Expensive Lesson Learned
Despite a promissory note and a lawsuit, Sarah doesn't know how to collect on an unpaid invoice.
QUESTION: Sarah works for a civil engineering firm. Two years ago, they had a client not pay a $40,000 invoice, even though he signed a promissory note. They sued him and won, but his assets can’t settle the bills. Her business makes about $1 million a year. Dave tells her why, if it were him, he wouldn’t spend too much time on this.
ANSWER: You can hit a rock with a hammer and it will never bleed. There is no money to get because he doesn’t have any. You’re dealing with a snake and you think he’s hiding something. I’m going to learn lessons from this and change my sales procedures to reflect this experience. I wouldn’t chase a $40,000 client when you make $1 million a year. You let him get too far into you for a new client.
You could spend a little effort on it. You can hire fiscal private detectives; people who look for assets and check bank accounts. Try to find where the snake laid his eggs. I’ve done some of that, but it was just because I was mad. It doesn’t end up being profitable, because either are broke or pretty good at hiding their money. You’re better off trying to collect $2,000 out of $40,000. I’m more apt to going out and making money. Write this off as a lesson and see how you can learn from it so you never go back there again.