HCPC Ep 57: What To Do When Clients Don’t Pay

April 19, 2019

Running a business requires facing money issues – like clients who don’t pay on time (or ever.) In this episode Michelle shares how to gracefully handle such situations without compromising your own sanity or health. You’ll also learn where to find contracts meant specifically for a health coaching business, to cover to your butt and keep the energy around money positive.

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Transcript:

Hello there health coaches! I need to apologize right off the bat by the way, there may be some banging and drilling sounds during this episode because we’re having little home renovation done and apparently the contractor has chosen just this moment to start working outside my office. But this is life, right? This is working from home life, so let’s just roll with it and hopefully it won’t be too much of a racket back there that I don’t know if you’ve noticed yet, but running a business requires a lot of money stuff. Who do I mean by that? Well, we have to spend some money to invest in our business. We have to ask clients for money. If we want to earn any, we have to manage the money, we have to pay taxes on the money. And what about when things don’t go according to plan?

Does this ever happen to you? Just like raise your hand or if you’re here live telling me in the comments, does a client ever sign a contract? But then the money never shows up, they just don’t pay. Or maybe you hire someone in your business because this happens to and they don’t do the work that you paid them four or something goes wrong. In any case, it gets like into these sticky situations with money and I’m sorry to say it but it happens. It happens day in and day out. So today we are going to talk about the best way to handle it gracefully healthfully and maybe even with some panache if we hadn’t met before. My name is Michelle, I’ve been a health coach with my own private practice for 10 years and running. I also act as a mentor for my fellow health coaches and if you have graduated from the Institute for Integrative Nutrition, then you may have seen me in your curriculum where I teach about marketing.

So here is the question that came from one of our group members. She said my least favorite part about being a health coach is discussing money with my clients. It often feels awkward. I stumble over my words. I seem to not sound confident and knowing my worth. Like for instance, right now I have a client who has missed a payment and I struggled as to how to bring it up. I’ve solved this for future clients by setting up an automatic withdrawal system, but my current clients are not using this. Money is a tough subject but I’m working on that relationship.

Alrighty, lots to unpack here . First, the reason that we have to create a healthy flow, a healthy relationship with money is because we want to earn it right and if we are consciously or subconsciously in a constant state of battle and stress around money, that doesn’t exactly put us in a mindset where we can be creative and open and receptive does it?

It’s very much the opposite. So I’m going to unravel this money question in just a moment, but all I’m saying to be earning a good salary in your health coaching business, so much so that I’ve put together a free training for you on that exact topic all about how to make the salary happen and you can sign up for free at healthcoachpower.com/earn E. A. R. N. Okay, so I’m really interested in this idea of what to do when a client doesn’t pay you. There’s that missed payment. I mean if you’re having trouble asking for money in the first place, I’m going to tell you to go back and check out episode number 49 that’s called asking for money. But for today, let’s assume that you asked, they agreed and then the check is late or it bounces or it never shows up at all. Like I said, it happens all the time and I’ve got news for you.

Unfortunately, even with automatic withdrawals, it still happens all the time cause think how often somebody’s card expires or it gets lost or stolen or it gets turned off for suspected fraudulent activity, which seems to happen all the time even though nothing fraudulent is going on anyway. That’s going to be a missed payment that you have to then track down, find the client, have them update their stuff, have them give you the check bla, bla, bla. Happens all the time. So first and foremost, let this be a lesson to all of us that there is enormous value in encouraging a client to pay in full upfront. And that might mean write this down. It might mean that you discount your pay in full option. You know, make it attractive, pay in full, you’re going to save some money, okay. Or offer a bonus or both painful, you save some money, you get this extra bonus, please, dear God, pay in full.

Right? Or it could mean that maybe you don’t offer a payment plan at all. And I have definitely gone through periods of my business where I did exactly that because it was just becoming a huge pain in the, you know what? So do think about ways to get more clients paying upfront and you’re going to save yourself 1,001 headaches moving forward. Now of course, sometimes you are going to have people on payment plans is going to happen. So how do we deal with it? First breath. Number one goal here is not to get the money. Number one goal is to keep your sanity intact, right? We got to keep thinking about the big picture. Not this one person or these two people that are driving us crazy. You got to keep good energy for the whole of your business. So first and foremost, I recommend assume the best, right?

