Focused - 15: Put on the Business Hat

Episode Date: February 21, 2017

You can't earn a living as a Free Agent if you don't get paid. In this episode we discuss why the sign of a true professional is ensuring that they're being compensated. Why is getting paid so hard? How do we handle billing? When you're on your own, you're the one who has to make sure that the money is flowing in. If you don't get paid, you won't be an independent worker for very long.

David Sparks and Jason Snell spent their careers working for the establishment. Then one day, they'd had enough. Now, they are independent workers, learning what it takes to succeed in the 21st century. They are Free Agents. Welcome back to Free Agents, a podcast about being an independent worker in a digital age. I'm David Sparks, and I'm joined by my fellow host, Mr. Jason Snell. Hi, Jason. Hi, David.

Good to hear your voice again. We're back for another episode of Free Agents. Exciting to talk about money. Yeah. Money, money, money, money, money, money, money, money, money. Yeah, well, you know, there's a lot to love about being an independent worker, but the freedom and independence won't last long if you aren't getting paid, right? I was going to say, there's a lot to love, like the money that just pours in when you declare yourself independent and you just sit there and watch it. Nope, that doesn't happen.

You got to get paid. That's the fundamental difference, I think think we're going to talk about the fundamental difference between being an independent person and working for a company which is when you work for a company until they you know until they send you away or you just you choose to go they or they go out of business yeah or they stop making money they give you money every two weeks they give you money you work you go every day and you do whatever they tell you to do. And after two weeks, or maybe every week or maybe every month, however, for me, it was always every two weeks, they give you money. And it's pretty much the same amount of money for a long stretch. And then maybe they give you more later. And when you're an independent person, that doesn't happen. That's like the fundamental thing about being an independent person is the money stream from a single payer does not exist.

And the thing about when you're an employee is even if they are having trouble, if they have a client that doesn't pay them, they still have to pay you. That's right. You're entirely insulated in almost every case from the vagaries of the business and the cash flow and things like that and when you're your own business then you know cash flow is real if you know you've got a big client paying in a month that doesn't pay you today yeah it's a kathy on facebook by the way the facebook group is doing great so if you're interested we'll put a link in the show notes. You should go check it out.

But Kathy said, if you aren't getting paid, it's a hobby, not a career. That one just kind of cuts to the bone, you know? It's true, though. Yeah, that's about it. I mean, you can also be paid and it's still a hobby. I mean, because you really need to make it a substantial part of your livelihood. And that means, yeah, you need to get paid. Otherwise, it's not going to work, right? Otherwise, you're replacing your paycheck. If you're going out on your own from being somebody who's working for a company, you need

to replace your paycheck with money from people who are giving you money. And how do you do that? How do you get people? You can't like walk up to them and say, Hey, you got some money for me. That's not a real business plan. Um, so, so you gotta get paid. Otherwise you, you will go back to getting a paycheck because you're going to have to stop being an independent worker and go back and work for the man. And I believe this episode kind of bookends with the show we did last month on self-promotion in that, you know, it feels a little weird, you know, be asking people for money and, you know, you went out independent because you want to do great work. It's not that you want to get, you know, solely yourself with this money stuff, but just realize that if you don't find a

way to reliably make money off this and get paid, then you will be going back to polishing off the resume and going somewhere. I mean, this is super important to you to remain an independent worker. So, try and weigh those against each other so you can give this the priority it deserves. You're exactly right. This is one of those things that it's not why you're doing it, but it is exactly why you're doing it on another level, right? I mean, why you're doing it, but it is exactly why you're doing it on another level, right? I mean, the dream is not, man, I'm going to quit my job and I'm going to go find other people to give me money in exchange for work. That's probably not what you're thinking. You're probably thinking, I'm going to quit my job and I'm going to go do this thing for a living. And the for a living

