Getting paid for your work

[Steve Brewer]

I took a saddle order last year for a full carved saddle.The saddle is finished and the person has no money to pay for it.They have known for 14 mos.what they owed.We get a third up front,and the rest at the time of completion.

How do others deal with people who do this? I usually hold the saddle for 30 days,then put it up for sale.

[TwinOaks]

make sure you have that info in your sales/order contract, and something about non-refundable deposits, then notify of your intent to sell.

[ArtS]

That stinks to say the least. Do you have a whip in the shop? Use it on him!

Can we see a picture of it?

Art

[greg gomersall]

Thats a tough one Steve. On the deposit thing I take 600.00 up front when they order and then get 600 more when I am ready to start work on the saddle (more if there is silver involved). Generaly at this point if they can't come up with the second deposit I just set thier order aside and work on the next one. I just had a gentleman pick up a saddle last week that he ordered 8 years ago. I finished one for him in 2002 and he never picked it up. After waiting 4 months I sold it, he finaly contacted another 3 months later and when he found out his saddle had been sold he wanted his deposits back. When I informed him deposits were non refundable he got kind of cranky but I did tell him that if he ever got to where he could get one made I would put his deposit towards a new order. He got his act together in 07 and we built him a new rig this fall. Cost him alot more than the first one would have but he was sure happy with his new rig. Inform you client they have 30 days to pay for thier rig or you will sell it, but include the option of putting thier deposit towards a rig in the future as long as it is for a similar full carved saddle. Your base price will increase along with your options so you will get more from them next time if they come back anyways. I hope it doesn't take too long to sell and if you have to lose any money on the selling price make sure that reflects against what kind of credit you carry forward towards a future order with this individual. Good luck greg

[Cowboy Crafts Online]

Steve,

I put together a contract a few years ago after taking a buisness law class. It states that I need a 1/4 of the final price for a depsit and then another 1/4 of the final price when I get ready to build the saddle. Then the remaining balance is to be paid when the saddle is complete. It also states that it must be paid within 30 days of completion, if not I will sell it and no depsits will be refunded. The customer and myself both sign when ordered and we each have a copy. I use to take a set amount like Greg, but quit due to the different prices of extras on the saddle. I figure that if they order a 4,000 saddle verses a 3,000 they will have less to come up in the end. I am sorry that you had to learn this the hard way, hopefully they will come up with the money or you can get it sold out right.

Ashley

[Traveller]

As someone who's in the position to buy rather than make a saddle, I quite like Greg's approach. I'd feel terrible if I'd ordered a custom saddle and then, a year later, the saddlemaker had put time, considerable skill and expensive materials into something changing economic circumstances meant I could no longer afford (I'm assuming your clients, Steve, are not paying because they can't and not just because they changed their mind, though who knows!). My downpayment should put me in the queue and my second payment should insure that the saddlemaker's not out cash for materials on a saddle it turns out I couldn't afford.

I would also appreciate someone who would let me put my deposit towards another saddle at a later date, less some percentage (say 10%?) for not having met my original obligations. (Would you sell a custom saddle to a third party for slightly less, since it wasn't made custom for them? In that case, you might want to take the difference between the two amounts into account instead of some percentage.)

And having a contract makes sense for both parties. It helps the saddlemaker, of course, but it also helps the buyer in the event that the saddlemaker doesn't come through, for good reasons or bad.

I hope you work things out soon, Steve!

[Timbo]

On the subject of contracts it would be cool if somebody could post up a copy of what you use for a contract for custom saddles or leather work.

Tim

[Steve Brewer]

Every couple of yrs.we have someone who has trouble getting their saddle paid for.For quite a few yrs. I have had a sign posted that deposits are non refundable,it also is on the order.My price list says final payment is due on saddle completion.Most people make arrangements to pay .Some make it with payments ,but the saddle stay here until paid for.

Thankyou Steve

[Bree]

Every couple of yrs.we have someone who has trouble getting their saddle paid for.For quite a few yrs. I have had a sign posted that deposits are non refundable,it also is on the order.My price list says final payment is due on saddle completion.Most people make arrangements to pay .Some make it with payments ,but the saddle stay here until paid for.

Thankyou Steve

Bree's basic principle #3 of successful small business...

Never ever allow the customer to have BOTH the goods and the money.

[rgerbitz]

I like your principle Bree, and would very much like to hear the others.

Rob

[UKRay]

I like your principle Bree, and would very much like to hear the others.

Rob

Yes, me too!

edit due to inability to press keys and think at same time...

Edited November 14, 2008 by UKRay

[Bree]

I like your principle Bree, and would very much like to hear the others.

Rob

LOL!! I have lots of them. I number them as I go along. I spent 15 years doing management consulting for small businesses and entrepreneurs back when I lived in Florida. People came in with all kinds of wacky problems and ideas and they naturally give rise to these principles.

In the case of this one, it is the result of losing about $50,000 in fees not collected from deadbeats who in one way or another conned me out of the money. Having a kind heart, generous soul, and believing attitude is not usually good for little businesses like mine.

Here is one you don't find in the books... Bree #7 for when you are selling.

Share your customer's prejudices.

It's amazing how when you walk into someone's office and scan their books and paraphernalia you can get a quick picture of how they think. A little bit of listening later and all of a sudden you have a picture of their likes, dislikes, and prejudices.

I found that people love to buy from salesmen or saleswomen who share their prejudices. I suppose it's a trust thing. They bond on stupid stuff... irrational stuff like prejudice. But in selling, production is what counts unless some sacred principle is being violated in which case, you can compute the cost in lost sales, commissions, and profits of your high moral compass.

It's a sad but true fact of life and business.

Here is Bree #11

A really good business always does the same thing at 2:00 PM on Tuesday.

I had a client who ran some Dunkin Donuts locations. He was totally ignorant about acedemic theories of business. He was from Portugal and had some $$$ and bought a franchise. He simply followed the book Dunkin Donuts gave him. He became very wealthy doing it despite his lack of formal education or training.

In an operations review for a business plan that I was writing for him, I noted that every Tuesday at 2:00 PM they started cutting donut holes. The dough for the donuts would go one way and the hole cut outs would go another for processing into Dunkin Donuts Donut Holes.

It was a PROCESS... the same thing done over and over and over like clockwork. The business was just a machine running the same operations according to a process. Management was all about monitoring and tweaking the cogs of the machine making sure that it was running fine. His manuals gave him all the process tools he needed to WIN.

Bottom line... the closer that a small business comes to being process-driven like that Dunkin Donuts, the more likely it will survive and prosper. People blindly proliferating products, techniques, and deviations end up in process hell. And they fail... very very fast.

So make PROCESS one of the most important words in your business vocabulary. Define your processes, document them, and most importantly follow them religiously. It makes your nice little business boring in a way. But that is the boredom that generates money and profit... the boring hummmmm of success.

[Go2Tex]

................Bottom line... the closer that a small business comes to being process-driven like that Dunkin Donuts, the more likely it will survive and prosper. People blindly proliferating products, techniques, and deviations end up in process hell. And they fail... very very fast.

So make PROCESS one of the most important words in your business vocabulary. Define your processes, document them, and most importantly follow them religiously. It makes your nice little business boring in a way. But that is the boredom that generates money and profit... the boring hummmmm of success.

All so very true, but hard to apply to a custom order business. Every order is a bit different and more often than not, you're sitting there at 2: pm on Tuesday waiting for the leather to dry wondering what else you can be doing. Or worse, with no orders! Then, I guess you work on your new business plan.