What would you have done if you were me?
A little over a year ago I received a phone call from a lady outside of Seattle, Washington sharing that she always dreamed of starting her own business. Before I could ask any questions, she told me she decided to call us because she heard we work with many start-up niche small business owners from a friend who attended one of my marketing workshops in Las Vegas.
I asked her our standard discovery questions and we determined she was a fit on every question so far. Then I asked her if she had established a budget if we were to partner together on this project? She paused and said to me, “I can find a way to get the money.”
How would you have responded to her answer?
Let’s just say you continued your conversation with my prospect and after learning more of her current budget situation you decided to say, “I just don’t think this is the right time for you and I to work together based on your response to my budget question. I just don’t want you to be in a tougher financial situation by spending money on our project.”
Then she says, “please don’t deny me the opportunity to pay for your services if I believe you can help me start my dream business.”
Now what would you do?
Share with us in the comment section below.
Matthew,
I face this issue often. I so want to help people – all people, all the time, and many times there just aren’t funds budgeted for marketing efforts. I never want people to not be satisfied with what we can do for them, but if there aren’t adequate funds available to achieve specific goals, then all is for naught.
So, what’s the answer? There are only so many hours in a day and we, too, have to be sure that we’re spending our time on things that generate income, feed our families, etc.
And I don’t have the answer. Other than that, given the situation above, I would have been honest and prepared a proposal setting out exactly what you proposed to do and exactly what that would cost. If she was able to come up the necessary funding, I would have her sign a contract agreeing to specific terms, take a hefty deposit up front and get started.
Now, what did you do?
Great Question. I can relate to this story. In a situation like this I like to evaluate the passion of the individual and their work to determine how invested they are and how invested I should be. If the passion is clearly present and the individual has a clear skill / talent, then I invest a little time to help them focus their strategy to raise money or get their presence going online.
@Shelly Thanks for your insight on what you would do in this situation. Please allow me to ask a few others that I really respect, like you, what they would do to gain their insight and I promise to tell you what I did in this situation.
Last year I had a prospective client who, to be kind, had “eyes that were bigger than his stomach.” He had started a business but had limited cash flow. He needed marketing and PR help, but didn’t have access to the funds to do it right.
I was very upfront about what it would cost–he seemed to have difficulty grasping that not only did he need to pay for advertising, but he had to pay me for creating and executing his marketing/PR plan.
Had we proceeded with the budget he had, I knew that he would have found his results mediocre at best; I didn’t think that it was fair to him or me to continue. It was my professional responsibility to withdraw from consideration.
He was frustrated by my withdrawal and said so, but I sleep well at night knowing I didn’t take on a doomed enterprise in order to make a quick–but small–buck.
Hi Matthew,
Before I give up on the situation, I explore if there are any ways that the business can quickly start earning to finance itself. What I mean is … Is there a small product that can get to market quickly, a bridge product that can start earning for her while she builds a strategy. If so, I send her off to do that. If not, I explain that the energy it takes to start up in this economy is too high a barrier to go it a lone without some small financial foundation to keep things on track.
@Alex and @Frank I’m so glad you both can relate to this situation and offer your opinion.
Here is what makes it tricky from my perspective:
-We as small business owners can’t afford to work with clients who may not be able to pay us.
-I believe that small business owners have a moral responsibility to not contribute to someone’s financial distress. Think home loans fiasco.
-However, I believe in the power of seed money. You know the money that you receive when you believe in your heart you must pay to receive services which you believe will help you to achieve what you want and need. The prospective client says, “I can get the money. Please don’t deny me this opportunity to pay you for your services.”
It’s a tough call.
@Liz Your comment to this post shows why we come to you for guidance. Many thanks.
Great question Matthew…All service providers probably find themselves in this situation more often than they care to. As some of the comments have already noted, there is only so much time in a day, so hard choices must be made. That said, we added a few components to our business model a few years ago that allow us to more broadly accommodate this situation within a sound business framework. We added a venture practice and a pro-bono practice. We have strict criteria for both programs, but find them useful in developing clients who don’t fit typical engagement structures.
It’s a great question, Matthew. I faced this recently with several people while enrolling our year-long program.
If someone got to the point where they said, ‘I can find the money.’ My answer is- “Great- find it! Let me know when you’re ready to go.”
I also ask questions about: “How quickly does this need to pay of for you? In other words, what’s your financial situation? If you pay us, does that put food and housing at risk for you?” I point someone at lower cost services because I just don’t want that kind of karma on me.
I also think there’s a difference for me between someone in their 20′s who maybe takes on debt and flying leap on their own, versus someone in their fifties who has a family to support, a mortgage to pay, and a lot of things competing for his/her attention in life.
I can’t make decisions for someone else, but I do know when something feels risky to me. I wrote a blog post just recently about it: Showing Clients the Door”- I can’t remember if you saw it or not.
Matthew–this is not to say I haven’t taken a chance with a couple of clients–but I carefully weigh what I think is their ability to grow into profitability. It is a tough call…a gut check.
I do hold out hope that a risky client I have now will make it over the hurdle, and I will be proud and financially rewarded when he does.