encapsulates a whole lot of stuff that comes back to getting paid. And so it's not what you quit your job to do, but you have to do it. Yeah. And one of the first things you need to do when you get started and as you go through the process is constantly be aware of setting the right rate and figuring out what your time is worth. Yeah. And there's a whole show here about it, so we're not going to go into a great deal of detail because I do think, David and I, right before we got started, we both agreed that this is a big topic for another time,

and we've put it on our list for a future show. But to cover it in the short version, the TLDR version, as the kids say, is I think your biggest mistake is undervaluing yourself. If you price yourself too low, it's so easy to make a mistake and think, oh, well, I can work for this amount and have it be, in the end, not at all what is required for you to survive. It's just so easy to do that. It's so easy to run yourself down and say, I can't believe I can't ask for that. That's too much money. It's so easy to think it's enough. And then you haven't calculated in all sorts of other expenses

or time that goes into it that you that makes it actually not worth it. Not being clear about what the market will bear for your work. I've definitely experienced that where you think to yourself, well, I would think that this is worth, I'll make up a number, $100 an hour. And then you discover that the market rate is $250 an hour. And you think to yourself, oops, right? There's so many things that go into it. But I do think number one is saying you'll do work for an amount of money that is not sustainable. Yeah, that show's coming. Let us know your thoughts because we're going to give that one a whole show.

But let's kind of get into the nitty-gritty of why getting paid is so hard right after this message. This episode of The Free Agents is brought to you by FreshBooks. Get a free 30-day unrestricted trial by going to freshbooks.com slash freeagents. Well, they didn't know when they booked this show, but they really picked the right show to sponsor today. A lot of the things we're talking about today on The Free Agents involves getting paid and keeping track of finances. And there's a great solution for that in FreshBooks. Being a free agent can be a challenge, but with FreshBooks at your side, it gets a lot easier. If you haven't checked out FreshBooks lately, you should. They just did a redesign from the

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So, Jason, you know, there's a couple things I think about getting paid. There's the kind of what I'll call the emotional hippie element, which we'll get to in a minute. Oh, good. But even before that is just the technical issue of getting paid. It's, you know, you've got to think it through. How are people going to put money from their bank into my bank? And that's something I had to, had to struggle with as I got started. You need some kind of system to generate and send bills, and you need some kind of system for them to send you money.

Well, David, when two banks love each other very much, I fell into this too. It's the same thing, which is I was on the other side of it for so long. We used so many freelancers when I was at IDG. And so I'd seen it from that side. But then all of a sudden, I'm on the other side, which is there's a bunch of things going on here. There's having a bank account, which I know Andrew mentioned in our previous show, but it bears repeating. Open a business bank account. There are business bank accounts with little or no fees that are available. And I think that having a bank account for your business is probably a good idea because then you need to, well, it is a good idea. You need to do it. You need to keep the money for your business separate from the money for

your personal, if at all possible. That's my recommendation anyway. Yeah. And, you know, we'll do a show on that at some point because that's what I do is I help people set up businesses. So look at that. I have a, I have a little bit of knowledge on that. We can interview you. But that way also, by having a bank account, then you have an account number that you can give because a lot of businesses want to direct deposit. I've had that or transfer money to you. So that's one way you have to do it. For me, I also set up a PayPal and a Douala. I ended up with a bunch of different

kind of electronic accounts that all feed into my bank account, but that there were different clients who preferred to pay that way. Some clients are going to want to send you checks. So some clients, you will invoice them and you need to build an invoice, which is like a piece of paper or a PDF that you send that says, this is the work and you need to build an invoice, which is like a piece of paper or a PDF that you send that says this is the work and you need to pay. Some of them will want you to send a document that goes by a lot of different names that's basically your agreement to agree on what they're paying you and have a system by which they can transfer the money. I mean, that's as fundamental as it gets. And still, you need to build that out. Yeah, I think part of the issue is when you're getting started is give some thought to what it is you're billing.