You want to assume that your client’s payment truly did get lost in the mail cause yeah, that happens or that, yeah, their card expired. That happens to every couple of years and assume there’s no ill will on their part whatsoever. Because I think too often we just jump to like, they hate me or they don’t like my program or they’re not going to pay me, or they think this bad thing and bup, bup, bup. Your mind can just run away and ruin your whole week, so don’t let that happen. Your job is to assume the best and then simply make it very, very easy for this person to fix the problem. That means that you’re going to alert them with a smile and just have a convenient way for them to update their card or whatever they need to do. Make it as easy as you can.

Secondly, because it is hard to sometimes approach these money issues on an even keel and to keep that breath moving in and out in a calm way. I highly recommend if you can, having an assistant or some third party take care of this for you. Why? Okay. You and I, all of us, all of our clients, everybody has a money story. We grew up with none of it. We grew up with too much of it and we were spoiled. We don’t know how to manage it. We Blah, blah, blah, blah. There’s so many problems and sometimes you’re going to see an ugly side of your client emerge when they have to deal with their own money stuff, whatever reason that the money wasn’t in the bank account this month. That’s their money story. And honestly, I really prefer not to see that. I prefer to not get in the weeds hearing about their sob story and whatever happened.

I prefer very much to continue thinking the very best of all my clients and seeing them in their best light. So if you can have a third party reach out and take care of all the missed payments stuff on your behalf, it will save a very important part of your soul. I promise. It can be very emotionally draining to get involved. So I want to say this and make it very clear. Your client’ money problems are not your money problem at all. Whatever it is. If they are an adult, they are 18 or over and they signed a contract, they are obligated to pay you and you absolutely can and withhold until they are all squared up. That’s the only fair thing to do. You can’t get involved emotionally because this is a business you guys, right? If it was just a hobby thing, if you’re treating it like a hobby, oh yeah, sure.

Don’t worry about it. Oh, I totally understand. It’s okay. Oh, just give me half. Right? That’s not how business sustains itself, so you have to make some decisions in your business that aren’t always going to feel like all hearts and roses. Sometimes it’s going to just look like black and white numbers on a piece of paper. Okay, so that’s the next part about saving your sanity. That part about not providing services for anybody who hasn’t paid you. Again, if you’re listening to their story about, oh, this recent home expense or oh, this car accident happened, or Oh, this, whatever bill came in the mail, you have this sweet emotionally invested part of yourself that’s going to say, don’t worry about it, but you will quickly build a bitter shell of resentment. And I don’t want that to happen because it will carry forth into all of your business interactions and will poison them.

You cannot have this take place in your business. You need to keep the money Karma all in a positive light. So instead continue to assume the best and just pause any services in the meantime. And finally, and I learned this from Lisa Fraley who I’m going to say a little bit more about in just a second, but Lisa is an attorney for health coaches and when it comes to collecting overdue payments, because this does become a legal issue, right? If they have a signed contract or if they agree to your terms and conditions. So she advises creating an alternate payment plan if necessary to continue helping the money to flow in the right direction. Does that make sense? So for example, let’s say a client owes me $400 and they just can’t pay it. They don’t have the money. Something happened, whatever it is, I don’t want to know about it, but they don’t have the money.

So what are the options in my option would be to lose that money entirely. Or as Lisa suggests, maybe they can’t pay the $400 that they owe today, but maybe they can pay $100 per month over the next four months until they’re caught up on that payment. Does it push their payment plan way out? Yes. Is it a huge pain in the butt? Yes. But it allows this person to do the right thing by upholding their commitment to the best of their ability. And it kind of takes away that shame that they might be feeling as most people do want to pay you. Most people are good people, especially if they’re your clients, right? They’re not perfect strangers. So this allows that to happen. And as a business at least I am getting some of the money that I am owed each month and the energy and the relationship is much more stable.

