You enjoy fixing things around the house, are good with your hands, and like to interact with people. These things in mind, you have decided you are a perfect candidate to start a home repair business. So now what?
After you determine the services you want to perform, the customer base you will serve, the name, structure and location of your shop and your marketing strategy, there remains only one major issue: How can you ensure that your customers pay you for the work you provide?
1. Clarify Your Processes
For your own protection and in order to provide full transparency, make a written payment policy document that you give to each customer before a job begins. This document should include comprehensive information about billing: how often invoices will go out, your late payment policy, how your payment rate is structured (hourly, daily, etc.) and the payment types you will accept.
The more flexible you can be in giving your customers numerous payment options, the better. If you accept credit cards online, allow for recurring billing over time, and take in-person swipe and chip cards as well as NFC transactions, you will make the payment process convenient, thus maximizing your chances of receiving the money you are owed in a timely fashion.
2. Protect Yourself from Undesirable Clients
When you’re just starting out in your home repair business, you might find yourself wanting to work for anyone and everyone who contacts you. Sadly, this inclusive strategy will open you up to exactly what you don’t need: clients who complain unreasonably about your work and who either submit their payments late or not at all.
The importance of protecting your good name and reputation cannot be overstated. Preserve both by being as careful to choose the people for whom you work as they should be in choosing you. If your gut tells you that a prospective customer spells trouble, bow out gracefully. Some red flags include people who question every detail of your work above and beyond the norm; bargain hunters who want you to reduce your already fair rates to an unreasonably low level; and potential customers who fail credit checks or whose references seem hesitant about vouching for them.
In all of these cases, politely and firmly terminating contact can save you from a world of invoicing nightmares in the months to come, leaving you with more time to find the solid, conscientious customers you deserve.
3. Take a Hands-On Approach to Late Payments
Perhaps you dislike confrontation and would prefer to simply wait for a customer who is delinquent on payments to eventually do what’s right. Although this might happen once in awhile, the reality is that the longer you allow an overdue payment to extend, the less likely it is that you will ever receive what you are owed.
This is where establishing a relationship with your customers can really come in handy. If someone forgets to pay their bill, give them a call and remind them of the written payment policy that you provided before the job began. Give them a full 30 days to make the payment and then charge interest. If the customer contacts you to make payment arrangements, consider this to be a minor victory; receiving a smaller payment each month until the debt is satisfied is better than demanding it all up front, only to end up with nothing if the customer does not have the means to pay it all right away.
If your phone calls and emails do not produce any payment results, draft a firm letter specifying the legal consequences of non-payment. If worse comes to worst, hire a collections agency.
If you are a conscientious home repair business owner who consistently does excellent work and spends time understanding your customers’ needs, delinquent payments will hopefully be few and far between. As long as you keep your promises, make customers aware of your payment expectations and weed out those people who seem likely to default, you are likely to garner a great deal of success.