A Customer Doesn’t Pay Your Micro Business. Dollars and Sense Show #25

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Show #25 What to do when a customer doesn’t pay your Micro Business.

In this podcast, Carol Topp offers tips to micro business owners on what to do if a customer doesn’t pay you.

runningmb_medThis information is covered in more detail in Carol Topp’s book  Running a Micro Business




Most of your clients will pay when you hand them a bill, but sometimes they forget or do not have a checkbook with them. In those cases you need to remind them.

  • Send another copy of the bill, statement or invoice. Email is a good reminder or use regular mail if you must. This usually does the trick. Most people are forgetful and not out to cheat you.
  • Call the customer and ask if they received your bill.
  • If a customer is late paying you, do not do any additional services for them.


Payment Policies for Micro Businesses

After you’ve been running your business for a while, you will come up with some payment policies that work well for you. A few common payment policies include:

  • Ask for some money up front as a down payment. This is a common practice if you will be doing a large job for a customer. It is very common to ask for a small amount, perhaps 10-20% of the total price before you begin work.
  • Progress payments. Ask for payments as you do each part of a large job. For example, I asked my graphic designer to do five tasks for me. He billed me after three tasks were complete and then again when the job was finished.
  • Charge a late fee for customers who are more than 30 days late in paying you. Your late fee can be a percentage of the total cost (5-10% if customary) or a flat fee such as $10.
  • Have a policy regarding bounced checks. If a customer pays you with a bad check, your bank may fine you when the check is deposited. It may not seem fair, but it is a common practice. You, in turn, should charge the customer at least a $10 fee to cover your bank fees. Some stores charge as much as $25 for bounced check.
  • Consider marking up your price to accept Paypal or credit card payments. Paypal and credit card companies typically take 2-4% of the payment as their fee. Most business owners usually consider these fees as part of doing business, so make sure you take the fees into consideration when pricing your products or services.


Join Carol’s other podcasts for micro business owners on Creating a Sales Presentation and Making the Sale.

Learn more about starting and running a micro business at MicroBusinessforTeens.com




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