Wearing My “Manager Hat”

I went into business for myself because I wanted to write and be my own boss. It was a long-time dream; the timing was right; and I was sooo ready. So, I took the plunge, having absolutely no idea what I was doing. That was a mistake. If I had it to do over again, I would know what I was doing before I found myself doing it.

Here are some of things I didn’t know:

• For every dollar that came in I had to put aside a certain percentage of for taxes. My accountant told me the amount could range from 30 to 50 percent, depending on my tax bracket. That meant for every three dollars I earned, I could spend two or possibly only one and a half. Those taxes had to be sent to the IRS every quarter before the fifteenth of the appropriate month.
• I already knew I was supposed to keep track of every expense, but I had no system for doing that. I either needed to create such a system or have my accountant do it. For years, I paid my accountant the extra money to do bookkeeping I could easily have done myself, if I had bothered to learn how.
• There was also, of course, the matter of tracking the time I spent on each client’s job and being sure I charged the correct amount. That meant deciding on an hourly rate, making sure the client knew what it was and agreed to pay it, buying and learning to use a time and billing program, and remembering to send invoices regularly and follow up when they weren’t paid. Every item on that list was its own individual nightmare.
• Then there were contracts, which I had no idea how to negotiate, write, or enforce. Consequently, there were holes in my contracts big enough to drive a jeep through. As for enforcing them — well, that was a joke. I tried Small Claims Court a few times before I found out it was an even bigger joke. (See Small Claims Court Revisited)
  
• Finally, there was the whole matter of determining whether or not I was making a profit and, if so, how much. To this day, I have no idea how to calculate that, so I never have.

The bottom line is this: I “went into business,” if you could call it that, like a kindergartner enrolling in college. I didn’t ask the right questions because I had no idea what questions to ask. I learned every lesson the hard way, often the very hard way. Some lessons I did not learn at all because, once again, I didn’t know there were lessons. Don’t ask me how; but, somehow, I have survived for 20 years. Much as I love what I do, though, managing the business has always been the toughest part for me.

What would I do differently if I could start over? In terms of wearing my manager’s hat, just about everything. The very first thing I would do is sign up for a small business course at the community college or one of the local universities. There are many such courses available, and I should have taken at least one. Learning to manage a one-person business is not like learning quantum physics. It doesn’t have to be the very hard way. It doesn’t have to be a mysterious or frightening. From what I hear, it could actually be challenging, growth promoting, profitable, and fun.

I have a little trouble with the fun part, but it’s possible, I guess.

Small Claims Court Revisited

I’m going to eat some words here. In a blog titled “It’s not fair!” I said: Do not — I repeat — do not ever try to sue a client in small claims court. In my experience, it cannot be done. I have tried three times, and, as I sit here popping Excedrin, I am about to give up.

I’ll admit I was pretty frustrated when I wrote that. I had already filed the same claim twice; plunked down my money twice to have to sheriff track down my elusive client; and gone to court to explain why I hadn’t prosecuted the defendant, who had never been served because he couldn’t be found. The sheriff’s office was getting used to my visits and phone calls, to the point that they actually called me to find out what the problem was (that’s a first, I’m told), and then went out to track him down.

The third time’s a charm, they say. They are right. I filed suit again, paid the sheriff again, and got on the docket again. Then, wonder of wonders, I began receiving e-mails from my missing client suggesting a settlement of 25 percent of what he owed me. Of course, he didn't actually have that amount of money, but he would borrow it. Yeah, right. I suspected that this time the sheriff had actually served the subpoena.

I went to court today, but my client did not. The courtroom was packed; and, if I had stayed around a bit longer, I could have written a book instead of a blog post. The judge was a comedian who should have his own TV show. He spent 45 minutes trying to keep a straight face hearing a case having to do with cement, planter boxes, and a dissatisfied customer who waited 13 months to complain about the contractor. Then, he devoted five minutes to cracking jokes with me before he awarded me the full amount possible in small claims court.

“That’s great,” I said. “Now what do I do?”

“Well, that’s the problem,” he replied. “We’re not allowed to tell you that.” The assembled crowd cracked up. I collected my evidence and went to report to the ladies at the filing window that I had won my case by default. I guess very few people ever tell them how it all turned out. They were delighted and, apparently, not at all restricted from telling me what to do next and how to do it.

So, off I went, armed with new forms to fill out and renewed determination to tackle the next step of our insane legal process. Updates to come.

