This series is all about talking about money and getting it out in the open. We are relatively bad at talking about money – in both our business or personal lives. In the first instalment, I discussed our relationship with our finances. Even before we have counted what we have, how do we feel about the issue of money? Are we fearful, ambitious or out of control? Knowing where we stand with our cash is the first area to master.
Then I talked about managing what you do have coming in and going out. How we manage the little we have will help when the millions are rolling in. Let’s be frank, if we can’t handle £1000 a month effectively we’ll be swamped when we get £100,000! Managing money is about principles and systems, rather than luck or coincidence. If ‘hope’ is the way we are planning on balancing the books, we are a liability to our financial future – according to my former accountant.
The third instalment addresses the delicate issue of talking about money. I was surprised that more people are find it easier talking about their relationship history than their financial one. This is even more of a problem when it comes to discussing your income, salary or fee (a freelancer’s and contractor’s nightmare). We can help. Here are five ways to get the most out of your money conversations.
Know Your Worth
Often we are excited about an opportunity and want to get stuck in quickly. We have to be sure that it’s worth our time. Once you know your worth, you can confidently talk about how much you should be getting paid to be part of it. Your skills are the way you pay your bills. Each hour given to someone costs you something. So whether it’s your day rate or what your monthly target is, understanding what you are worth is vital. Research what the going rate is for what you do. Email a few competitors and get quotes. If your industry has a professional body or association, they will often have a sample rate card. Don’t forget to include your costs to finish the job, as well as what you want to personally get paid.
Sometimes it’s your time rather than your money that’s important. We have personal goals (such us spending more time with family, friends, working out, etc.). Consider whether taking on that new project is truly worth the effort when compared with spending a quiet weekend with your loved ones.
Know What To Say
It’s easier to ask about money without feeling awkward by having a set form of words. Yes, literally have money catchphrases that you are comfortable with. That way asking about or chasing money doesn’t feel so personal i.e. “what’s the budget for this project?” Or ask “how are the costs being covered?” The more you speak with others about money, the more you’ll hear these phrases coming up over and over again.
Also your actions with paying others say a lot about you. If you are often evasive about money or you’re regularly having to explain to people you work with why they aren’t getting paid – whatever the reason – they will be looking at you cautiously. Your actions show them that you aren’t looking out for their financial interests. Whether they tell you about it or not, once you’ve short changed or delayed paying someone what you owe or promised them, I can guarantee you that you’re no longer number 1 on their ‘eager to work with’ list.
Know When You’re Getting Paid
Whenever you agree how much your are getting paid, also ask WHEN you will be paid. Again, use those money catchphrases to help yourself out. Ask “and what are the payment terms, 30 days on receipt of invoice?” You are not asking anything that any credible business hasn’t already considered.
Often the person who is responsible for sorting out your payments is not the same person you’re speaking to about the business. Find out who the finance contact is and get both a phone number and email address for them. If you have to chase them, you’ll have their direct contact details. It will save you having to awkwardly remind someone you’ve worked closely with for money.
If you do have to chase an unpaid invoice, call first then follow up with an email to confirm what you’ve spoken about on the phone. It’s in your interest that you stay on top of what’s happening with your money, which you have worked hard for.
No Money, No Problem
Sometimes, we will be presented with an opportunity which has very little money in it. That might be because it’s charity work or simply a very small budget. Know your worth and consider if you can still benefit while working for free. I discussed that two years ago when because of contractual terms, I couldn’t earn any additional income. Also most of the work was for very small businesses or social enterprises. Here’s the original article about working for free and still benefiting with expenses and testimonials.
Scratch My Back…
Finally, there is absolutely no money to this gig. Neither is there the opportunity to leverage the work for your profile – no expenses, no testimonials, no opportunity to document your work. There is still a way of getting something out of the deal – trading skills or contacts.
Trading skills is the most obvious, and is very common. An accountant will set up the finance system for a new design business in exchange for an updated website. A cake maker will sponsor a motivational speaker’s event in return for some one-on-one advice. However you do it, make sure you have a record of what you are trading and what you are receiving. It’s still a contract and it has a value. It has to make sense to you. Don’t exchange a year’s worth of service for the equivalent of an afternoon’s work for the other person. If that’s the case, consider offering a discount on your service or product rather than the full service in exchange.
You can also trade contacts. Remember networking is the lifeblood of your business, and if you can be connected with more businesses or a key skill you need through someone else’s contacts – bingo! You’re still winning. Ask for an introduction, with a glowing testimonial of your great work, and go on to do greater things… all without a single penny changing hands.