Q: I have been teaching piano for 13 years. It is my main source of income, and I love doing it. The problem is that every so often, one of my students quits with little or no notice. My professional reputation is good enough that current or former students will recommend me to new clients, but sometimes it takes up to several months to find a replacement.
After it happened several times, I instituted a policy of asking for either one month's notice or payment for that month. Everyone signs the policy agreement, but when it is inconvenient for them, they ignore it. That leaves me in the lurch financially. It has now happened for the second time in seven months. I try to be flexible, but it's a slap in the face that folks are so cavalier about my livelihood.
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Is it worth going to small claims court over a few hundred dollars? Landlords protect themselves by asking for a security deposit up front, but could I legally do that? If not, how can I protect against losing my insurance or some other financial disaster?
A: If lost income affects your ability to make ends meet, that seems worth a trip to small claims court. But you should weigh that option against the costs of filing the claim -- and of potentially striking the wrong chord with former and future clients in a word-of-mouth market.
Before hauling deadbeats to court, try resolving the issue personally. Start with an email or letter expressing what an honor it was to teach them, wish them all best, and politely remind them of the agreement they signed. The next letter, a month later, should be more urgent, expressing concern at the prospect of having to take legal action. Keep copies of everything, in case you end up in court.
And it's time for a new policy: To keep monthly rates low, every new contract requires a deposit -- say, one month's tuition, refundable with 30 days' notice -- to reserve a lesson slot. You'll want to consult a business attorney on the applicable state laws and store the deposits in an escrow account -- but generally, you're entitled to charge whatever people agree your services are worth. And you're entitled to demand at least as much commitment from them as they expect from you.
Also, as landlords -- or any month-to-month service provider -- can tell you, it's easier to collect payment from customers while they're keyed up about a new hobby than when their enthusiasm has gone flat.
• Miller has written for and edited tax publications for 16 years, most recently for the accounting firm KPMG's Washington National Tax office. You can find her on Twitter, @KarlaAtWork.