Guest Post: The Day My Business Died

I’m so excited to introduce you to music therapist, blogger, and boomwhacker extraordinaire Kat Fulton. Kat blogs at Rhythm for Good and runs the San Diego-based private practice Sound Health Music. Her infectious personality shines through her writing and she’s brimming with great ideas. Keep reading to learn more…

I’d like to share the three steps that helped me reset my entire business practice when I thought I lost everything and had little hope for recovery. Maybe these steps can help you in challenging times, too.

1. Lecture yourself as if you are your own daughter,
2. Use an outstanding therapy business start-up resource, and
3. Rate your clients from A thru F.

First, let me tell you about the day my business died. I remember it was January because in the months before, I was laser-focused on self-producing my DVD. When I say laser-focused, I mean the nothing-else-matters, do-or-die kind of intensity. This laser-focus had gone so far as to cause some substantial bookkeeping negligence.

Two of my day-to-day choices for the last 5 months of 2010 follow:

Which one would you choose?

That first month of 2011, I was experiencing minor post-partum depression after birthing the DVD. But in order to get out of it, I needed to return my attention to my beloved music therapy practice and address the bookkeeping issues. I needed to take action.

I remember my trembling fingers on the track pad, slowly rolling over the ominous Quickbooks icon. I waited for the golden icon to jump out of the computer and give me the big, wet, slobbery kiss of business death. I knew it was coming, and the anticipation was painful.

I had not followed up with delinquent clients for months, and I was sure that one of them owed me over a thousand dollars. I kept sending monthly invoices, but I knew I wasn’t getting paid for all of them. In the past few months, one particular client would speak on personal terms and redirect any conversations about the account. But I continued to see the residents anyway. I had no idea what else I would uncover.

I opened the dreaded Quickbooks application and scrolled through my client balances. I saw the expected $1,200 overdue, I saw a few who owed a couple hundred, and then I saw … $3,000 overdue. That was $4,200 in outstanding invoices between two clients.

That was the day my business died.

I was stunned. I put my head down and cried until I couldn’t cry anymore. The feeling in the pit of my stomach was excruciating. My thoughts raced, and I couldn’t help but think about what I could do with $4,200:

• Hire a professional video crew to document my Grandfather’s WWII stories
• Spoil the heck out of my nieces and nephews
• Take a nice Hawaiian vacation
• Pay for 6 months of body-sculpting boot camp
• Design a jungle-themed patio with live animals (and you *know* I would)

The worst part of it all was that it was all my fault. I’m the business person. I’m the one sending out statements (or not). I’m the one in charge of the accounts. I’m the one to blame. I had murdered my own business.

That’s what it felt like, so I rolled with the feeling. My business was dead. The end. When I was finished wallowing, I realized that my options were to 1) Get a job or 2) Start a new business. I couldn’t go on with the old ways of my old business.

I took three steps in starting a new business.

Step #1– I sat myself down as if I were my own daughter and lectured me. I asked myself “What would I say if my daughter were going through this dilemma?” Here’s what I would say: “Kathryn, you may not know it or feel it or believe it in every moment of the day, but you deserve to be treated with respect. You deserve payments that arrive on time. Life is too short to work with clients who pay late, or don’t pay at all. Chin up, kid. Do you ever go to the grocery store, and say ‘Oh, I’ll have to pay you next month Thanks for understanding,’ Of course not…”

I went on and on and on. It was a good lecture.

Step #2– In order to start my business on the right foot, I turned to The Therapy Business Blueprint. I re-created contracts based on the templates in the Blueprint. Ah ha! My contracts now included a clause about late payments! I also went through all the action items listed at the end of each chapter in the Blueprint, and made sure I was on the right track. Reading Kim’s “From The Trenches” stories kept me feeling engaged and understood, like I wasn’t alone.

At a time when I thought I just didn’t have it IN me to run a business, this resource saved me. Reading through the Blueprint helped me reframe my perspective and start fresh. Going through the Blueprint’s starter steps made me feel like a witness to my situation rather than a victim.

And fortunately for me, I had inherited a “dead business” with some slight traces of life. Obviously, I used the same business name. And I kept all my good clients, all of whom I am immensely grateful.

Step #3– I rated all of the clients I kept from my dead business. A+ thru F-. Literally. I developed a spreadsheet and assigned values to specific behaviors and characteristics. My F- clients are long gone, and I continue to whittle away when necessary. Meanwhile I give my A+ clients extra special attention and love.

It all turned out to be ok.

I was paid the $4,200 eventually, and swiftly fired those clients. I never announced anything to anyone about my dead business. But the impactful piece of the experience to me was the renewed mindset of running a new business with higher sets of values, higher standards, and a much greater capacity for growth and development.

Now, when a client is late in a payment, I send an email with the contract attached. I remind the client of the late fee, and there is rarely a problem getting paid. Running my business now is like night and day compared to the old days!

And, aside from whipping my regular clients into payment shape, I’ve opened up some web-based business. Now, it is crystal clear to me that late payments are absolutely, undeniably unacceptable. Imagine the payment process for online sales: The customer expects to pay *first* before the goods are delivered. My service side has taken a lesson from my products side, and trust me, there is no turning back! I’m spoiled from getting paid first for the value I offer.

I would go so far as to say that services should be paid either COD or in advance. Those are my A+ clients =)

Growth is healthy and necessary for success. Needless to say, my clients take me seriously when I point out the contract terms now.

There is a moral to the story.

I want to continue to evolve and shed the old skin of bad habits that do not serve my higher purpose, personally and professionally. In other words, I can’t grow and evolve if I stay with the same old late-paying clients.

I must close some doors to open new ones. I must allow my self-respect to pour into my business practice and overflow.

Do you have similar stories? I’d love to hear your thoughts and insights.

Kat Fulton is a music therapist in San Diego who writes regularly at her music therapy blog.

Tagged as: start a therapy practice, therapy business, therapy private practice