What To Do When Your Event Planning Clients Don’t Pay
More than 10 years later I still think about the client that didn’t pay me $5000 for an event I planned. At first it appeared as though I had dotted all i’s and crossed all t’s; I met with the client to discuss the event scope, had them sign an event contract that clearly outlined the terms and payment schedule, and provided reminders about payment due dates.
Unfortunately, I learned the hard way that sending email reminders, calling, and sending certified mail notifications doesn’t always work. At that time, I also didn’t have the extra resources to legally go after the client, so I had to move to ‘plan B’ to protect myself in the future. After all, I wanted to do everything in my power not to get stiffed again. It was a hard pill to swallow, and an (expensive) lesson learned!
As a small business owner, what can you do when your event planning clients don’t pay?
When Clients Don’t Pay
If you’re worried about your event clients ripping you off, there are a few things you can do to protect your hard work, business and bank account. Here are 3 tips to safeguard yourself when clients don’t pay:
Tip #1 — Review your billing practices.
As any business owner will tell you, building a business is about learning from your mistakes and finding a system that works for you. Instead of requesting a deposit at the beginning of the planning stages, have a payment calendar that divides your work into three or four payments. When each portion of work is complete, invoice your client. Then, once the payment is received, move forward with the next stage of planning.
Tip #2 — Charge a retainer.
Event expert, Simone Benson, suggests charging a (non-refundable) retainer rather than a deposit. She points out that it’s important that the client understands that it’s non-refundable before they sign the event contract. With over 36 years of running an event planning business, Simone advises (this is how she’s built a reputable and successful business) that you charge a 25 hour retainer (25hrs x hourly planning fee) before you start planning the event. If any portion of the retainer is not used during the planning phase, it’s rolled over to the event day hours (Simone charges a higher rate for event day management). She deducts her time from the retainer until it’s used, at which point she invoices her clients monthly for her planning time, which is due upon receipt.
This protects Simone’s time and business because it ensures she’s paid before the work is done and before the day of the event.
Retainers work the same as deposits, except they are not refundable, and this needs to be clearly stated in your event contracts.
Tip #3 — Don’t scream at your clients. Ever.
Whether you’re trying to resolve the issue on your own or through a lawyer, the situation is already tense and approaching clients that don’t pay with guns blazing won’t help matters. Figure out why your client won’t pay you (Do they have the money? Are they unhappy with your event services?) and do whatever it takes to resolve the situation. Approaching your clients with kindness and open communication is key when you’re dealing with clients who don’t pay.
I’d love to hear from you.
In the comments, let us know if you’ve been cheated out of money and what you do when event planning clients don’t pay? (Let’s keep our comments constructive)
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