Tips every freelancer should consider when vetting clients
Relationships with clients are the lifeblood of any freelance business. As a freelancer, your profit margins, your reputation, and your overall success depend on building and maintaining relationships with the right kind of clients. Creating a vetting process for clients before you enter into a professional partnership can help ensure that you’re entering into mutually beneficial relationships.
As a freelancer, you have the power to choose the people you go into business with, so it’s important that you partner with the right ones. Unvetted clients can siphon off your time and energy, divert resources from more productive or profitable projects, and even harm your reputation. In some extreme cases, one bad client can lead to the end of your freelance business, especially if you are just starting.
Why vetting your clients is important
Vetting a client is the process of verifying factors that will have a strong bearing on your professional relationship. These factors include identity, payment ability, and in some cases, the prospective client’s intentions.
For example, a freelance artist may ask if a potential client intends to use their art for personal or commercial uses. The answer to this question could change what the contract for the job is, such as payment details, as well as how expectations for the end product are managed.
The ideal vetting process for clients will vary depending on your industry and the types of services you provide. Whatever your situation, here are some common best practices you can follow to protect yourself and your client as you enter into a new professional relationship.
Create a contract for every job
No matter the size or length of the job, it is crucial that you write a contract for each new piece of work you will be performing or creating. The contract protects you from situations like non-payment and acts as insurance for your client. You can write a new contract for each client, with specific considerations for that job, or you can create a contract template that you use for all clients. Both approaches result in a legally binding document, and which one suits you best will depend on the specific needs of your client.
An e-signature solution makes it easy to collect legally binding signatures from all parties. Once you create a contract and get it signed, it is important that you keep all active, and even inactive, contracts organized. Active contracts need to be easily accessible so you can refer back to them during the job and at closure.
Inactive contracts are still valuable because you can use them to resolve any conflicts that may arise around deliverables after the fact. You can also reference inactive contracts to create new contracts for similar projects.
Build relationships with clients
Building strong relationships with your clients helps you attract new clients and retain existing ones. It also reduces the likelihood that a client will take advantage of you. Building trust opens pathways for long-term partnerships and makes clients more willing to collaborate.
There are many factors to building relationships with your clients, but two of the most important ones are communication and reliability. People trust freelancers they can rely on — meaning that you need to keep your word and deliver to the best of your ability.
Communication is another important part of creating a strong relationship. You should be communicating about your mutual professional interests, but good communication doesn’t stop there. You can build trust by showing you are receptive to new ideas or concerns, as well as communicating in a timely way about any hiccups or special situations.
Plan to negotiate
A common mistake that freelancers — particularly new freelancers — make is undercharging for their services. As you are building your freelance business, it is important to learn how to value your time and skills, and then negotiate rates that accurately reflect your value.
Negotiating with clients can be a delicate balance, but it is easier if you have a strong relationship with them. If your client asks you questions about why you are charging a certain amount, here are some considerations to help make the negotiation smoother. You could even reference these factors when writing an invoice if you want to pre-empt any pricing questions.
- Price of raw materials: If you have to purchase raw materials to create the product for your client, these expenses should be reflected — along with the value of your time — in your final invoice.
- Market prices: If a client has a problem with your pricing, you can provide information about average market prices for similar products or services to demonstrate that your pricing is in line with market rates.
- Proof of experience: Your credentials should also be factored into your pricing. For example, if you have been making pottery for 20 years, you are going to charge more for a set of dishware than someone who has made pottery for three years, because you are likely offering a higher quality product.
What to do if a client takes advantage of you
In the event that you do find yourself taken advantage of by a client, despite your vetting process, you have a few options.
Depending on your relationship with the client, you may be able to negotiate a settlement. However, if you can’t come to a peaceable agreement, consider turning to a third party for help.
Hire a collection company
A collection company will help you pursue past-due invoices if you are unable to reach out to your client. It should be noted that taking an invoice to collections will reflect poorly on your client’s credit score. Additionally, you won’t see the whole payment because the collection company will take a percentage.
Just as you do with clients, it is important that you vet the collection agency and ensure they are properly licensed and registered. If you don’t, you may end up in a worse place than when you started.
Professional mediation can be a good way to solve business disputes. For example, if you and your client are not able to agree on the interpretation of your contract, hiring a professional mediator may help you come to an agreement. Professional mediation is a good way to solve problems in a civil way.
You will want to have a specific goal in mind before you start mediation. This will help you find a mediator who has the skills you are looking for and ensure you are not wasting time or money trying to find the ideal outcome. While you may not achieve your goal exactly how you envision it by the end of the mediation process, having something to work toward is the first step to negotiating an agreement.
Pursue legal action
For more extreme cases, you can pursue legal action. For example, if a client causes physical or property damage to you or your business, you can sue for reparations. Pursuing legal action against a client is often a long and expensive process.
The type of lawsuit you are filing, whether it be a small claims suit or a civil suit, will determine how long the process will take. In either case, you will have to pay for your own legal representation for the length of the suit, as well as all court filing fees, which can add up.
Before you start the court process, make sure the problem is either too large or too complex to solve through mediation. Still, by having a clear, legally binding contract, you can reduce the likelihood that you would need to pursue legal action against your client.
Vetting your clients at the beginning of every professional relationship helps to protect your business. This process can be as simple or complex as your needs dictate, but every freelancer should put a vetting process in place and follow it with every new prospective client.