How to and why ask for the money

Version 3
    "If you can't ask for the money, you don't deserve it".
    I'd like to take credit for that axiom, but someone else thought of it first.

    We've all been there. We're talking to prospects and helping them in many ways, even though they haven't paid us a dime since we first met. At some point, we have to delicately bring the conversations to a conclusion. The prospect either becomes a customer or you stop helping them for free and move on to another prospect (or, shock of shocks, you help an existing customer for free).

    Every business, at some point, employs the services of an attorney. Last week I met an attorney. She was a very sharp lady, and with a track record of success. I paid her $275 for a one-hour consultation. It was worth it, of course, but what struck me was how comfortable she was about telling me I was going to pay for the hour she spent with me. What I learned once again was that, if you want to be successful in business, you need to get good at asking for the money.

    -- If they don't pay for it, they won't value it --
    If you give your time away for free, your prospects and clients won't value it as much, and they are more likely to waste more of your time. Just like people who get money for free tend to squander it faster than those who had to earn it.

      • No one will be offended --
    When a client is faced with having to pay for your services, they always have a choice. Assuming you do not have a monopoly, you cannot force them to buy what you have to offer, so they always have a choice to either find an alternative or pay for your services. If they get offended and storm off, think of it as a favor to you. You can't build a business on clients who don't think they should pay you.

      • If they won't pay for it, you shouldn't be doing it --
    Getting the cash is not the only reason to get paid. Asking a prospect to pay for your services is a great way to validate that what you have to offer is of value to them. When they agree to pay, you know it is, and that is a very important thing to know in your business.

      • If they owe you money, they will avoid you --
    Let's say there were two butchers in the village. You owe one of them $100, and you're on your way into the village to buy some sausages. Which butcher do you go to? You go to the one you don't owe money to of course.
    I've noticed on a number of occasions, when I pressed a client to pay their overdue amount, right after they pay me they call me to ask moe to do some more work. My guess is that, for the weeks they were delaying paying me, they were less prepared to ask me to do some more work. That's business I may have lost if they hadn't paid me for the earlier work, so insisting you get paid for past work is essential.

      • Asking for the money is good for your client too --
    Making sure you get paid for the time and work you invest in your clients means you are more likely to remain liquid, more likely to stay in business, and therefore more likely to be around to service your client in the future. When you insist on getting paid for what you do do, you are sending a clear message to your prospect that you fully intend to protect and grow your business.

    Some time in 2002, the CEO of my company Bocada and I were negotiating with a very large prospect. You know the company, so I won't mention it by name, but it was and is a large high-tech hardware company. They wanted to get a free lincense to our software product with the argument that "we are such-and-such and testing your Bocada software product is payment enough for you". My CEO's perspective on this was very educational for me. He told them that if they didn't want to pay money for the software, he recommended they should not use the software. His argument was, it was bad for Bocada to have customers using the software who didn't believe in paying for it. Not alone for the sake of the money itself, which of course is important, but paying for it laid the proper foundation in the client's company for the long term healthy relationship between vendor and client.

    -- When is it OK not to charge? --
    At the early stages of growing my company, I wasn't exactly sure what business I was in. In addition, there were a few "holes" in my knowledge and my expertise that needed to be filled before I could say I really knew what the heck I was doing. I was very upfront and honest with my prospects about my limitations. Sure, you always learn from your clients, but at the early stages, the learning curve can be so steep it adds some risk to the client's aspirations, so I would be very clear about that from the beginning. "I'm giving you a rock bottom price for your patience with me while I learn a lot from this project", I would say to my prospect.
    But once you get on top of your game, the time comes when you need to "harvest" the often costly investment you made in your business over the early years. You need to get paid.

    • -- Put structure into service offerings* --
    Once you know the value you bring to your clients, put some structure around it. I offer first-time prospects a quick telephone conversation for free, where they can get a strong sense of what I can do for them beyond the telephone conversation. Beyond that, I offer a two-hour session and/or a whole-day session, each of which the prospect must pay for. And during that first telephone conversation, or even before it, I make it quite clear that the phone conversation is "free" and subsequent sessions are not.
    I also schedule these introductory conversations so that I have a legitimate engagement following the short, free introductory call. For example, I might have the free thirty-minute conversation beginning at 9:30am, followed immediately by a 10am visit to a customer. That way, I set the tone, at least in my own head, to expect a hard stop at the end of the free thirty-minute session.

    -- When friends ask for your services for free --
    This is probably the hardest one, but the good business rule that people shouldn't use the service if they don't pay for it still applies. If I meet my doctor at a cocktail party, I'm not going to ask him for a prostate exam, and I don't expect anyone else at the party to ask me for an SEO-focused examination of their website.
    A good way to get through the "free consulting to friends" issue is to explain to them from the beginning that it is a good, disciplined business principle also for them, not to give or take free services beyond the appropriate introductory communication.

    Remember, your time and your service is valuable, or you wouldn't be in business for long, so don't be afraid to ask for the money. In the end, your clients will love you for it.
    At least, the clients worth having will.

    Best wishes.
    Liam Scanlan