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Protect Yourself Against A Bankrupt Client By Brian C Jensen

Protect Yourself Against Bankrupt Client

From projects gone awry to unpaid invoices, working with a bankrupt client can be an incredibly difficult and unsettling experience. Unfortunately, economic downturns often lead to increased instances of bankruptcy for business owners and organizations. For businesses in the service industry, it’s essential to take proactive steps to protect yourself from clients who could very well declare bankruptcy at any moment. In this blog post, Brian C Jensen provides helpful tips on how you can safeguard yourself against a bankrupt client while still fostering a successful working relationship. Keep reading if you want to learn more about the warning signs of potential financial trouble and what proactive steps you should take before taking on any new job!

Brian C Jensen On How To Protect Yourself Against A Bankrupt Client

According to Brian C Jensen, when a client unexpectedly declares bankruptcy, small businesses can find themselves without payment for services rendered. To protect your business from such financial turmoil, there are several steps you should take before entering into an agreement with any new customer.

The most important step in protecting yourself against a bankrupt client is to thoroughly vet all potential customers before signing a contract. Review the customer’s credit score and request documentation of their current financial situation, including statements of assets and liabilities. It is also advisable to check that they have not filed for bankruptcy in the past few years or had any other problematic dealings with creditors. This may require extra due diligence but could save your business from substantial losses down the road.

It’s also wise to secure payment upfront. This can be done through a deposit, an upfront retainer, or the full balance due before services begin. You may also consider holding payments in escrow until services are completed to your customer’s satisfaction and all terms have been fulfilled.

When it comes to contracts, make sure you clearly define the scope of work, billing timeline, and payment policy in writing. Ensure that your customers agree to all terms in writing, so there is no confusion as to what was promised or expected from either party. Make sure any changes are reflected in new versions of the contract.

Protecting yourself against a bankrupt client doesn’t end with a comprehensive contract; you need to continue monitoring their financial situation over the course of your agreement. If you become aware of financial difficulties that could affect your customer’s ability to pay, take proactive steps to collect payment as soon as possible or renegotiate the terms of your contract.

Finally, Brian C Jensen recommends considering taking out a business insurance policy to protect yourself in case of non-payment from customers who declare bankruptcy. Business insurance can be tailored to suit your exact needs and provide peace of mind if a customer fails to meet their obligations.

Brian C Jensen’s Concluding Thoughts

By following these tips by Brian C Jensen, small businesses can better protect themselves against the risks associated with working with clients who unexpectedly declare bankruptcy. Taking the necessary steps before entering into an agreement will not only limit any potential losses but ensure a smoother business relationship down the line.