It feels a lot more fair than if I just demanded it all. Or if they just stopped paying completely. Like this is a middle ground that you can work out with your clients even if it’s a very small amount each month. Again, this is Lisa saying like have the money, uh, energy of the money flowing in the right direction just towards your bank account. We don’t want to have a big throw down with the client. Um, we don’t want to internalize the situation and let it eat us alive that were getting taken advantage of or anything like that. And again, building that bitter shell of resentment around you and your business. Don’t let that happen. Try the alternate payment plan thing. It works. I have done it many a time. Now, the other thing Lisa would of course recommend not that I actually called her today and consulted around this, but just having spoken with her enough times is I know she would recommend having a signed contract and all of the ingredients of your agreements in place just to cover your butt if this person has never signed anything with you than they really are not obligated to pay you anything.

Um, so if you want to get some of those pieces of paperwork together, you want it done right? You can get a DIY legal contracts from Lisa or just go check Lisa out at healthcoachpower.com/legal okay. But I also want to say about money situations is that many times, not always, but many times, it is worthwhile to your sanity to just cut ties moving on, right? If your client’s not responding to your calls, if it’s like they have fallen off the face of the earth and you’re like, what happened? We were just talking last week. You know what? It might be better to just stop. Don’t let all of your precious energy go down the drain. It may not be worth it.

Same if you hire somebody and you’re not pleased with their work. I had, this happened to me recently a couple of times actually, and I realized, you know what? I could try to argue with this person. I can spend the precious minutes I have in my day trying to make this work with the person who’s being disagreeable, or I could just consider it the cost of doing business and move along and find somebody else. Okay, so don’t, whatever you do, don’t. You cannot let the negative energy drag you down. It is better to lose some money than to lose your sanity.

Would you agree better to gracefully let somebody off the hook? You know you can do it in the kindest, nicest, most complimentary way or put on that alternate payment plan rather than letting the relationship turned sour. Hear what I’m saying? All right, good.

Cheryl says she’s asking question right now. She says, I would love to know what to do when you teach places consistently and they lay out contracts for you and then don’t hold up the end of their bargain.

I would probably start demanding that they pay me first. I not teach there anymore. I remember when I was doing a lot of in person workshops and actually ran a whole program through a yoga studio and they accepted the payment and then they were supposed to pay me the 70% or whatever the percentage was that I got. And it takes forever sometimes and you have to follow up and follow up and follow up. And I remember thinking, well, I’m not going to do that again.

That’s my smile noise. The same thing goes when you guys are asking for money in the first place. So let’s say that you’re doing some sort of corporate workshop, um, and you have the potential of reaching like 5,000 employees. I’m not talking about what Cheryl’s doing. Cheryl’s teaching the class, you know, it’s some consistent place. She needs to have an agreement that’s like set month after month after month for whatever she’s doing. But let’s say it’s a one off, right? You’re going to go into this corporation, you’re going to reach like 5,000 employees. So it’s a really good opportunity for you. And they say, Oh, you know, we can offer you $300 for this workshop and you really wanted like four or $500 like you felt it was for the work you were doing. You should be getting paid more, but are you going to squabble with them over that $100, $200? You could.

How do you think that HR manager is going to feel about you if you do well, they want to hire you again. Hey, I mean come on. They could pick from all sorts of people to come into their business. Why are they going to want to do business with somebody that gives them a hard time? I say go classy, right? Take them up on this amazing opportunity. Honestly, you could be doing it for free in this case and it would still be a great opportunity. I am not saying that you should ever sell yourself short. You should ask for what you’re worth, but if it’s going to cause strife, if it’s going to get awkward at all, you got away the short-term dollars over the long-term relationship or the long-term opportunity. I cannot stand seeing coaches getting wrapped around the axle over a couple of dollars that they are or they aren’t earning today.

