There is a special place in hell for “employers” who exploit the unemployed. And this trend only appears to have gotten worse in recent years. This is particularly frustrating for gig economy workers, since we’re usually bidding for short term work. Seriously? Just hire us or cut us loose.
It generally starts innocently enough. My first abuser was a neighbor, who needed a little “technical help” figuring out how to scrap stock prices and patch them into a special file format for his business. I didn’t think much of it at first – we knew each other, right? Sure, I’d like to hire you – can show me that you’re actually able to handle this task? A couple weeks later I realized I was 10 hours into a project with no paid deal. When I raised the issue with him, he ghosted me.
Getting Paid – No Romance Without Finance
I’m learning this kind of behavior is very common among small businesses. We need to reset the rules. Until you receive a check, a small business is never a customer. Period. They are a time waster.
The lawyers have this nailed. Want to speak with a decent lawyer? The initial consultation is often free. That takes less than an hour. After that, you need to pony up a retainer – and they’re going to start billing you for the time. Perhaps the lawyers know something we don’t…
My new policy is simple. You get one hour or one lunch of business development time. If I like you. After that, I’m charging a design fee for free samples. Which includes meeting times and any significant travel. If you think this is crazy, this is what the lawyers have done to these clowns for years!
The same goes for any drama about the bill. If we agree on a deal and you come up with “deductions”, we’re done. Please find a new provider. Pay me late? Please find a new provider.
I’ll tolerate a little bit of this from a large corporation. They’re strategically incompetent when it comes to paying people on time. But a small business? Never. This is a gross lack of respect for my services which is a leading indicator that they’re going to be a problem. Unlike a large company with broken processes, any small business owner has the capability to pay me instantly. The fact you are not honoring your obligations or are attempting re-negotiate after a fact tells me you’re not worth my time.
The True Cost of Client Drama
Here’s the fundamental issue. Time spent educating you or getting jerked around asking for payment is time I’m not billing. Plus any time involved in traveling to meetings or getting lawyers involved. Anything you knock off the bill with your little histrionics is coming right out of my earnings.
You’re cutting my rate, by as much as 50%. And wasting my precious time, usually daylight hours when I can actually call and meet people face to face.
Not to mention disturbing my flow and attitude for the day, because I don’t need to be thinking of your drama.
Congratulations, you are now likely my least profitable customer. I WANT to fire you as soon as I can and replace you with someone who values my services.
For the “Be Professional” Whiners
I can already see the LinkedIn comments. “Oh you need to be more professional, client is always right, blah blah”.
No. You Need to Grow a Spine.
That jerk just stormed into my office and grabbed $100 off the desk. Probably more like $300 – $500. And you tolerate this? That explains why your earnings suck. Get that jerk off the customer list!
The Consulting Referral Fee Scam
As annoying as small business people are, there is yet a higher power in my pantheon of hatred. The small consulting firm. More specifically, offers of an opportunity to “partner” with them.
Note: I appreciate the irony. I’m a consultant. I’m telling you to try consulting. And yet…. watch out!
To the unemployed executive, these people are seductive. Their backgrounds are frequently just like yours. They talk to CEO’s! They advise on strategy and do critical research. They’re connected with everyone! They speak (for free) at all the big trade shows! Why, this will put me back in the game in no time. Of course I’d love to go work with them on a few projects.
What you’re missing is any consultant worth his salt knows how to put on a good show. Most single person “strategy consulting” firms bill only a small percentage of their available hours. In fact, any firm with less than 20 employees is likely to have huge swings in their staff utilization numbers. There’s just too much churn in client projects. And they will never tell you this….
The conversation starts innocently enough. One of the partners suggests that you take a look at their capabilities as a prelude to a discussion about getting involved in some client engagements. A phone call is set up. Basically an extended sales presentation about what the firm brings to the table. Nothing outright wrong with that until… the bait and switch!.
“Ah, we don’t have any current engagement we can staff you on right now. But we could use a little help on the business development front with a couple of private equity firms that we know you’re connected with. We’ll pay you a commission.” I see. After I’ve invested a full hour into the meeting. To learn what you really wanted was for me to take this crippled product you can’t sell and get it done.
Should I mention that I’m married to an ex-consultant and the rate you’re quoting me is about one third what similar firms pay for good referrals? Thank you oh so very much for the “opportunity”.
My fundamental problem with that deal is I’m basically doing most of the work – the selling – and handing off most of the revenue. At a below market commission rate. A total waste of time.
These people have no shame, by the way. I was hounded for months after I landed a new job. By the same people that basically wasted entire afternoons of my time with their fake “partnership” discussions. World class time wasters. I’d encourage you to hang up on them.
Value Motivated Clients Who Pay Promptly
The point of this rant: there are a large number of people who are happy to consume your time as an independent consultant without paying for it. This frequently comes with the perception that you’re actually accomplishing something on the business development side. The reality is you’re accomplishing nothing, no matter how good you feel in the process.
Stop LARP’ing being a consultant, get these bums off your client list, and replace them with people who will actually pay you.
Compare that with a motivated client, someone who values what you bring to their business. Especially if they’re in a position to give you repeat business. Less time on marketing and payment drama turns into higher average earnings per hour (as much as 25% to 50% more, depending on the type of work). When you find such clients, treat them well and be ready to go the extra mile to retain their business.
There’s another point here: don’t completely discount the value of a well run gig economy platform which allows you to pursue business with minimal effort and ensures prompt payment. As much as I dislike their rates, simplified marketing and payment is key advantage of many platforms and agencies. None of these companies want to get caught short in the deal.
The less time you spend on marketing and collections, the more time you can spend on billable work. That can substantially increase your overall income.