It's not fair!

This is a rant. Do not — I repeat — do not ever try to sue a client in small claims court. In my experience, it cannot be done. I have tried three times, and, as I sit here popping Excedrin, I am about to give up. But, before I do, let me keep you from making the same mistakes I’ve made.

Let's say you begin by going to your attorney for help in collecting money you have earned through hard work. After a few false starts, your attorney suggests that you to try small claims court. Of course, the very most you could be awarded is $3,000, no matter how much money your client owes you. But, you decide $3,000 is better than nothing.

Small claims court is supposed to work this way:
•You file a claim.
•The defendant is served.
•You both appear in court at the appointed day and time.
•Your case is heard.
•You win. and collect your money.

Now, here is reality:
•You go to the small claims court office in the county courthouse and file a claim. It takes a long time and requires a lot of information you probably don’t have, since you had no idea what was expected.
•You pay the filing fee. If you want the want the summons served by a human being (the sheriff) instead of the US mail, you pay an additional amount.
•On your court date, you show up as scheduled. Your defendant probably doesn’t.
•When your case is called, you are told the summons has not been served. The case is cancelled.
•You repeat the process, at least once, with the same results.

All the things that can go wrong:
•The sheriff does not find the defendant for any number of reasons. You track down his whereabouts and pay some more money to have him served again. The sheriff still doesn't find him.
•You are told you must go to court, even if the defendant has not been served. You do, wasting many hours.
•You are told you don’t have to show up if he is not served. You stop coming and get in trouble with the judge.
•You go to see the sheriff and are told by a switchboard operator, “Sorry. That’s the way we do things.”
•You ask for a supervisor, explain the whole matter again, and are told, “Sorry. That’s the way we do things.”
•You go back to the small claims administrator, who tells you to call the sheriff and ask about hiring a private process server.
•The sheriff’s office tells you that’s not their responsibility; you should call the small claims administrator.
•You finally hire a private process server. He does not find the defendant, either (often, after several attempts). The next day, the missing defendant is seen drinking in a neighborhood bar. But, by that time, you have fired the process server.

Alternative scenario:
•The defendant is served. He does show up in court. You win the case; and he disappears (there are several ways to do this), never to be seen again.

You have now poured quite a bit of money into a black hole called the legal system. Your client, who has decided not to pay you, is probably laughing his head off. You are tempted to jump up and down with your fists clenched, and yell (as you children did when they were going through the terrible twos), IT’S NOT FAIR!”

Remember what you used to say? "Life is not fair."

Rethinking the Business Model

I have been in business for close to 20 years, and I must admit that for most of that time I have led with my heart instead of my head. I often give away the company store, so to speak — advice, information, time. All of that equates to money, money I never see because I don’t bill for it.

I trust people. I believe they are sincere and well intentioned. When they ask me what a project will cost I tend to underestimate and over deliver. It’s the perfectionist gene I guess. Everything I do must be the absolute best it can be. I never seem to figure that into my estimates.

I am never prepared for the instances when clients simply don’t pay. In fact, I am blown away when it happens. I have actually taken people to small claims court, only to discover that, even if I win the case, there is no enforcement of the verdict. Sometimes, the client is so illusive that the process server can’t find him. (The next day of course he is seen at Starbucks having a grand old time)

Teaching at the community colleges is not a get-rich-quick scheme, either. They pay $20 an hour — a teaching hour. That does not include preparation, materials above and beyond what the school will copy, gifts or meals for speakers who generously donate their time and talent, custom-made bookmarks, and parties at the end of each session. Money is obviously not the motivation for teaching.

I have friends who are sharp business people — right brained, practical, cautious. I promise myself that I will become more hard nosed and tough. Then, someone calls (who knows a friend or found me on Google or is on my website that very minute), and I cave in, forgetting all my promises. I answer their questions, share my knowledge, and get cauliflower ear from holding the phone. When I hang up I wonder if there is some deep psychological reason beneath my inability to say, “You know, the clock is running” or “This is what I charge for consulting.”

It may be as simple as having a mission, which, in my case, is to help writers write. On the other hand, many successful people have a mission and still manage to charge people for their expertise. Generosity is a lovely trait; being foolish is not. I think it was Einstein who said "If you keep doing what you've always done, you're going to keep getting the same result." (If he didn't say it, he should have.)

I think it's time to do things differently and see what the new result might be.