Goliath Cheats David:

A small catering company reached out to me after they were contracted by a large new car dealership to cater an event. The agreement was for 50 people, the caterer was surprised when approximately 125 attendees showed up. The caterer had communicated throughout the event that they could only provide meals for the agreed number and that any additional servings would incur extra costs. The dealership assured them they would address it at the end of the event, but afterward, the caterer was informed there would be no additional payment. The caterer now believes this is a tactic the dealership regularly employs to take advantage of small businesses.

There is no one-size-fits-all approach to addressing this type of situation.

First, the dealership has made it clear that they do not want to pay more, regardless of the extra meals served. Pursuing additional payment could lead to a confrontation, which raises the question: is it worth it? This scenario is a David versus Goliath; the caterer is up against a well-established Toyota dealership that has significant influence in the community. If you want a Toyota, this is the only dealership.

Second, in the age of Yelp and online reviews, the stakes are even higher. The dealership employs many people in management and sales who could potentially unleash negative reviews on the caterer. A coordinated attack on the caterer’s reputation could severely damage their business, while the caterer’s ability to retaliate against the dealership would be limited. Engaging in a battle with a much larger opponent could make pursuing the additional payment risky.

Third, collecting the owed amount takes time and resources. This caterer is out $500 to $750—significant for a small business but not enough to cause catastrophic damage in today’s economy. If pursuing this debt consumes 10 hours of time, it’s essential to consider what that time could be better spent on. For example, 10 hours devoted to marketing could yield more than $500, especially if it results in new, repeat customers. Time is often better invested in generating revenue than chasing old debts.

I understand this isn’t the news the caterer wants to hear, but it reflects the reality of running a small business: you win some and lose some. However, there’s a valuable lesson to be learned here. I recommend implementing a ticketing system for catered events: when a client books for a specific number of attendees, they should receive that same number of tickets. This way, attendees must present their tickets for meals, clearly establishing the limit.

Additionally, it might be wise to inform the client that the amount of available food will not exceed much more than number of meals ordered. Bringing 2 1.2 times the necessary food to the dealership's event placed an undue burden on the caterer. If it had been clearly communicated that the food supply would not meet the needs of the 125 attendees—who the dealership was aware would be seeking meals—the embarrassment would have fallen on the dealership instead. Maybe have extra food, but do not let that be known.

Lastly, it’s crucial for the caterer to avoid complaining about the situation—to the dealership, its staff, other vendors, or anyone outside their team. Complaining can create friction and provoke defensiveness from the dealership. Other vendors might side with the dealership, further complicating matters. Instead, the caterer should maintain a positive demeanor, move on gracefully and quickly. If the dealership approaches them for future events, it would be prudent to politely decline, saying, “I’m sorry, I’m booked and can’t accommodate.”

Focus on the lessons learned and the improvements that will be made in the business. With these changes, similar issues are less likely to arise in the future.

Key Lessons:

1. Recognize the Challenge: Large companies may take advantage of smaller businesses. If you must fight for payment, consider moving on quickly and gracefully; disputes are unlikely to yield results and can create unnecessary conflict.
2. Implement Preventative Measures: Always seek ways to improve. For example, a ticketing system for events can clarify meal limits and promote transparency, even with well-meaning customers.
3. Maintain a Positive Attitude: Stay optimistic and focus on the lessons learned. Your commitment to improvement will lead to greater success!