Self employed, how to deal with difficult customers?

crystaline

crystaline

crystaline

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Ok, this is a bit long, but I would really appreciate people's advice.

I am self employed and make high end clothing. The clothing is made to order and is discussed one to one and then an invoice is given for payment.

Recently I have had trouble with a person who arranged an order and now hasn't paid for 3 weeks and come up with a myriad of excuses.

If I spend several e-mails discussing details of an outfit, investing time and energy into designing the outfit (sketching etc), only to have someone say they have no money and I will have to wait to they do.

If you were in a store you would have to pay instantly, if you bought online, you would have to pay instantly.
If you are invoiced, you pay OR you provide an explantion or further arrangements.
I am very understanding and will try to accomodate any genuine change of arrangement. However this person has done this twice, and the explanations are less than convincing - although they did eventually pay the first time.

I feel my goodwill is being taken advantage of and I resent this greatly.
If someone cannot afford something, I would rather they wait until they can, instead of me building it into my schedule.

Although I havent created two of the items, one of the items was 'purchased' ready made and as a one woman operation I don't have the financial flexibility to fill in gaps created by people who don't pay within reasonable time after giving a final confirmation.
I purchase materials, I invest in planning - time which could have been better spent elsewhere.

I would really appreciate other peoples opinions on this. I consider myself a reasonable person and try to accomodate individuals as much as possible (I have never had a problem where both parties couldn't agree on something), but where is the line?

Am I over reacting? Considering this is quite a big order, should I just accept the inconveniences and carry on, or should I make a stand in some way?

Thank you :)
 
If they have agreed to pay you could consider court action against them if you have proof they have signed a contract for the work you are doing. (You should have something).

Personally, I would introduce a deposit style payment for your work when you actually come to buy materials for a job, that way only committed people would be interested in taking it further, as people wasting your time wont waste their money, not much but a sizeable amount to make people warey of wasting your time.

Court action may be the only way to get money from someone not paying you, but you will need proof that they have agreed to pay you so much money within a reasonable time period.

Someone else will probably be able to offer better advice, without knowing much about your situation I can not comment that much, you could always try the CAB. (just seen your not UK)
 
ive found killing them and burrying them in the back of the garden to be most helpfull, ive left their bottoms sticking up so i can park my bike.


as for your problem customer, i would cut my losses to be honest.
 
by the way, what type of clothing do you make ? is it expensive ? i ask because theres a couple of things id love to wear that ive seen around but they are definatly "unique" single items and hence i would have to have them made.
 
It would be hard to get a signed contract, as most of the business is conducted online and worldwide.
Admittedly this is a big flaw, that so much is on trust. It comes down to looking at it on a case by case basis. :(
 
crystaline said:
It would be hard to get a signed contract, as most of the business is conducted online and worldwide.
Admittedly this is a big flaw, that so much is on trust. It comes down to looking at it on a case by case basis. :(
Click to expand...

I don't see how you could maintain a business on that basis, I would at least have an up front payment mechanism for the honest and a fall back deposit system to at least cover half the raw materials cost of any other order. Speak to your accountant though they may be able to give you some decent advice.
 
I'd definitely look at getting some money up front. My wife is a semi-professional freelance artist/illustrator - she usually gets all the money up front, unless it's a returning customer with a good payment history and then she's more flexible. As suggested, I would get a deposit to cover material costs or to cover the time you've spent in the planning phase.
 
locutus12 said:
by the way, what type of clothing do you make ? is it expensive ? i ask because theres a couple of things id love to wear that ive seen around but they are definatly "unique" single items and hence i would have to have them made.
Click to expand...

They are expensive compared to say , high street- but affordable compared to what some designer labels can cost.
The prices vary hugely though depending on the order. A wedding dress and a shirt will obviously cost very different amounts.

What items have you seen around?

ps. I do take deposits with the bigger orders. This order was odd though as one of the items was purchased ready made (discount sale) and then two smaller ones commissioned on top of that.
 
If the order was done over the phone you have a verbal contract, if done via emal, then you have a written contract, the customer is therefore held into the contract and must pay according to your company policy (if you have one), failing this, you should offer them a payment method, if this is refused then court action maybe required.
 
How much are we talking about?

You can either

1 - Small Claims
2 - Above £750 file bankruptcy against them

One or the other should give them a kick in the back side to start repayment.
 
For any freelance CAD stuff I do, I get some money up front. Only ever had one company complain about that - they went off in a huff, then came back when they realised that to get anyone else to do it was going to cost a lot more. Always seems to work well.
 
All business have to factor in non-performing debtors, as it's a part of life that some people can't or won't pay. The choice that you have is in how you approach them.

I would imagine that the absence of a written contract is not relevant. You have a course of dealings, in that you have been in explicit communication, on top of the contract of sale - you offer to treat (advertise at a price), you provide a service, they accept.

Currently, they are in breach, and, you are aforded remedies for that breach (though it's for you to follow up on them), be it reposessing the item, seeking damages or the actual price (possibly plus costs incurred).

Your choice (at a financial level) will be mainly decided by how much it will cost you (including time not spent making / selling your product, sales lost due to a reduction in goodwill, legal costs etc) compared to how much you stand to recover.

If it does go to court, it will always serve you better to have previously made sincere attempts at reconciliation. That's to say, legal action should be your very last resort. But, if you do chose to threaten it, you must follow through.

[Edit]

Obviously, ovary punching goes without saying.
 
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Its rather difficult, I have a few clients that have not paid and some that are just late because they cant be bothered. Not much you can really do except accept that its part and parcel of running a small business.

The outstanding invoices in my company would buy me a decent car :(
 
I agree with the above advice and add: 3 Tier Sanctions

letter 1 - Overdue Account (7 days to respond/resolve)
letter 2 - Final Demand (5 days to respond)
*follow with a phone call on the due date and write a record of conversation
letter 3 - LBA (letter before Legal Action) ( set a date to have the remittance of the funds in your account 5-7 days )

After you send the LBA you need to be prepared to take it to small claims or proceed with a solicitors letter.
Once at LBA, if you don't follow through you might as well write off the loss.

You can get a Solicitor to write a letter for a £Fee and that usually shocks people into paying.
If you goto small claims, press for court cost + interest.
Having the letters in court will sway it in your favour from experience.
After the decision you can get Experian to register it against their credit rating and it will affect a future credit check.

Harsh but fair. No free rides in this circus.
 
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