You really have to think bigger like what am I going to make in the next 12 months and what do I have to do today to make that happen. So like in the case of this corporate workshop go in, maybe they don’t, maybe like Cheryl, they won’t even send you the check to the $300 it’s not about the $300 or the 400 it’s about the relationships that you are able to then build with their employees. Like put your energy where it actually matters. There you go. That is my approach to money these days after honestly wasting many, many years just getting my panties in a bunch over this stuff no more. I don’t have time for that drama. Just move on to the next thing and try to keep relationships smooth cause they will serve you very, very well if you do so. Alrighty. I’ve got some more questions to answer here.

If you’re with me live and you have a question related to money or related to something else, feel free to pop it in the comments.

I have one here from Catherine and Catherine said, I am currently enrolled at IIN and just finished the first quarter. I still have a way to go before seeing clients but I am so anxious to get started. What can I do now to prepare?

Catherine, I think one of the best things that you can do, and I always recommend this to people who are thinking about like getting into health coaching or like you, they just started is now is a great time to start being seen as an expert. Um, like a go-to resource. Maybe you don’t want to use the word expert yet cause you were like, I just finished my first quarter. Okay, a go to resource in the health and wellness world.

Right? So my story is that I had started a blog before enrolling at IIN and I didn’t think much of it, but having that blog in that readership that started to build became the launchpad for my whole business because I was putting myself out there. I was relaying information, I was just like, you know, maybe reading an article about flax seed and trying flax seed and then taking a picture of what I made and then writing about it, right? So it’s not like I was a doctor or some sort of scientist telling you about flax seed, which is a person sharing my experience. And you can do that even if you’re not even enrolled in a health coaching program yet, you can become a resource that people go to to learn about these types of topics, right? So blogging could be great. You could go so far as to start a podcast or a YouTube channel or something like that.

Or you can just become that person in your circle of friends and family that everybody is going to for questions around losing weight, healthy eating, whatever it is. Because maybe you know, you’re always, you probably already are talking about these topics all the time because we do don’t we? We get really annoying sometimes to our friends and family. I’m sure you’re already talking about everything you’re learning, but that’s good because people who are interested in what you do are going to start coming to you with questions and you’re going to engage with them. People I know have started like a meetup group or a book club, anything you can do to surround yourself with people that are interested in what you’re up to and position yourself as the if not expert resource and eventually you will be positioning yourself as an expert. Good Luck Catherine. I hope it goes well for you and let us know what you decided to do.

Okay, here’s a question from Lizzie. This is a pretty easy one, so I just wanted to toss this in here for anybody who was wondering, she says on your bio slash about page on your websites, do you prefer to have it in the first or third person? Mine is currently first person, but I’m thinking about changing it.

So your about page on your website is different than your bio. I know it kind of feels like it’s the same thing, but your about page is a is one thing. It tends to be a little bit longer. It’s usually written in the first person because they are on your website looking to hire you. So it’s good to have it come from your own voice and a thing that people don’t usually think about is that the about page really isn’t about you.

Your biography information hardly even belongs on it and about page, the best way to write your page is to really make it about your reader, about the problem you’re going to help this person solve. If you can show that you understand them, that goes a really long way and just think about it like people. People are a little self centered, right? Like not in a bad way, but they don’t necessarily want to read your biography there, kind of reading your website and somewhere in their head they’re thinking, what’s in it for me? What can I get out of this so they care less about your credentials, the name of your dog, you know, all the kinds of stuff that people sometimes put on their about page and they really want to hear more about themselves and how you can help them. That’s what your about page is about.

Your bio on the other hand is usually only like a paragraph and that’s something that, let’s say you’re hosting a workshop at the local community college, they would publish your picture with your bio like underneath the course or workshop description. That’s your bio. That’s usually written in the third person. And it is usually published on third party sites or publications. Like that example I just gave you. Um, where else would your bio go? Sometimes it goes on a flyer. If you are, again, if you’re doing some sort of event in town and you’re hanging up flyers, you might put your bio down at the bottom. Again with your headshot. Like, think of it like a byline or something like it’s a little blurb about you that people will use, um, inside marketing materials for different events that you’re a part of, some sort of program for an event. Boom, your bio goes in there.