I mean, some businesses you're billing for your time, some you're billing based on a completion of a project. Right. Or milestones within a project even. Yeah. Or maybe you're just selling a widget for everything that you get. I get a certain amount of money. And you need to give thought to that because how are you figuring out what people owe you is, I think, the first step of this. If you're doing time billing, you need to get a system for that. And the good news is now there are so many different ones that do it, including this week's sponsor, FreshBooks. So you can get an, I think an online solution is really great. That's what I use. And so you can track time anywhere you're at. And it's super important if you're doing time billing that you track it as soon as you do the work.

If you think you're going to let it collect until the end of the day, you're going to miss time. If you let it collect a few days, you're going to really miss time. And you're basically giving away money by not taking the time to bill a transaction as soon as you finish it. So have a system that's really easy, like with an app where you can enter it if you're on the road, or if you're seeing your computer that maybe they have a web interface. This solution is so much better because I've been down the road here as a lawyer for 25 years. I remember, you know, the old fashioned way we used to do this stuff and it was terrible. This stuff is way better. Project billing, that was the same thing. It's really easy. I do a lot of stuff where I do flat fee legal services.

I don't need to bill my time. But I have a template in OmniFocus when I do a new project. And the last thing I do is bill the time. Because you know what's happened, Jason? I forget sometimes. So I was going to mention that. The number one reason you need a billing system is that you need to actually track who you're doing work for, how much you agreed they would pay you and make sure that you've

asked them to pay you and then make sure that they pay you. And every step along the way, there are opportunities for somebody to fail. And I've seen it in my two years of doing this. I've seen failure at every single step. I've failed to mark down what we agreed on and had to like, look it up in an email. Or the most embarrassing thing is if you have to ask, what did you say you were going to pay me for this work I just did? Boy, that's terrible, right? I mean, oh, you said it would be free. So that's a failure. And then there's the,

did I send them a bill or not? That's not good. And then seriously, they haven't paid me. I need to remind them that they need to pay me. They owe me money. And you can, you could fake it, but you really need

to have a system for that. I was at a conference last year. It was the Release Notes conference. Great conference. And a developer walks up to me and says, bake it but you really need to have a system for that i was at a conference last year um it was the release notes conference great conference and a developer walks with me says you wrote a contract for me and you never billed me for it you know what kind of lawyer doesn't even send bills you know a bad lawyer yeah i mean it was the way he said it really it made me like like man that i left a bad impression by forgetting to build this guy. And that's why I put this whole system in place.

I had a freelance writer who was the same, David. I got to say, I had a freelance writer who did a lot of work for me. And we were coming when I was at IDG and we were coming to the end of our fiscal. And they said, you know, you got to get all your invoices in. Like, tell all your freelancers to send in their invoices in, like get pay, get, tell all your freelancers to send in their invoices and we're going to pay them all because we want to close out the fiscal year. Don't let them, you know, accountants hate that when you, when suddenly it's like, oh, I've got one last one for the last fiscal. And you're like, but I already closed it

out. And this writer just, I believe, I firmly believe that that writer who is a full-time freelancer failed to be paid for several thousand dollars worth of work because that writer, and I'll conceal their identity because it's so embarrassing, but that writer didn't invoice. Now, IDG's accounting department was often very bad at paying. They would go months sometimes without paying because I think that their systems were really antiquated. And so, we would also have that moment where diligent freelancers would say, why haven't I been paid? And we would run it up the chain and be like, what's going on with this guy? And often they would find that it got stuck somewhere and

it would get paid. But to have somebody who didn't even ask for the money that they were owed because they were so disorganized, it's just, it's, it, it, I feel terrible because that person did good work and deserved to be paid for it. But at the same time, it's incumbent on them. And I reminded this person a lot about it, but it's incumbent on them to do it. So you can't, it's really bad. And it does leave a bad impression. It leaves the impression that you're not really paying attention. And if they're not paying attention to the billing, what are they not paying attention to in their work? So, you know, invoicing is part of being a professional. Agreed. So do you have a system and how do you deal with it now? How do you keep

