Question
Hi,
1.We took on the creative video project because it was creatively stimulating, and our team agreed that it would boost our portfolio.
2. We signed no contract (big mistake, we realize now).
3. The estimates were approved on a per minute basis as creative video projects usually work.
4. Our co-founder who acts as the account manager is in contact with just one person in the client organization.
Problems:
1. Timeline issues -
We were at fault with regard to the timeline. Multiple delays from our end for a variety of reasons.
But the client never fully canceled the job on account of these delays. They threatened but never shut down the work completely.
2. Delivery -
Work was completed in January. The first draft was delivered to our clients.
But there was a problem with the length and the payment.
3.Payment or rather no payment - Till this point, we had not taken a single dollar as payment (in January). Number one reason was because we were just setting up shop and did not have all the paperwork approved.
We sent out 50% of the invoice after the delivery of the first draft in January (and not for the full amount because we believed we may have to work on some review changes).
4. Estimate problem/change after delivery -
Then there came the issue of the interpretation of the approval estimate.
For video production based on the complexity of each project, we charge by the minute. A specific dollar per minute value was approved.
We had taken approval for a maximum video length of 2 minutes 20 seconds(in an email). But the final draft was longer.
However, the client refused to pay for even the length that was approved.
Because we had invested so much, we agreed a massive deduction of the video length (and so the budget too) to below 1 minutes 30 seconds.
5. Recalculated Invoice - Invoice was recalculated. 50% of the newly agreed length sent out. With the agreement (via email) that the final payment would be made in April'16, once we get the information from our clients on how to get the length down to the new mutually agreed length.
Even though ur work is animation. And in animation, every second counts.
6. Feedback -
There was no feedback from their end, despite numerous reminders from our end. Our single point of contact, their creative manager, would reply that he will work on it/sent it by so and so date, but till date we have received no information.
With their feedback pending, we cannot edit the video or complete the project.
And as we do not think it is ethical to raise the final 50% of the invoice, the final work has been completed, we have not sent the invoice for the full payment.
7. However, the payment for the first invoice was made in the beginning of April'16.
8. But since then, despite multiple assurances our client has not given us the feedback that will allow us to:
A) recover some of the financial investment made during production
B) allow us to the work in our portfolio (this was a big motivator for us to take up this project at a price point which wad much lower than the market rate).
9.We are very unhappy with these developments, and we also understand that we were naive on multiple fronts.
But now we would seek advice on what might be the best course of action to seek closure -
a) get the full payment ( preferably of the originally approved length)
b) ensure that our work will see the light of the day.
We had explicitly reiterated that we should be able to showcase the video as part of our portfolio.
Please suggest the options that we, as a small budding bootstrap and creative startup, can explore.
Thank you for going through our question.
Answer
Hi there! I know it is tough to chase money especially with your own business because we feel like "money talk" is not okay. My best advice to you is to be firm! Send an invoice for the full amount. If you are feeling to push the limit a bit feel free to add a late fee. This sometimes will light a fire and give a call to action. I would also try communicating on the phone. Sometimes emails can get lost in the mix so it's best just to call them up and say "Hey we delivered your video, you owe us, now pay us." If they don't answer to either I would have your lawyer send over a letter. I would also include (if it gets to sending your lawyer a letter) that if you do not hear from them they are neglecting the project and you will be able to show the video on your site.
Moving into the future we always pay a 50% deposit on all videos we produce and the rest is given upon completion. Make sure all future projects this happens so you have money to use while you are working on the project! A contract is also always great too if you are negotiating prices and the rules of who can show/share/promote the video.
I hope this helps! If you want me to further explain some tactics I would be happy to jump on a call!