I generally err on the side of less grief all the way around. As others have said, time spent on a client that I judge to have little chance of growing takes me away from the clients and prospects that put food on the table for my family.
Good luck!
@Mark I like your “if you can find the money, let’s go” comment. The qualifying questions you offered are great. I’ll add them to my own questions. I love your “Showing Clients the Door” post. Dude, we must get coffee soon as Portland neighbors do so often.
@Mike Myatt I love the idea of pro-bono practice and venture practice. So simple, but brilliant. Makes total sense to me. It’s different than saying, “okay, we will consider eliminating our fees and doing it for free” vs. “we have a practice dedicated to paying it forward with select individuals and organizations.”
Love it!
@Alex I tend to err on the side of less grief all the way around, like you. I get what you’re saying about taking a chance on certain people after waying the situation carefully.
As an aside, I lived in K.C. for 2 years. Our middle daughter was born in Blue Springs, MO.
Thanks for taking the time to offer your guidance. I really appreciate.
This is such a difficult issue. It demands some intuition knowing whether or not the person who “can get the money” is digging a deep hole for herself or whether her expectation of your services is in line with a financial return that she can reap from your help.
It’s always hard to dash someone’s hopes and dreams. What works for me (at times–not always) is to develop a proposal with the full cost for doing the project as well as an a la carte menu with price tags for each aspect. I’ll ask the client what kind of return they require to spend that kind of money. It starts the person thinking in realistic terms, rather than expecting hockey-stick growth for their business based on wishes and dreams.
If the client can answer the tough financial questions about what will happen if the programs fail, then I go ahead and try and make their day!
@Mary I can see why your site is called Sage Advice Marketing.com by your response to this situation. I find sage wisdom in everything you said.
Mary, I want to thank you for taking the time to comment. I’m clicking Follow on Twitter now and headed to your blog. Be Well.
Hi Matthew,
No hesitation – I would engage her. Here’s my logic:
Her responses to your questions are strong.
“I can find a way to get the money.”
“please don’t deny me the opportunity to pay for your services if I believe you can help me start my dream business.”
These are assertive, possibility-based answers (even without hearing her voice tone etc).
She could have said:
“I don’t have any money right now, but I’ll see if I can get it”
“I was hoping for a discount.” etc
She demonstrates a strong, street-smart attitude and gutsy approach in the way SHE handled YOUR questions/’objections’, which in my books is the foundation stone of entrepreneurship.
Best to you, Robin
When clients cannot afford my fee, I take these approaches.
1. I say “let’s get creative” and see if there are clients nearby who would also be interested in my services and who can pay for half. For instance, I might invite clients in suburban Philadelphia to contact neighboring organizations (I work in the public sector) to see if they’d like to share costs for a consultation with teams from each organization.
2. I reply that, although I cannot offer this client my services directly, I will bear in mind that they are looking for my services and let them know if I will be in the area anyhow. I would still need to charge them my consulting fee but would then be able to waive travel expenses.
3. I suggest that they start with my online resources (web site, ning, Twitter feeds) and then get back in touch when they can afford more.
In addition, I am developing for-fee online learning modules for those who cannot afford to interact with me in person. I don’t believe these modules will substitute for in-person work, but they will indeed provide some assistance (while also serving as another revenue stream for me!).
@Robin and @Cathy I sure appreciate your insight. Robin, I love how you confirmed with me that her responses to my questions were strong and not one of trying a power play. Cathy, I love your guidance about offering a few different choices ranging in price and time assisting our clients and us in finding the right service offering for each client.
Matthew,
First, this is why every consultant needs to include a product ladder in their products/services mix. As your services and the clients you gravitate to change over time, its almost inevitable that your prices will increase and your time will become less available. It isnt just about price, but about your ability to scale (adults dont scale well) as well as your ability / desire to serve the people that you *really* want to work with.
If there’s a product ladder in place, you have an entry level for those without the necessary budget. More importantly, the product ladder gives you a way to groom prospective clients to climb the ladder and get themselves to the point where you can work with them.
Second, if you think back you when you started your business, if you *knew* that working with someone who had *the* solution for your situation was out there and they refused to work with you because of their perception of your finances, how would you have felt? Im guessing you would have walked over broken glass to convince them to help you. We have to be careful not to judge others through our own lens, though there is a tipping point – and I think youve gotten plenty of advice in this thread about that:)
Finally, there’s always a way to restructure your fees if you really, truly want to find a way to help someone you believe in. Instead of an upfront fee, you could ask for a piece of their gross increase over time, or any multitude of other structures that reduce their upfront cost while still getting you paid.
Hope this helps:)
Mark
One other thing I neglected to mention – if this happens frequently and you want to find a way to help folks in this situation, group coaching might serve as a rung on the ladder. It gets the client a piece of you, allows you to leverage your time and often uses the power of the mastermind (Hill) as well.
Mark
@Mark First, thanks so much for taking time and interest to comment on this post. Secondly, I love what you said about viewing our clients through our own lens. And yes, I truly believe we can structure our fees to meet a deserved client right where they’re at over an acceptable time period.