track of what you quoted somebody on a price and how do you make sure you don't have anything fall through the cracks? I have a fantastic system, which is that my wife is the CFO of the company and I inform her about all of the agreements I make. So, um, that means two things one she's got a system and she's got i believe uh it's a google spreadsheet based system but she's got a system of filing that but the act of me informing her in an email about the agreed upon rate also creates a paper trail where you know electronic paper trail yeah where if if we didn't write it down if it didn't get down um it's findable and i don't have to go back and ask i i you know even

though a lot of that stuff happens electronically anyway there's always a forward or something that goes to her so she knows it's from me to her about this issue and we can find it. And then she puts that in her system, her spreadsheet or wherever, or maybe she's using some sort of accounting software because she does that for some of this. And then she tracks the payment. And that's the other part of it. She will sometimes come back to me because I usually have the relationships with these people and say, these people aren't paying.

Can you check and see what's going on? Sometimes she has the relationships with them because she's usually the one who generates the invoices. I actually ask her to generate the invoices. That's part of her job, which is great because that's a thing I don't want to do, and she's got an MBA. So it's her job, and I'm very grateful for that. Sometimes she will follow up up and sometimes I will, but, but we've got that tracked. So we've got the, we've got the agreement tracked, we've got the invoicing tracked, and then we've got the payment tracked. And we know when those don't happen. Yeah. So the way I do it is I use Apple

notes extensively. So for every client, there's a, a's a general note for the company. And then every project they ask for me to do, there is another specific note. If you want me to write an agreement, I have a note for that. And anytime I'm on the phone or talking to that person, that Apple note is in front of me. So I write down, you know, if I quote them a flat fee, it gets into the note. So all that stuff gets tracked there. And then later I can always go back and refer to it as I'm doing the work or creating the billing. But whatever your system is, there's got to be a method of doing this because you don't want to be like me at Release Notes last year and looking like foolish. You don't want to be that freelance writer who, you know, so many independent workers are on the cutting edge, right?

independent workers are on the cutting edge, right? This is not necessarily a lifestyle that really lends itself to blowing off a few thousand dollars here and there. Every dollar counts. And you don't want to be like that writer I talked about who did the work and never got paid because they didn't do the other part of the work. I mean, this is the way to think about it, is your work is not just doing the work. Your work is getting paid for the work. And if you fail to send an invoice, I know invoicing, none of us are a professional invoicer, but if you don't do it and you don't get paid, you wasted your time. You wasted everybody's time. So, don't be that person. I would add that on the timely billing thing um have an appointment on your calendar or whatever system you use but make sure that you get those bills out once a month

yeah it's just it's the biggest mistake not to i have a i have a recurring client um that is my former employer and uh i write i write for mac world weekly, uh, they want to be billed monthly. And so we've got, um, we've got a, uh, a note on that and Lauren will bill Macworld on a monthly basis. And we've got a system for that sort of like a system within the system that sweeps up all of my work for them. And, uh, and, uh, and sends out a single bill single bill so so we've got that going too so a lot of a lot of our stuff is is our billing is interrupt based which is you turn it in you send the invoice like done here's the here you pay me yeah basically here's my work pay me and then with some clients it's more like why don't you send me a bill for your months all of your work for the

month at the end of the month or in the middle of the month or at the beginning of the month when whenever it is and it's like all right we'll do that too. Happy to do it. And you just put it on the calendar and you make it happen. Yeah. So my business is almost exclusively monthly bills. Everything goes out once a month. And I set a three-hour appointment because I know it takes me about three hours to kind of get that stuff taken care of. And when I do it, it's an appointment just like with somebody else. I do not miss it because I need to get those bills out by the end of the month. And I make the next appointment for the next month as I finish it. And you need to do the same.

