I do all the “right things” including draft up a letter of agreement, which generally outlines what I will do for them, how much it will cost, revisions (if any) – that type of thing. Pretty normal stuff. It also outlines what they will do for me so that I can actually complete the job: specifically, provide info as requested, names and phone numbers of contacts, and make payments in regular increments.
Here’s where I recently made the error that cost me in a moral sense: I forgot to question a client about their financial status in enough detail. Now you might say, this is none of my business, and in a sense, you’d be right. In most cases. For example, I’d never dream of asking this question for a straightforward press release: in fact I take care of it by asking to be paid up front.
And it wasn’t about ability-to-pay anyway. I should be clear about that.
I simply don’t like to see my clients fall on their faces. I want them to succeed. When I write or edit for a client, I tend to get passionate about their bright new business idea. I enthuse, I encourage, and I cheer-lead.
And, as I recently I found out, I also make dopey assumptions about their finances. By the time I learned that a recent business plan client had no job, no pension, no assets and no collateral, I was well in to the plan. I’d done lots of research on a particular industry, market prospects, competitors, global outlook – in fact I’d learned a great deal about this particular market sector. I thought the concept was loaded with promise. I’d beavered away faithfully envisioning the start-up of a booming enterprise.
I’m not a complete moron, I should hasten to add: my client said he was retired, and I assumed, quite naturally, that he had a pension. But I failed to actually ask.
Another assumption I’d made: I thought the client had some idea about what lending institutions require before they’d give out a thin dime: some indication of how they’d repay, and something like a house or other assets to guarantee the loan.
Otherwise, you may have the most brilliant idea in the world and you may even a supplier all lined up with goods to put into your hoped-for warehouse, but if you haven’t got some financial platform, income, pension or form of security, you’ve got nuthin’.
Gosh, I sound like Kevin O’Leary.
The naked truth is this: the most beautifully-written and researched business plan (and mine tend to flow quite nicely, thank you very much) won’t amount to a hill of beans once you hand it to the lending officer. I can just imagine a banker glancing quickly through all the lovely verbiage about future market trends and product warranties, only to come up empty at the bit where it says how you intend to repay the bloody loan.
So, I have learned these things:
- ask how they make a living
- If they say they are retired, ask about their pension
- ask if they own any property, or already have investments
- ask if they’ve been turned down before, and if so, why
Knowing what I know now, I would have kindly and politely turned down the job. I don’t like finding myself in a crisis of conscience.
A business savvy friend said recently: “Jane, they asked for a plan, so give them a plan. It’s not your responsibility if you now see they don’t have a snowball’s chance in hell of getting their money.”
Except that if you’re me, it is.