there, there's a fear there that if I push to get a payment, then somebody's gonna say no. And here's the, the reframe I would make. If somebody's not willing to pay you up front, they're likely not willing to pay you at all. They're not gonna pay you on the back end. If they are that price sensitive and unwilling to pay on, at the beginning of a project, that, that is not going to change at the end of the project, and you're gonna find yourself with bad clients struggling to get payment.

So if this is the experience we're having, we're going through this cycle of don't wanna have that awkward money conversation, we just got them to agree to what I do and the price I [00:04:00] offer it at On the flip side, I don't, I don't want to, you know, push them for more, right? We've already got past that difficult conversation and, and I'm not really feeling secure and confident in what I can do because of my own imposter syndrome.

So we dial it back and we're like, you know, "Bill at the end. When the project's finished, I'll send you the invoice, you'll be happy." Now, there are some large companies, large corporations that you know have tons of money and their policies are like pay on a net thirty, like thirty days after, things like that.

In those situations, I still like to push for payment up front.

Require a Deposit
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Bryan Steele: So for example, when somebody comes to you and is like, "Yeah, the price looks good. Let's do it." You say, "Awesome. I'm gonna send you a contract, and then you're gonna be paying a non-refundable deposit to begin the project."

And that shouldn't come as a surprise, regardless of the service you're in, [00:05:00] because they are showing that they're serious. Maybe there's materials you have to go buy. Can you imagine not getting paid and having to go buy materials? Like if you're a landscaper, you gotta go buy all the stone up front on your own dime and then make them pay at the end of the project after you've paid for it.

So there are certainly lots of scenarios where asking for payment up front should be standard, should be expected, and shouldn't get a pushback because they know you're investing time and energy and effort into it. There should be a commitment of theirs up front. So that's the way I always like to word it.

To begin the project, we require a fifty percent non-refundable deposit. That is the strategy. That's the starting point. Now, for me, I even go a step beyond. I require a fifty percent deposit to book the time. But then before I s- even start working, before they even come in to work with me, they are [00:06:00] paying in full the remainder of whatever it is.

Now, that's maybe different for other types of projects that may be ongoing over time. But for discrete projects where it's like a clear start and end point I like that because it is making sure that you get that payment up front. But absolutely everybody should be asking for a non-refundable deposit at the beginning.

Depending on your pricing structure, it may look a little different. Maybe you get forty percent, maybe you get seventy percent. Whatever looks like it would make the most sense for your business, that's where you start.

Deposit Terms and Reschedules
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Bryan Steele: You say, "This is the non-refundable deposit." Now, they may say, "Well, what if something happens and I gotta reschedule, or this or that or the other?"

People can come up with excuses for this, and so what I always say is like, "You can put in a little clause that says, 'Hey, this non-refundable deposit is good. If you need to reschedule and you reschedule within such and such a date, the same deposit will be applied [00:07:00] to the project.'" You can give them a little confidence that as long as they get started in a reasonable amount of time working with you, they're not going to have concerns or issues about losing that money.

But there needs to be a commitment, like if they pay the deposit and then they bail on you, they don't get that money back. That is the cost of the commitment because you are making plans, you're making arrangements, maybe you even buy materials to make that project happen. They should not then be able to bail on you and you are not compensated.

Because even if you could do other work, it may have been days or weeks before you begin, and you can't fill that spot on your schedule, right? That is the cost of filling your schedule because now that time is open, and it may be hard to get a client to fill that spot. So always ask for a deposit. Give some clauses and caveats in case things need to be rescheduled, which is always fine.

Ask for a non-refundable deposit to begin work.

Invoicing and Contracts Setup
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Bryan Steele: Now, finally, how are you going to do this? [00:08:00] You're going to do it within your invoicing. So as soon as somebody says, "Yes, I want to work with you.

Yes, I want this," then you're going to send a contract, some sort of agreement. Does not have to be overly complicated where they're saying, "Yep, this is the price. This is the scope. I am agreeing to this work." And then once they finish signing that, you send an invoice for the deposit, and you communicate that until that invoice is paid, you are not beginning any work.

You're not putting them officially on your schedule. Any dates you've talked about to that point are contingent upon them paying for that deposit. And so the invoice is gonna be very simple. It's gonna say, "This is your fifty percent deposit." Maybe you put the entire project in, and then you knock it off and say, "This is the deposit price for this."

You can do it a bunch of different ways. PayPal has good tools for doing invoicing. Stripe is a good v- invoicing [00:09:00] software. If you're using QuickBooks for your, you know, invoicing, you can easily set this up in there. So set it up. Send that initial invoice right up front. Just build a template you can reuse over and over again with each new client.

It doesn't have to be a difficult process. And you just approach it very straightforward. You say, "This is the deposit that is required to begin work." And if they push back on that, then they're likely a red flag because that means they don't have the money right then. And if they don't have the money right then, what's going to say that they will have that money later?

So it's important to get that upfront, get that commitment in writing, send that invoice, and begin that process. So that's my challenge to you today. Take that time, spend twenty minutes, build that invoice template for the deposit, set it up so that you can easily send it to your next client, and you can build something in that [00:10:00] goes forward.

Retainers and Auto Pay
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Bryan Steele: What's really cool is if you have a retainer contract, like say you're a consultant and somebody works with you three, six, nine months, a year, you can set up a monthly retainer to where they... you just say, "Hey, to begin work, you pay the first month. Here's the invoice," and then it is an auto payment for each month after that, and you don't have to go hunting payments.

I love that for those consultants, service providers, where you can just set it up as an auto-pay. You're not sending each invoice. And that's honestly vendors that I work with on a recurring basis. Like, I also love to pay out that way because I don't want to have to think and remember because a lot of times in those ongoing contracts, it's not that we don't want to pay them or we don't see the value, it's just we forget and we're busy.

And so you don't have to think about this as necessarily always somebody is, you know, trying to avoid you, but you're just making it easier for them. There's not one extra step, and you're not having to follow up [00:11:00] with them over and over again.

20 Minute Action Challenge
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Bryan Steele: So do that today. Spend those twenty minutes. Go through your invoicing software. Build some of those templates for a deposit and ask for that on the next project you get.

Closing and Next Episode
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Bryan Steele: Thanks so much. Appreciate you, and I will see you on an episode next week.

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