And it doesn't matter what system you use, but find a way to make sure those get out. If you wait two or three months for a bill, your customer is legitimately going to contest it or feel like that they're getting ripped off. That's the other, the darker, slightly darker side of being late. Yeah, it's better than nothing, but it makes you seem disorganized because you are and unprofessional and they may have forgotten what they agreed to. And they also have, they have budgeting issues. They have potentially closed out their budget and they don't like getting things from four months ago that they have to offset against the previous month or the previous fiscal year or whatever. It's not good. I also think they just feel like the work

has less value four months later. You know, the experience is over. Right. They're not benefiting from that work now. They benefited from it three months ago and that's the perfect time to have them pay when they've seen the value. Yeah. All all right so can we go to the hippie part for a little bit okay let's do it yeah it's i got out my tambourine i'm ready it is super hard to talk about this stuff with people and if you haven't done it in the past when you go out independently it's even harder it is i mean money a lot of people i don't know whether it's my you know my parents were both uh midwesterners basically and basically, and talking about money. It's like I'm really reluctant to do it. We talked about marketing a month ago.

It's just like I'm really reluctant to do it. It's awkward. It feels awkward. Yeah. I think it's, for me, there's an advantage that the way the rest of the industry that I'm in bills is so ridiculous that I can use that as a jumping off point to say how I'm different. And that's a nice soft way to get into the talk about money. But the fact is, you can't take a bunch of work and not get paid for it. So you kind of have to have that conversation up front and set those expectations so people know whether or not they can afford you. I don't really have a lot of advice as to how to do it, but you have to do it.

You have to. I guess one of the things I would say is just own it. Don't say it timidly. Don't say it with, you know, don't let your voice go up at the end. How much will this be? It'll be $500. You know, don't do that. to accept the fact that we live in a society where money is the thing that's used to create transactions where people do work for another group, right? That's society. That's not impolite.

It's not weird. It's how the world works. It's how our society functions, how our economy functions. So don't be embarrassed by it. I know you might feel embarrassed by it. I just said that I feel embarrassed by it. But if you need to tell yourself, business is business, this is business, this is capitalism, this is what being an independent worker is, whatever you need to switch your mind into that mode, I feel like I can do it. And I think you can do it too, listener, fair listener. But think about it that way, which is you're providing a service to your client. You're providing a service to them. And they thank you not with gratitude, although let's hope they have gratitude for you.

But they pay you. The cash is the thing. And don't tiptoe around it. Like, you're not looking working for tips right you're not uh hoping that if you do a really good job they'll pay you like they will pay you for the work that you do don't demean it don't make it seem like it's secondary it's the reason you're you're working for them is because they're paying you. So just be businesslike about it. I mean, I always fall back on business. That's the word I use when I'm in these situations is this is the business part. You pay me,

it's a transaction. You pay me, I do this work for you and we move on and maybe I work with you again and that's great. And that goes on the front end of setting a price and setting a timeline to pay. And it goes on the back end of billing and asking for prompt payment. Things like saying on your invoice, payment expected within 30 days, right? And it goes to having a conversation if they don't pay and say, you know, I did the work. You need to pay me and you know it it's like on a different plane from friendly collegiality like friendly collegiality happens in the work um and this happens somewhere else and it's not like i want you to be mean but

you need to be a business person business again and. And, you know, this is a norm. This is a cultural norm. This isn't something that's weird and you're not begging for money like they owe you money. So, you know, and normally it isn't a big deal, but it's good to think of it that way. I think it's healthy almost to say on this other plane, this is a a work for cash situation that's happening um mike montero of mule design wrote a really good book called design is a job and this is one of the points that he makes in there which is a lot of designers and whether they're independent or they have you know small businesses or whatever they get caught up they're creative people they get caught up like me uh in uh in all their like feelings. And

