Cancellations. 5 Reasons why YOU NEED a policy!
Cancellation Policies: A Self-Employed Essential
Working in the Self-Employed world, here’s something you’ll learn very quickly: Time is money. And every penny counts. Which in turn means ever hour, minute and second counts. Understanding that and keeping it in your mind is something you come to find will serve you well in a full range of areas - including how you schedule your workload, how you manage your time, and how efficiently you carry out your work tasks.
So yes, as someone who is self-employed - you probably already know that all too well. But not everyone does! And not every body will understand nor respect that.
When working with our clients, we are often asked - “Do you think I’ll need a Cancellation Policy?”
Our short and very simple answer: “Yes! Yes! Yes!”
5 benefits to having a solid Cancellation Policy.
Assuming you want to set-up, create and run a professional and sustainable business that will support you as your main means of income. Having a solid cancellation policy in place is an absolute essential. In fact, it’s a requirement. And there are umpteen reasons why so, but we’ve put some of the main ones below!
Respect. For your time. And your business.
In business, we all want clients that respect not only our skills, but also that our time is important. Creating a Cancellation Policy and enforcing it, does just that. It tells your client (or a potential one) that your time is valuable.
Just as you value your client’s time, the client must value yours. For any business-like transaction and relationship to work, it must be a two-way street.
Scheduling. It’s all about balance.
If you don’t have a Cancellation Policy you’ll more than likely find yourself constantly to be changing your schedule, rejigging your timetable and ultimately in a continuous mind-numbing position of having empty slots in your work schedule all because of clients cancelling last minute, or with very little notice. Something that will nearly be impossible to avoid, without having a solid, enforceable cancellation policy.
Not only does it affect your time, your entire schedule and your revenue, but it can also have an effect on your morale and motivation levels.- something that’s incredibly important when working self-employed!
Having a Policy, in place, that your client has acknowledged and prior agreed to, means you won’t need to do all that re-jigging and changes to your schedule to make up for lost revenue.
Accountability. It’s there. In Black & White. (sometimes colour)
Having read, and signed a cancellation policy issued to them, right from the beginning of using your services or product, most clients will know and understand they are financially responsible for their sessions or time using your service. With this, normally brings a reduction in the number of last minute cancellations we see. As clients know they will be the ones out of pocket.
As well as this, having a cancellation policy in place often means your clients will stay accountable and keep on track (something that’s particularly useful if your business is within the Personal Training, Fitness or Coaching industries).
However, on the flip side, if next time your client feels a little tired last minute, or has changed their mind about their scheduled time with you - you still get paid!
Income. It’s all about that bottom line. Simple.
In the real world. Things happen. People get sick. Something comes up. Work creates barriers. Family issues arise. After all, we are all human. Statistically, we find and advise our clients they should expect to between 15-20% of clients to either cancel or request to be rescheduled during any given week.
Cancellation Policies can be unique and specific to your business type and work load. So while it’s up to you to decide how much advance notice you require within your policy, having no policy means a potential loss of income between 15-20%, during any given week.
Yes, we all have those clients who will never cancel and always be on time (we call these clients ‘Unicorns’), but on the flip side to that, we also have those clients who will always cancel (we call those clients…)
Consistency. Let’s not have a repeat of this, shall we.
A cancellation policy that is enforced is one that will likely prevent any repeat offenders in terms of cancelling, no-shows or even rescheduling at the eleventh hour. Similarly, it will also filter out those client types who are used to just cancelling or not showing on their allotted time - in any service they use. If a client, or potential client, doesn’t respect your time - you don’t want them as a client. Simple.
Without a Cancellation policy, you can have none of the above. And without any of them, you are completely discrediting yourself as a business providing a service. A large portion of self-employed life comes down to time, and how we manage our time in order to maximise our income.
Simply put, by allowing your client to control and dictate your time and schedule, means your client is controlling your business. [mic drop]
Top Tips for writing an enforceable Cancellation Policy for your business!
Fair & Balanced. Like we said, two way street.
Well, like everything we’ve put above, a fair cancellation policy must be just that: fair. It must be balanced and apply equally to both parties - the client and you.
Far too often we see clients propose a policy by where the client will be charged and suffer at times when they cancel/reschedule, but not them, the business (you, in this case). Your policy needs to be fair and apply to all parties. It’s basic standards within any contractual agreement.
If your policy outlines timeframes and required notice periods for cancellations or reschedules - you need to be doing the exact same. If you don’t - you should be providing your service free of charge for that client (or where there is cost of services/goods required, at a discounted rate from your standard charge). Fair is fair!
Enforced. No matter the weather.
If a client fails to meet the requirements of your policy, you enforce the policy. No matter the situation. Irregardless of what’s going on with your client, you are running a business and providing means for yourself, and sometimes others. So, it’s important (and we really stress this), that you enforce your policy always.
Choosing not to do this, or by taking the ‘Awk don’t worry about that this time’ approach - completely discredits your policy and pretty much voids it completely. The policy is there to be enforced. And similarly, you have to ask yourself: where do you draw the line? For example - if someone is sick. What is ‘sick’? Is it a mild headache? Is it a cold? A flu?
If there is a policy. It gets enforced. Simple.
Notice Period. It must be realistic. And it must be consistent.
Most cancellation policies we produce for our clients feature a notice period of somewhere between 12 & 48 hours. This section is completely up to you, and all depends on your work load. And while it might be all too tempting to just jump in there and ask for as much notice as possible, remember - we’re saying that you have to adhere to the same rules. So be realistic.
We suggest never going below 6 hours, and never above 48.
No Exceptions. Give an inch. They’ll take a mile.
We’ve covered this, but it’s an important one, so it gets two. Don’t allow for exceptions. For example, sickness. Clients will abuse these loop holes, particularly when you suggest them by featuring them within the Cancellation Policy writing.
If clients know they can get out of paying for a missed appointment by claiming they were sick, you know all too well it’s going to happen. Enforce the policy. Take the money. Go home happy.
