About a 2 months ago my husband’s client (of 2 years) purchased several plasma tvs for an install job and wrote a check… a check that never cleared. A check for thousands of dollars. Where is the client? Jail. How does that effect us? Well, fortunately there’s lots of other people buy tvs from us so Matt’s recovering, but most small businesses couldn’t take such a substantial loss… and in today’s economy why should we have to deal with dishonesty AND hard times.
I just read this great post about How Wholesale Businesses Make Money by Startup Princess Jamie (of highly successful Jamie’s Painting and Design) and I want you to all read her honesty, her detailed description of what it really takes to get payment from people and how it effects small businesses when people don’t pay.. Why should you read this? Because you need a plan, you need many distribution channels, many sources for income, and because, hopefully you’ll never need to know what to do if someone doesn’t pay you…but just in case…and because we all need to vow to help one another succeed. To look for opportunities for one another, to make referrals, to create collaborative projects and invite others to participate in press ops, etc. This is the time for community, sharing, and for Startup Princesses to really connect to encourage success.
Anything you want to share here?? We’d love to hear how you’ve recovered from loss or kept your company going in hard times. What other thoughts??
I know exactly what Matt feels like! I quit my regular job and worked hiring bloggers and paying them through another company. Due to a lot of circumstances – including the owner of the other company going to jail – a check for thousands bounced 2 weeks after I deposited it. My business account was not only emptied of everything in it, but it was in the negative. Plus I owed the bloggers. I was getting fees, they were getting fees, and it was right before Christmas.
Eventually the guy (who was in jail) paid and even paid my fees but he was flaky from then on. He acted like I owed him something and tried to discredit me for the work I’d done for him previously. It was stressful. So I got a job, which I’ve had since.
I’m developing my web sites so they will make more income – this is passive income that I don’t have to do much additional work for. It’s one reason I love the Internet – I put up a link and I get paid on sales that happen months or even years later.
Janet
Janet Meiners Thaelers last blog post…A Unique Business Idea – or Form of Therapy
What a bummer. I think it’s hard times for everyone, and I’m looking forward to other’s advice. Right now I’m focusing on peace. At least I’m trying…
Michelle McCulloughs last blog post…Touchpoint: The Annual Event for Women Entreprenuers presented by Startup Princess
so true! we can’t have ONE avenue! Jaime’s article is GREAT….in fact, she has touched on MOST things you want to think about before getting into business. Jaime sure knows how to challenge this economy,…thanks for posting!
sarah janes last blog post…Handmade Christmas.
We had something similar happen a few years ago in our tiedye business. We got an order from Russia, got the credit card verified through our payment processing company and OUR bank so happily filled the order amounting to $700 with shipping and duty costs. We sat and waited for 6 months, afraid to use any of the money for fear it really was bogus after all. But then a crisis happened and we needed the money to pay our rent so we used it. Right after that, the true owner of the credit card who was nowhere near Russia demanded the chargeback. The bank took everything we owned and almost ruined us. Fortunately, we always run really lean and on a cash only basis so with the back inventory we already had, we were okay after our next event. But the two weeks in between were miserable.
We’ve never forgotten the lesson we learned and are much less trusting, I hate to say. I don’t want to think that people are just evil or out to scam, but there are those without a sense of integrity or conscience, i guess.
I do know that there are a lot of small businesses gambling on processing time between writing a check and receiving payments. Wholesalers especially. There just isn’t any credit out there for many of them that will allow them to get a Net 30 or even a Net 10 to soften the pain of doing business. It’s one of the reasons my husband and I have to deal on a cash only basis ourselves – a Net 30 account can make all the difference in the world for a small business, since there are times cashflow is not what you’d prefer and the opportunity for a big show is one you need to take to keep going.
Oh, I so feel your pain. This (and Jamie’s) article touches on the worst part of business, in my opinion. I absolutely hate hounding people for money. I hate the sinking feeling as bill after bill is sent with no response. It just stinks. Trying to absorb any amount of product not paid for is tough.
Thanks for bringing humor to a very troubling problem most retailers/wholesalers face.
Being able to trust is hard to do and then trusting sometimes is even worse. My very first employee for my trucking company took more than I can imagine. We were in my home office looking online for a trailer for the Semi. While looking online I went upstairs to greet my children from school, then returned downstairs. I didnt think anything about it because I had known this person for a year on a business basis. Two weeks later the credit card in the truck was taken and charged up to the balance on it. $1000.00, an $800.00 check had been cashed and the worst part… my sons birthcertificates and social security cards were missing. I can replace the money. But you cannot replace get new social security numbers. I have to pay for their credit and activity to be monitored basically forever.
It made me soo sick to think that there are people like that.!!!