Many Kenyans relate to the struggles that come with hunting down debts, but the situation is particularly worse for entrepreneurs and creatives.
This is because, for many in the creative economy and those running small businesses, they depend on clients' payments to sustain themselves and the operational costs of their ventures.
In what is an all-too common scenario witnessed in Kenya, many offering professional services take to social media to put clients on blast as a last resort after fruitlessly chasing monies owed.
Those most affected include photographers, models, content creators, designers and influencers among many others in the creative economy. Several options are, however, available for Kenyans to enforce valid debts.
Experiences narrated by Kenyans reveal a common thread. In many cases, once the work is completed, clients endlessly redirect entrepreneurs and delay payments for months or years on end.
All manner of excuses are usually given, including the unavailability of individuals required to authorise payments. After repeatedly visiting offices and making phone calls, some entrepreneurs abandon the debts out of frustration.
For many business owners to whom cash-flow is important, this can be fatal for their enterprises. Those offering services without having clients pay 50% deposits upfront are also worse hit.
To deal with these problems; those with enforceable contracts sometimes opt to engage the services of professional debt collectors, courts and the police.
Kenyans.co.ke engaged credit and finance expert Joram Mwinamo, CEO at Wylde International to understand how entrepreneurs can avoid such situations and deal with defaulting clients.
Mwinamo, whose organisation works to grow Small and Medium Enterprises (SMEs), offered several crucial tips, particularly for young entrepreneurs.
The fool-proof plan
Importantly, he noted that it was important to value your work enough to negotiate enforceable contracts with clear terms at the start of any assignment. He observed that many feared losing out on opportunities particularly with big brands but it cost them in the long run.
"Make sure you have a contract to ensure that once you finish the job, not much is owed. Put in clear terms on pre-payment of at least 50% when you begin, if the work is a lot-you can put in a mid-payment and the last payment when the work is done," he stated.
Mwinamo offered an example of entrepreneurs who negotiate a 50% deposit, 45% payment when the draft assignment is done and 5% at the final stage. He observed that, in many cases, clients pay the full amount if the draft assignment meets the expected standards.
For draft assignments including reports, documents and photos, make sure you protect yourself by using watermarks, stamps and other security features.
Mwinamo reiterated that it was important for entrepreneurs to ensure they have strong mindsets so as to be able to retain control.
"You must value yourself and what you do as valuable. And when you go out there, display that value. This way, you can negotiate and push back if necessary because you know your work is valuable and you have a strong track record with previous clients," he stated.
Mwinamo further advised entrepreneurs not to spare costs when it came to engaging lawyers and professional debt collectors, arguing it would cost them more if they did not.
"Work with lawyers and debt collectors because they don't have any emotional attachments with the issues and will enforce payments as necessary," he asserted.
