At the end of October, a past client asked if I would help him run his new startup company, for which I wrote the business plan two years before. I liked and trusted my client, who had a non-working financial partner. My client and I met with the partner to get his blessing on my involvement, since he would be paying me.

We met in the financial partner's office, and they agreed to pay me a set amount each month. The financial partner said that, because I had worked with them in the past, he didn't see the need for me to develop a proposal and sign an agreement. I was told I would receive a check the first Friday of each month and either side could end the relationship for any reason.

Mistake No. 1: Never do anything for anyone without an agreement that lays out who is responsible for what, the time period for payment and penalties if payment isn't made in the period agreed upon. It was the first time I didn't have an agreement, but I trusted the people because I had gotten paid before with no problems. It took three weeks to get the first check.

Mistake No. 2: I e-mailed an invoice the week before the end of the month, copied my client and called the financial partner's controller to make sure they received it. No problem; they had the invoice. They didn't say: "No problem, I will get you the money as per our verbal agreement," just that they had the invoice.

The first Friday of the month came and no check! I waited until Monday, and then I followed up with an e-mail. No reply for two days, so I followed up with a call. No response. In the meantime, I was reassured by my client that I would be paid.

Before taking on this role, another guy had filled the same position. His complaint was that he wasn't paid on time and that is why he didn't produce any results. Yet he did manage to stick around for five months and collected all of his money. I was assured that wouldn't happen to me.

I continued to work and called the controller. I finally got through. He apologized for not getting back to me, but he was busy with a year-end audit. I would receive half of my fee the day after Christmas. If you are keeping track, that is almost a month after we agreed when I would be paid. The controller said the other half would come in two weeks.

As I write this column, I am still waiting to be paid, and so I have become the bank, providing an interest-free loan and hoping people I trusted will make good on their promise to pay me. The controller has written to me and again promised payment, so I do have two e-mails in the event I need to go to small-claims court to collect.

Mistake No. 3: This may be an unavoidable mistake if you work with people throughout the country, but the financial partner is based in New York. Therefore, I would have to file in small-claims court there if it came to that. Hiring an attorney is out of the question because of the cost. So what do you do when you have a collection problem?

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.

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