Entrepreneurship is one of the hardest things that you will do. It is exhilarating, frustrating and at its very best the most rewarding pursuit you will have. It is not a journey for the weak or easily swayed. For those who have ever climbed a steep mountain, it is very often a harkening to the experience of pushing upward in a press against the elements, fatigue and rough terrain. Entrepreneurship is very similar. What makes this journey tough is lacking a system.
My son is selling tea cakes, which I help him bake and package. Several students have told him they didn’t have any money and would “get him tomorrow” so his profit was short. He was concerned about their hunger. That’s sweet, right? Sweet, doesn’t equal sound business decisions. Sorry. No, I’m not. My question to him was, “Are you running a non-profit or for-profit?” Slightly offended, he proclaimed “for-profit.” I told him to decide how he would operate. That was a non-profit reaction in a for-profit effort.
At its’ core, the issue was planning. He gave away product because he hadn’t prepared for the situation. I told him to tell those who say, “I will get you tomorrow” that you will get them tomorrow. Set one aside for them and approach them the next day or recommend that they pool their money with someone else to purchase what they want. Butter, vanilla extract and eggs are not free. Neither are the supplies needed to operate your enterprise. Preparing ahead keeps you from a panicked reaction that you might regret later.
Below are a few tips that I have learned through my years of entrepreneurship:
Examine your system.
If you offer a product or service that is highly customized (i.e. personalized items or websites), require a deposit before rendering any service. Beyond an initial 30 minute consultation, my time is no longer free in a one on one context. When someone expresses desiring to work with me, I require a deposit of 50% before the full project/service is given to the client the remaining balance must be paid. The deposit percentage you choose will depend on your industry or service. Ensure that your deposit covers any initial cost that your business incurs including your time. If the person decides to not complete the purchase, the project will not be a total loss.
Make your policy standard.
Your agreement policy should be standard regardless of the client. Friends, family, members of your faith community, and total strangers should have to follow the same rules of engagement. This is tough for those who operate more with their heart than head. Sometimes people take advantage of kindness. Keep business business. If they can’t follow the rules of engagement yet, express how wonderful it would be to work with them and that you cannot wait to do their project when they are ready.
No, is okay
If you are struggling for clients or nervous about making the next sale before the next month’s bills hit the mailbox, you will make decisions out of desperation. Desperate makes bad decisions. Not every client is your client and that is okay. Market well and engage those clients who can be a good base for you. If they have a good experience, they will return to you when they need your services again. If you have an enjoyable experience with them, you will want them to return.
Those who don’t show up or can’t pay for your services/product, aren’t your clients yet and that is okay. Don’t try to force them to be a good fit. If you spend your time and energy with those who are not ready to work with you, you will miss those who are ready. Save yourself and them the frustration. Yes, you have bills but you will pay more for the bad client than you will earn, trust me.
Remember: You set your value. You teach them how to treat you. Most importantly, you CAN do this.