A recent survey of freelancers found that about half of the respondents reported having trouble being paid by one or more of their clients and that this nonpayment represented, on average, 13% of their annual income. Of course, there is no surefire way to predict which clients will give you trouble on the collections side. But it’s never a bad idea to prepare for (or even outsmart) this scenario by using a good contract, requiring a deposit, or references. Here are five telltale signs shared by Wingspan contributors to help you identify clients who might not pay you right away—or ever.
Most diligent and fair-dealing business people will carefully review anything they sign. Or at least take care to be very clear about what is being agreed to. Beware the client who seems to always want to “keep things casual.”This may be a concern even if you have a well-drafted, detailed contract. They may come up with disingenuous, after-the-fact complaints about your work, or they can simply force you to expend time, energy, and even money on lawyers, just to get paid. If your client thoughtlessly signs your freelancer contract without even looking at it, it’s fair to wonder whether they plan to comply.
Some clients want a “sample” before they’ll agree to pay. This is another red flag. Don’t give up the goods. It suggests that maybe the client doesn’t even have the budget for your work. Maybe your contact is still trying to convince their supervisor that the project is worthwhile, or perhaps they never intend to shell out at all. Either way, run.
Another, more subtle sign of non-paying clients is a constant projection of their own influence, and an overselling of all the non-monetary benefits of your relationship. This is a sign that your client might not have much cash to spend. They’ll tell you that this will be a fantastic opportunity to market your freelance brand; they’ll make vague promises of future introductions; they’ll suggest that your compensation will “scale as the organization grows.” These are all favorite taglines of bootstrappers who have to promise the future because they don’t have anything to give in the present.
A common experience is a new client who calls complaining about the last guy working on the project. Sure, maybe your predecessor was a bad apple. But keep in mind that you’re only hearing one side of the story. Don’t forget the possibility that your client wasn’t holding up their end of the bargain, and consider this to be a signal that you should take the usual precautions.
Employers perform background checks of prospective employees. Lenders do credit checks of new borrowers. Tinder dates Facebook-stalk their matches. Freelancers are well-advised to take similar precautions with new clients. BBB Reviews, Glassdoor, and other forums can help you get a sense of how scrupulous this business is. Of course, one or two bad reviews should be taken with a grain of salt. But where there’s smoke, there’s usually fire.
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