So two separate things about page and the first person bio in the third person. All righty, what else do you guys got for me today? Beth says I’m going to be bartering professional services and I was wondering if anyone has a resource for a basic bartering contract.

I thought this is a great question first of all about the contract, but uh, also about just this idea of bartering. Have you done it hasn’t gone well. Usually. Usually these get a little sticky. So I know the, actually Lisa who I mentioned earlier, at least a chimed in on those posts and, and gave the advice that I’m about to give, which is the advice that my yoga teacher, when I did my yoga teacher training, he gave us this advice as well. Cause Yoga teachers are always in the situation where they want to barter services.

Here’s the long and short of it, don’t do it. Pay Each Other. And if your service costs $100 and in my service costs $100, we will just hand each other $100. Thank you. And process it like we would any other payment, which means in putting it into QuickBooks, you know you’re going to count it as income. Um, but this way it is. Everything’s on the up and up. It doesn’t create an imbalance of the relationship. I’ve had experiences where somebody wants to barter with their service that I don’t really need or want. Like it’s kind of cool, but I don’t really need it, but they really need my services and then it feels awkward, right? It’s not a fair trade. So first and foremost, just don’t barter it. I’ll pay each other. And then secondly, if you do need a contract for these things or for anything, again, I recommend Lisa Fraley. Um, you can find her at healthcoachpower.com/legal.

Okay, Claudia is saying, I’m just about to start my new blog all about natural solutions for depression. Should I write this in the first person and should I directly talk to potential clients? So, talking about you rather than just generally writing about natural remedies.

So Claudia, I think you’re talking about like all of your blog posts in general versus your about page. If it’s a, if it’s your about page, I would speak in the first person and I would talk to you the reader. Right? Cause it’s that one individual who’s reading your about page. I want to know about you, your blog posts, however I think I don’t have a straight answer for you there. I think it’s part of the style that you want your blog to convey. There are blogs out there that are very, very personal, right? So you would definitely, right in the first person you would definitely say you, you’d be speaking to the reader and forging that more intimate connection with them.

I think that’s the way I would go. But there are also blogs out there that are like a little more corporate, right? So it’s a little bit more removed. Yes, they’re publishing blog posts, but it’s written more in a general sense about topics and it’s not really talking to you and telling you what to do. It would just be like depression is difficult and here are foods that people with depression should eat. You know, it sounds a little more clinical that way. Um, and I think that either way could work but it’s going to kind of come down to your writing style. Um, if you are selling one on one coaching at the end of the day, I think you’d want to keep it more in a first person model so that they start to feel like you are a person that they can hire as opposed to writing in a more reserved way, like at an arm’s length where you’re speaking in the third person, they might not know is it, who am I hiring exactly. Is this a company? Is who is Claudia? So those are my 2 cents. But everybody writes their blog posts with their, with their own voice and in their own style.

Okay. Very good. Well, we are about to wrap up here, you guys. I want to give a shout out to Kelsey TC who left this five star rating and review on iTunes. She said, I love listening to these podcasts. Is it weird that I find them comforting? Michelle has a straightforward no nonsense approach that takes a lot of the fear out of starting a new business. Kelsey, I am just like you. I find so much comfort in having a straight answer, even if the truth isn’t always pleasant. You know, I’d rather have the facts then be fed a line of BS and that’s what I tried to do for you guys here. So we are all about no nonsense. Thank you so much Kelsey. We would love to send you a little gift. So please email support@healthcoachpowerat.com and reference episode number 57 for all of you listening, please head over to iTunes, leave a rating, leave a review every week. I’m putting out free valuable content for you guys answering your questions. And in order to keep doing that, we do need your ratings and your reviews because that’s how we reach more coaches. Yes. Awesome. Thank you for that in advance. And of course, maybe one day I will read your review on the air. In the meantime, please keep asking all your amazing questions and I will keep answering them. I’ll be back next week with the new topic. I’ll see you then.