Another Small Business Note – The bank of Rich

Richard Charpentier Notes from Rich, RLC Design 10 Comments

All sorts of interesting stuff comes across the desk of the small business owner. Odd requests a plenty. “Waive the sales tax, can’t you discount this, can you review 500 of my images for free……?” Well, those are just a few examples.

There’s one particular request that I no longer entertain, and frankly it’s an annoying one.  What is it?

The request to do the work for a client, provide a product, and get paid later.  I’ve done it a few times, and each time I’ve been burned.  Carrying balance for folks for months on end……  Yeah, mistake.  But I’ve learned from the mistake and won’t soon make it again.

When you provide services and products prior to payment you really set yourself up.  And you end up taking on the role of a bank or creditor.  Really, small businesses have no room to act as the bank you know.  Most of us need to see a bank for a small business loan, but in this market we wouldn’t get very far.  So why is it so many clients feel comfortable in asking us to take on the role of a bank?  I don’t know, and I don’t do that with any vendor I deal with.

Lately what I’ve been telling folks is simple.  If you use MPix or any other online reproduction house, you pay up front.  Upload your images, size them, select your paper type, punch in your billing and shipping address, and then provide your credit card information.  You’re billed right then and there, and it shows up pretty quickly on your statement.  Let’s face it.  Your order takes away supplies and time from the business immediately.  How long should they wait for payment?

So, yesterday I got what could be an amazing order.  A good bit of canvas.  But the client’s client (I think you can follow that) is a well to do business concern that likes to pay after receipt.  So this morning I’ve got to call the client and let them know, I can’t do the job without payment up front.  Burned once to often, and I can’t act as a bank on behalf of a well to do business concern.  If they’re well to do, why would they ask a small business to act as bank?

Good question I think…….

In the end, I might not get this print job over this, but doing a big print job, shipping the product off many states away, and then hoping payment comes just doesn’t sound like the smartest business move anyway.  It’s only a valuable job when the money gets deposited into that business account, right?

Comments 10

  1. you’re absolutely right, Rich. Jason, Kristin’s husband, did a HUGE landscape job for Patrick Ewing, the basketball guy. His assistant said he doesn’t use his own name when he buys things, of course, he uses a pseudonym. Eventually, he paid up — but it took lots and lots of calls to his “assistant” and plenty of TIME before Jason got his money. The rich are never in any hurry to pay for goods and services.

  2. Post

    You know Sharon, back in the engineering days when money was never an issue I never had a problem paying. Didn’t try to negotiate with folks either. The price was the price, and if they were providing me with goods and services that I couldn’t create myself I was happy to pay.

    I think that the issue has something to do with recognizing the value of other people’s work beyond the value of what you do. I don’t know how to do construction, and that doesn’t mean I discount a construction worker’s value. Just something I’ve picked up on over the years.

  3. Why not have them pay in halves, the first half to cover your costs (and maybe some profit) and the second is your profit (plus). That way you get the client’s good will, but at least don’t risk losing money on the deal.

  4. Post

    Not a bad idea Bill, and I have explored it. 🙂

    2 of the outstanding invoices that I have (8 months old now) were exactly that scenario. The second half has still yet to surface. In total, I’m currently sitting on about $1200 in outstanding invoices that have run more than 6 months. That’s a lot of money that I don’t have to buy new canvas, inks, etc, or better yet, pay myself.

  5. Been in the photo lab business for 30 years, been burned more times than I care to admit. If someone can’t give you a credit card, why would you want to give them credit? We have found that even large fortune 500 companies use credit cards. Beware the agency or designer line…”You’ll get paid as soon as I get paid”. Unless I’m mistaken you are not a bank. I bet your suppliers don’t want to wait to get paid until you get paid. Why should you? I’ll get off my soapbox now.

  6. Post


    “You’ll get paid as soon as I get paid,” is one of the lines I got last year as I was learning, and is one of those outstanding invoices I have sitting. I know the artist got paid, but then got the excuse they needed the money for their bills…..leaving me feeling like I must be the bank. Glad even someone who has been doing this much longer than me has seen this.

    Jason, you’re right on. It’s a business first, and the photography / art takes a back seat. That’s not a bad thing, I mean really, you do have to make a living. 🙂

  7. Rich, You’re a nice guy. Some people interpret that as a sign of weakness. A sorry truth, I think.
    State your policy, take a stand, and then stop talking. It’s amazing the power that moment of silence can produce. They say that the first one to speak loses.

    I require a 50% deposit and balance on delivery. I do agree to layaway-type deposit arrangements, but won’t begin the work until I have the full 50%. Balance due on at delivery. I’ve known some who won’t even deliver w/o cash in hand.

    I think “good will” has it’s place, (too bad it’s a smaller place than decades ago), but doing business nowadys can be about survival.
    .-= Paul krause´s last blog ..This is a test of the… =-.

  8. The 50% deposit, 50% due upon delivery works well for our personal clients. For our larger clients, we bill net 10 days, and for our largest clients net 30 days. However, one of our largest clients, that we’ve had for over 35 years, has recently been over 5 months past due on some invoices. We made the decision to put them on COD, despite the owner posturing about not giving us any more work. Getting work from a client that doesn’t pay is worse than having no work from that client at all. Now we’re holding back all of his current jobs until he pays us.

    Quite frankly, your best bet to insure payment is to do the 50% deposit, 50% upon delivery. If you don’t hand their goods over to them until they’ve paid up, you’re in the position of power. Once you hand the stuff over to them, you’re at their mercy unless you have something else of theirs that you can hold back.

  9. I think that when it comes to something like photos the customer knows what they are getting, they chose the photo to be printed or canvased or whatever. They are getting a particular photo that they want, so they should pay for it now, if they can’t afford it now then they should buy it when they can afford it. The photos aren’t going anywhere.

Leave a Reply