I want to work on the work and I want to make something beautiful and I want to make something nice and all of that. And that's all true, but you can never forget that it's a job and you need to get paid. And I think that, uh, I think that all of us putting that hat on, maybe it's like the free agent's hat, uh, that, that, that fedora or whatever it is that's on our logo. You put on the business hat. And then that's when it's just about money. You need to pay me. Something that helped me was that experience at Release Notes when the guy, I mean, the guy clearly thought I was kind of a bozo. And I think that that was good for me because this is part of the presentation of

the business, being professional about talking about billing upfront and executing on it. In that case, I got it down fine. I gave them a quote. I did the work. I did everything, but I blew it at the point of getting the invoice out because it just fell off the radar. And I think that you got to treat it as that. I mean, if you're hesitant to do this stuff, just think about this is part of me presenting myself as a legitimate business. Yeah. Yeah. No, it's professionalism. Again, like I said, you asking for money in a timely fashion is part of being a professional. It's part of business. And it's not something you have to apologize for. In fact, I think apologizing for it makes it way

worse. Like, don't do that. Don't ever do that. It will make them think less of you if you have to apologize, because why else would you do the work? You're doing the work. You may believe in their mission. You may enjoy the work. You may pride yourself in doing good work. Those are all good things, but ultimately, the reason you're doing the work is because they're paying you. And the reason that they're paying you is they want the output of your good work. If you're really uncomfortable with this stuff, I would recommend almost role playing a little bit. Talk to your spouse or significant other and say, you know, what if somebody says that costs too much money? What are you going to say back to them? You know, and, and think about that and,

and come up with a way and get the words over your lips to someone that's friendly. So you can kind of get, get through that and give yourself a little bit of a foundation. So when you get on those phone calls, it's easy. It also means knowing upfront what, what you actually value and what your price needs to be, which again is another show, but it's a lot easier when you say, I need X, and they say, that's more than we can spend. If you know that you actually can do it for a little bit less than X, then you have the confidence to say, well, let's see what we can do. Maybe there's some way we can work this through. And if you know that X is the bare minimum and you cannot do it for more, you will lose money in terms of other work

you could be doing, then that gives you the strength to say, I'm sorry, this is what the rate is for this. I can't do that. And you have the confidence to do that. If you don't know, that's what will happen is you will be confused and you'll be wishy-washy and you won't be able to give them an answer. So come in confident. Know what you can charge. Agreed. What do you think about asking for money up front?

I think it depends on the client and it depends on what is, you know, it's common practice, right? A lot of it is this kind of work is done up front. Most of the work I do is pay on delivery yeah um and that is that can be scary because you're doing all the work up front without the money in the bank but at the same time that's just how it is it's customary and the most of the the work that i do for large projects where there's a lot of time and a lot of money on the table um i have often seen it structured with milestones or with a couple of payments at the beginning and the end of the project. You end up with something that's kind of

like a kill fee, which is where they pay you to not do the work. If you have a big project, a design project, let's say, because that's a good example, something that I've seen in my personal life, where you've got a very large design project and it's going to cost you $10,000, let's say, or you're going to get paid $10,000, depending on who you are. And maybe you say, well, we want $5,000 up front and $5,000 on delivery. And some of that is about cash flow. It's about keeping the money going, because it's great that you are going to get $10,000 at the end of the two-month project, but how are you going to buy bread in the meantime? It also can often, depending on your agreement with them and potentially your contract with them,

it allows you to, they incur a penalty if they walk away, because sometimes that happens. And if you say, you know, it's 5,000 upfront and 5,000 on delivery, and, you know, if you terminate, then I keep the 5,000 or I keep 2,000. I mean, there are ways to work that out where it's essentially the kill fee if you terminate this relationship without cause. And again, this is contractual stuff, which is way more complicated than what we're getting into here. But I've seen it work that way. I've also seen it work on milestones, which is like literally, let's say again, it's a $10,000 project. You know, on this calendar date, we'll pay you 2000. And on this calendar date, we'll pay you another 2000. And

