Non Payment for Designs

[MidNite]

What do you do if you create a site, have it up and running, the client has no changes desired, and the client does not pay?

My partner wants to shut off two sites that have not paid us. I don't think it is a good idea.

But what does one do in this situation?

[ldyguique]

Non-payment is an issue for all business people.

1) Depending on how long it's been since the site went live, I'd send them a final notice that the site(s) will be removed unless payment is received "in full" by such and such a day;

2) Small claims court -- Even if I shut the site down, I'd take the client to small claims court. You did the work in good faith and are entitled to payment even if they decide that they don't want ongoing hosting.

Learning to do the business side of things, i.e., collecting monies due, is hard for many people. I was lousy at it in my younger years when I had a printing business. I still remember doing up an exceedingly expensive set of menus that were very time-intensive--lots of changes and add-ons during the design phase. The bill didn't fairly represent the sheer hours of time invested; however, it was more than the original bid that was predicated on a substantially lessor product. When the owner of the brand new restaurant wanted to play "I'll pay you "X" amount of money," when we delivered, we kept the menus and told him that they would be cut in-half and discarded. He freaked as grand opening was within the week; however, at this point, if I was gonna "be had," it was going to be on my terms.

That's when we created the axiom: "If a customer tells you that they don't care how much it's going to cost, it's because they don't plan on paying you."

[matauri]

The site shouldnt be live & running if final payment hasnt been made.

This probably sux in hindsight, but a good plan in the future is for:
50% upfront once project has been agreed on.
25% about half way thru project when you are presenting for appraisal
25% being remainder paid before site goes live (onto the server)

While its good to keep good relations with clients, it's another thing being taken for a ride. Speaking from experience....its best to stay away from that route.

[greeneagle]

Maturi Is right on. We will not take a job unless the client is willing to go 50%/50% or 30%/30%/30%. Earnest money must be up-front!

50% Earnest
50% on completion

30% Earnest
30% At certain milestones
30% On completion

You may also want to check out the quoting tools and other web development business resources on our site at:http://www.mountaineagleweb.com/Resources/Resources.htm

Good Luck
Ken

[Andilinks]

Money up-front serves two purposes. The obvious one is of course to provide good faith and intention.

But telling the client early-on in the design interview that money up-front will be required either closes the deal or sends the flakes running for the door. This holds down your sales costs.

When a prospect walks in and starts tossing around plans for a huge e-commerce website with catalog, content management, shopping cart, etc etc.. it is easy to get drawn into his fantasy.

When a sales person says "will that deposit be cash or charge?" the customer may not have been planning on a purchase at all, but this trial close can wrap it up quickly or give a better idea just how serious the customer actually is.

Andi

[rdeford]

Maturi Is right on. We will not take a job unless the client is willing to go 50%/50% or 30%/30%/30%. Earnest money must be up-front!

50% Earnest
50% on completion

30% Earnest
30% At certain milestones
30% On completion

You may also want to check out the quoting tools and other web development business resources on our site at:http://www.mountaineagleweb.com/Resources/Resources.htm

Good Luck
Ken

Haha this made me laugh. I know what you mean about 30/30/30, but it makes it look like you only charge 90% that way. I also charge in THIRDS sometimes. Once again, I know what you meant, I just thought it was funny how you wrote it.

[flood6]

I'm dealing with this same thing for the first time. Thank GOD it was only a small programming thing, $75, and not anything bigger.

I had someone outsource an osCommerce mod to me. It took about an hour and a half of research and about an hour and a half of poking and prodding before I got it to work. Not a lot of time in the grand scheme of things, but it sucks getting burned.

The person went on and on about what a great job I did. She said she was squaring the payment away immediately. Over a week later, no $ and not returning my emails.

I'm not going to post any information here, but I'll send you the URL if you PM me and we can hate her together, LOL.

[southplatte]

This always sucks for any business, and the methods listed in previous posts are great ways to do things, as long as one item is in place.

The development contract. Put it in writing, pronounce this as your professionalism, after they sign it, take your first payment and get your butt to work.

Will you still get burned, maybe, but doubful. I have ran every design job like this, with the exception of my first one. None of my local competitors require contracts or anything else, so I use it as a selling point. I am a professional, the contract backs this up, protects the client and myself for certain things and gaurantees they understand the payment options. There, it's in writing, and if issues arise, then you have this as evidence to back claims up.

[freddieb]

I'm going through this at the moment with someone who owes me $2000 since July last year.

It's going to court and I've opted for leaving the site "live" in case the client claims in court that the site "isn't there".

[ammonetbenson]

Don't forget that generating the spec is also work and you'll have a hard time quoting a final price before there's a spec. On very big projects, we ask the client to sign a precontract that says they'll pay a certain amount if we complete the spec and they then baulk at the price and go elsewhere. Even then, I've let myself be sucked in. I spend about 6 months working off and on with a respectable outfit in the UK generating a spec for a very complex system. A month or two into this I asked them to sign a precontract but they somehow never got around to it. "What I should'a done" was dump them right then, but it WAS an attractive project. As expected, they walked off with the spec and got the job done elsewhere.

[ITGProductions]

MidNite....... I think you got some GREAT FEEDBACK on your question from a variety of WebProWorld posters. Unfortunately you are learning a hard lesson. It's not always easy to ask for payment or a contract for services that you perform and hopefully if you look back to the time of your dated post the lesson will have already sunk in and have been learned. Everyone at some point learned that lesson, be it from actual clients or a business class.

Armed with the knowledge of a lesson learned I offer you this simple solution for the future:

Draft yourself a generic simple guidline (gotta have a starting point) {modified accordingly to your clients needs} about what you offer a potential client and your rate to achieve your clients objectives, be it be the hour or by the project.

Meet with and listen to what the client wants you to do for them. Be professional. Provide initial demo works or reference to like work the client wants you to perform. If a portion is out side of your realm - contact a subcontractor and remember to include his or her fee's to perform the task. You know your skills better then anyone else. Once you believe you can meet all your potential clients needs, seal the deal with a handshake and a retainer. If your potential client asks to "mull" it over that's ok...all is not lost. Stay professional. Do a follow up in a week or two - don't be to eager - Be willing to negotiate price [there are limits to everything - don't give away the farm.] but get a retainer before you fire up the computer and dive into a project.

Oh yeah...and try to stay stress free.

[ddemarest]

I have had to deal with this issue a few times. I agree with the other posters that up front money is a must. I insist on 50% down, 50% upon completion. I also define completion as when the site is "live" and available for public consumption.

In two instances, I had clients that paid for their sites and then stopped paying their hosting bills. I let that go on for 30 days, sending warning emails about interruption of service, then I send a certified letter stating that if they don't pay by XYZ, I will shut down the site. And I do. Its amazing how fast the money shows up.

Pull the plug - clients that don't pay aren't really clients in my book.

Good luck!