Lesson on Contracts Learned the Hard Way

First, as I mentioned, always have an agreement, which should say the client will pay court costs for non-payment issues. A good idea is to engage a business lawyer with expertise in your industry to develop a basic contract.

Second, once the client was slow to pay the second bill, I stopped working. Many people will say you don't have any leverage if you stop working. My experience is that if you keep working, the client will think you need him more than he needs you, and the debt only gets bigger and you get angrier for letting the client take advantage of you.

Third, keep calling until you get your money because the squeaky wheel does get paid. That, I know, from running four turnarounds. Vendors who complain the most get paid because you just want them off your plate.

Fourth, if you were brought in by someone, see if that person will help you by putting pressure on the client. In my case, I was originally brought in by a well-respected attorney. From a previous experience, I know that someone else saying their reputation is at risk speeds up the process.

And fifth, this is very important in this economic environment: conduct credit checks. There are many sources that will provide you with the information you need to make a business decision. If you can't get credit information, ask for vendor references. In boxing, the referee tells the fighters to protect themselves at all times, and that rule applies to business as well.