on this calendar date, we'll pay you the remaining 6000 or on delivery. And so, there are different ways to structure it. I think, at least in my realm of experience, that you get paid up front only if it's either a client you're concerned about, like you're concerned that they're going to run away or go out of business and not pay, and so you want the money up front. Yeah, like I have a friend who's a criminal attorney. He gets paid up front for every case, because you don't know, right? Do you know? Exactly. Those guys might be criminals. And the other way to do it is, like I said, if it's about cashflow, if you're taking on a huge burden, that's going to be most of your work

for a period of time. And there's no way for you to support yourself in the meantime, and wait for that check to come in. And you know, in most cases, if your business is up and running and you're doing pretty well and you got some money in the bank, it shouldn't matter. But the fact is, sometimes that's the case. This is a huge project. It's my entire living for the next six months. I can't afford them to pay me after six months because I have no income coming in until six months from now. Well, that's the kind of project where you have to say, I need you to pay me regularly. I need you to pay me over time

or give me a chunk up front. Otherwise, I can't afford to do this job. That's my gut feeling is that that's when it really comes into effect is you either don't trust them or there's no way you can get through to the other side. Yeah. Well, on that second point about cash flow, I would add to that when you take a project that has an opportunity cost, which may be saying the same thing. And what I mean by that is you take on a big project and you turn down. Like if Jason takes on a book, a project to write a book, and then he turns down two other books because he took on this book, and they suddenly flake out on him, he's lost that opportunity to do those other two books because they've been assigned to different authors by now.

So that's another good, that's kind of a good way to pitch it to him too, to say, look, I'm going to need some upfront because I'm going to have to give up other work to make this happen. That's how the publishing industry works. That's what a book advance is. A book advance is we're going to give you this money to write the book. And then the book takes a long time to write. And in the end, when you, and oftentimes book advances are delivered over time too, as a, as a carrot to get you to turn in portions of your

book. And then royalties are charged against the book advance. So you may not, the book I wrote, I never saw royalties. The advance was what I got paid to write the book, but it's the same thing where you get the money over time. Expenses also is in here. If you're working on a project that requires you to spend money on the project, whether it's travel or materials or I don't even know what, that's another thing to keep in mind is to get paid upfront or to have the client agree to pay to cover your expenses and not do that at the end of the project if you can't afford those expenses up front. But I think that all, you know, for me, those are the biggest reasons to ask for money up front. If you can afford to wait till the end and you trust your client,

then it's the most ideal situation. But it's not always one that makes sense. Yeah, I don't usually take money up front. I'm almost never. As a lawyer, you have to keep it in a special account and it's, it's complicated. And so I always tell people I charge at the end of the project. I only work with people that pay me and, and, you know, knock on wood, I haven't been stiffed yet, but if I would be, I, I would just stop working for that person. The one of the, one of the best things I ever heard a friend say to someone that didn't pay me said, look, I could be home playing with my kids or I could be working for you for free.

What do you think I would prefer to do? Yeah. I guess that's the other hippie part of this is how do you deal with somebody that hasn't paid on time? I can tell you for me, I told you earlier I scheduled time to send bills out. I also schedule time usually in the middle of the month, a couple hours or an hour, just to kind of look at receivables and make a few phone calls. And I try to do it very gently, you know, just say, hey, I noticed this invoice is a little late. Is everything okay? And usually it'll be somebody saying, oh, I forgot about it. I'm sorry. I'll get you a payment out. Or they'll say we're having a really hard time and we can work something out.

But don't be afraid to get on the phone. I think getting on the phone or meeting with people about a receivable is way more effective than sending a passive aggressive email. Yeah, I agree. I think it's good to remind people if they, especially if you're working for a larger company, things fall through the cracks, things get into weird places. Like if you've got a relationship with somebody and they haven't paid their bill yet, following up and saying, I'm just a reminder reminder can you tell me where this is i think that's fine there is a point at which you need to have the personal conversation right once you i think you a reminder is fine but but at some point they're just shining you on and you need

to talk to them and and uh we're not going to give any any uh legal advice about what happens if they refuse to pay but uh that maybe that's another show or maybe that's you talk to a lawyer because the show would be entirely be sparky saying i can't tell you about this i'm just i'm just in california but like like on a previous show but but i would say yeah there's there's a reminder and then after that once you're starting to cajole somebody because they're not paying you, you got to talk to them. A good bit of advice I received once is if somebody owes you a little bit of money, then you have leverage on them. But if somebody owes you a lot of money, they have leverage on you. So I guess a bit of advice I'd give on this is don't let that number get too high.

