How to Avoid Getting Burned in the Computer Business

When computer technicians are starting their first business they are quite vulnerable to “getting burned”. I have personally been burned a few times because I was probably too eagar to please. Here are some ways that new business owners can get burned and ways to avoid them.

Having a client not pay

This is probably the most common way to get burned. I have personally had a client not pay to the tune of $900 (you can read about that story here). Now days I have strict rules to prevent that sort of thing happening again.

Residential Clients:

• Always pay me in cash before I leave the house
• Only accept cheques if I have done work for them in the past and was previously paid in cash
• If they brought their computer to me, then they dont get it back until the work is paid in full

Business Clients:

• Cash is always preferred. If they must do cheque (which most businesses will do anyway) then I make sure I have them sign a work order. If they dont pay me then I can forward them to the debt collectors and use the work order as proof.
• Terms are 14 days. The closer to the date “you saved them”, the easier it is to get them to pay you.

Getting Sued

I went into this in great depth in our article “getting sued” where I said most of the time they are bluffing when they threaten to sue you. However, you need to cover yourself. If you know you screwed up then do what you can to remedy the situation and don’t get defensive.

Think of it this way, lets say you were at someone elses business, you slipped on something that shouldnt have been there and you hurt yourself. Would you sue them if they got defensive, said it was all your fault, told you to stop being a wuss and to get up? You probably would.

Now, lets say the same fall occured but they were really helpful. They were concerned that you hurt yourself, they got you a chair to sit down on and told you to put your feet up and they even brought you a coffee. Would you feel bad if you sued them because they were so nice? I sure would.

Listen to their concerns, be nice and try to see it from their perspective. However, that doesnt always mean that you bend over for everyone who threatens to sue you. There are always those crazy clients that have no grasp on reality and there really isnt much you can do about them.

To help protect yourself, you should draft up forms they can sign that release you from certain liabilities. For example, if you are formatting a computer and they dont tell you about certain data they want backed up, its not your fault.

Advertising in fake publications

As a business you are most likely going to get calls from various publications trying to convince you to advertise with them. Most of the time these are legitimate but there are plenty of scams going around. The caller may say that they have some magazine that is distributed to your target audience and can give you a really good advertising deal. The magazine of course is non-existant.

Another variation on this same scam is they send you a fake invoice for advertising you never ordered. This one is particually dangerous to businesses that have secretaries as its often their jobs to pay the bills, not knowing whether you actually ordered it or not.

To project yourself against such scams do the following:

• If you have never heard of the publication before, ask them to send you a previous one before you advertise with them
• Never give out your credit card number or other sensitive business information to someone who called you
• Never agree to any proposal over the phone. Ask for it in writing

For more information on such scams visit this site.

Ive had clients not pay and people threaten to sue me. What about you guys? How have you been burned in the computer business? Drop us a comment