I've seen this happen before, too, is a client owes you money and comes to you and says i've got some more work for you and you say well you haven't paid me yet they're like oh yeah yeah yeah but do this work and then i'll pay you for all oh yeah that's bad that's right and you just can't you can't do it there there is you're just throwing good money after bad so that's something again is tough but um you have to you have to make a stand somewhere don't get conned if they're not going to pay you don't work for them like if they if they owe you money don't don't don't work for anybody who owes you money what do you do when you find yourself in a hole first thing you do is you stop digging and when you take on more work from a deadbeat

client you are digging yourself in deeper so So just stop that. Yeah, absolutely. It's an opportunity. Sometimes that's an opportunity to say, okay, well, pay me up and give me an advance because in the past you haven't paid on time. And then maybe you reset the relationship. But if they're not interested in that, then you should not be interested in them. Okay. So what are some tips about getting paid as we kind of head towards the end here? Okay, so what are some tips about getting paid as we kind of head towards the end here? Well, so some of the things that we've talked about before, just to re-emphasize them, you need a system. You should schedule time in your – don't put it off.

Schedule time to do billing. to build into your process that you complete the work and you bill them right then, then have a recurring event on your calendar that is blocked off that is your time to get those bills out. Because you don't get paid. In most cases, you won't get paid unless you ask to be paid. So, you got to do it. So, that's number one. Yeah. i think another one is um you know evaluate your billing rates and regularly kind of take a look at how it's going it kind of ties into this other show we're going to do but i think it's important to to be thinking about this stuff constantly right because uh what makes sense today may not make sense in a year and sometimes that's tough with clients because it's harder to go back to them and say i I'm going to raise my rate. But it's worth

being aware of it. Maybe you don't raise their rate, but you're the next client who does something similar, you give them a different rate. And as you do the work, you're going to be able to, it's good to look at that and like, well, how much work did I really do? Especially if you tracked your time and how much did I get paid? And is that worth my time? I've been going through that the last few months. I've been doing a lot of that of what do I actually get out of this thing that I'm doing? And is that enough to justify continuing to do it? And if you don't ever do that bit of self-evaluation, then you're making a mistake. Well, one of the things I'm doing is I'm starting to raise some of my flat fee rates because I have more work than I can keep up with. And I'd like to be able – and some elements of my business I do.

So I'm starting to think, well, maybe I need to charge a little bit more so I can give each one of these a little bit more time. So anyway, be thinking about that. And the other thing, which we should have really mentioned earlier when we were talking about the technical part of getting billed, is give your clients a lot of ways to pay you. I've got an 80-year-old client who loves to send me checks. I've got a client in Asia who wants to pay me digitally, but that's not that easy. So eventually I found a method for every person that's in my life that wants to give me money where it's super easy for them to pay me. And I got as many of those as I needed to make everybody happy and you should be doing the same. Agreed.

I bet we didn't cover everything, Jason. I'm sure we didn't. Fortunately, there are more episodes. So you can let us know. There's a feedback link on where you can email us directly by going to the show page at relay.fm slash free agents. You can also post your thoughts about this topic and anything else in our Facebook group, which we mentioned earlier. You can reach it at facebook.com slash groups slash free agents group. And that will be us asked to be invited if you haven't yet been invited. And then we'll let you in and you can join in the discussion. All right.

I think that's the end for episode 15 of Free Agents. But we'll be back in a fortnight with more. Until then, David Sparks, thank you very much for joining me as always. And you as well, Jason. And everybody out there, go get paid. Go get paid. Bye, everybody.