Archive for the ‘Recession’ Category

8 Types Of Client To Avoid At All Costs

Saturday, June 18th, 2011

No matter what industry you work in, you will meet both good and bad clients.  Of course, to make the absolute best from your business, it’s important that you attract as many good clients as possible and avoid the bad ones at all costs.

 But how do we know what makes a bad client?  Thankfully, they are pretty easy to spot and also (on the whole) fairly easy to deal with.  Here is my list of the most common types:

  1.  We all want to make it easy for new clients to pick us, so in a lot of industries it is now the norm to have a free initial consultation.  This gives us the opportunity to showcase our talents and convince the prospect that we are his/ her best choice for the job.  However, occasionally, we will meet “Mr Something for Nothing”.  This is the guy who uses the free meeting to gain the absolute maximum amount of technical information as possible, often with no regard for the cost of your time.  If you are a lawyer, he will possibly want all his legal working discussed in that first  meeting.  Luckily, this guy is easy to avoid by setting out the “rules” of your first meeting, and sticking to them (however tempting it might be to give more in order that you can “seal the deal”)
  2. The “Dreamer” prospect has unrealistic expectations of what can be achieved and what the budget should be for doing so.  I’ve had many conversations with digital clients who tell me similar stories of prospects who ask them to “build the new Ebay/ Facebook/ Google” with a budget of £500.  The secret to avoiding this guy is to create a list of high quality questions that you can ask before agreeing to a meeting with them.  These could be around project timescales, overall framework, background to the idea and the prospect, maybe even budget.  It will save you a lot of time!
  3. The Scope Creep client often agrees to a project specification and a price and then starts adding those little extras in as you go along.  For example, the guy whose laptop you fix for a pre agreed price who then expects you to fix his printer as well, for free! Or the bathroom you fit for a customer, who then expects you to do half a dozen extra plumbing jobs around the house “whilst you are there”.  Be careful, these extras, soon mount up.  To avoid scope creep, document what is included in the price and maybe even include a list of what isn’t and typical prices for doing these tasks.
  4. Have you ever been told “XYZ down the road are cheaper than you”? Then you’ve met the Discount Seeker prospect.  He’ll often low ball your fees with promises of loads of future work (which never materialises!).  His cheapness is often seen to match his ability to be ever demanding of your time.  Know your worth and stick to it!  If he wants a cheaper price, then take something out of the deal to match his budget.
  5. The Discount Seeker is often morphs in to the Time Vampire.  This is the client who e mails you regularly, often without reason and who expects an instant response.  If you don’t provide one, he’ll be calling you within the hour to ask why not! He may want regular meetings “just to stay in touch”.  Ask their expectations up front and agree a support package to suit them and their project and then price properly for it!
  6. The High Profile Client often will lowball your fees in the same way as the Discount Seeker, but will justify his move by claiming “As a high Profile client, my XYZ project will be great for your portfolio”.  Unless you are planning a targeted strategic move and need this client’s testimonial in your portfolio desperately, avoid his ploy. It’s just his way of getting his work done cheaply!  Try telling him that you provide first class service to all your clients and it would be unfair on the others to subsidise him.
  7. The Impossible to Please client will constantly bombard you with complaints, changes, queries, price objections and will almost never say thank you, even if you have really gone “the extra mile” to make them happy.  Stick to the script and refer back to your brief wherever possible.
  8. The Can’t Pay, Won’t Pay client.  These are a difficult beast to spot!  All starts well when they agree the scope of the work you’ll be doing and even agree the price.  You then do the work and start the waiting and excuses game! Weeks or months will pass and they’ll make no attempt to contact you to discuss the invoice.  When you do speak with them, there will be a raft of excuses for non payment, including the infamous “the cheque is in the post”.  Structure your contracts so that you get paid up front (in part at least) and include milestones and payment milestones within the contract.  That way, even if they default, you’ll only be ever down one stage payment.

 By avoiding these types of clients, you can concentrate your efforts on the good ones, the profitable ones and above all, the ones are that great to work with.

What other stories of bad clients have you got?

Stress proof your business and your life

Friday, August 27th, 2010

Owning and running a business can be incredibly stressful. So we have decided to do something about it by producing a book called “Stress proof your business and your life”.

 You can find it on Amazon at £12.99 – but you are welcome to a copy with our compliments.

 But please don’t be put off by its title, since it is categorically not only for people who are stressed. In fact, one of the key benefits from reading it is that you’ll get dozens of excellent ideas for putting a great deal of extra cash into your business and personal bank accounts.

 There are four parts to the book.

 Part 1, Stress proofing the business stuff, looks at what people can do to reduce and prevent the stress caused by their business and its financial situation. And it provides simple yet effective solutions to common challenges such as:

  • Not making enough profit
  • Running out of cash and other similar cashflow problems
  • Being forced to work more than you want to
  • Having too many things on your to-do list
  • Too much depending on you, and too many things that can only be done by you
  • Not getting the right life-work balance
  • Not having the information you need to make sensible decisions
  • Losing too much of what you earn to the taxman
  • Other people, especially customers and your employees, behaving unreasonably or unfairly

 Part 2, Stress proofing the money stuff, looks at what people can do to reduce and prevent the stress caused by their personal financial situation.

 In these first two parts much of the emphasis is on strengthening the financial and business fundamentals – since they are so often the primary sources of stress and anxiety for business leaders. But strengthening them is also extremely worthwhile for people who aren’t suffering from stress.

 Part 3, Stress proofing the personal stuff, broadens the discussion by explaining how to reduce and prevent the stress caused by the other things going on in people’s lives.

 Finally, Part 4 brings it all together into a practical action plan.

How to get your FREE copy 

So, would you like a copy?  We would be happy to send readers of the blog a complimentary copy….all you need to do is drop us an e mail or call the office on 01422 365981 and we’ll get one sent straight to you.

Lessons From The Recession

Monday, August 9th, 2010

I don’t think many will disagree that the last couple of years have been difficult for most small business owners.  The lack of readily available cash and customers has made some small businesses think hard about what they are doing, whilst some still seem to be content to “baton down the hatches” and await economic recovery.  During this period, the businesses I have seen perform the best have all  possessed similar traits.  They have applied the lessons below and all still talk positively about their business and it’s prospects.  Sure they admit it’s been tough but some of them are experiencing better periods of growth than ever before.  So what have the key lessons been?

 Lessons

Pre recession we were lazy with our financesIf debtor days reached 90 days we didn’t bother too much as the banks would bail us out with loans and overdrafts.  Now we need to live on cash generated from our customers and the effective collection of cash has become a priority.  We didn’t concentrate too much on pricing as there was plenty of business to be had to make up for margin shortfalls.  Now pricing and margins are critical to business success.  We need to avoid models which are just centered around lowering prices and offering discounts, unless there is an infrastructure in place that backs this up.  Price wars rarely work as there is always someone who can do it cheaper than you.

We were lazy with our marketing.  In times of abundance there was plenty of business around and we didn’t have to fight very hard to get at least our natural market share of what was out there.  Now the markets are smaller and customers are more choosy where and how they spend their money.  I remember talking to a mortgage broker not long after the recession had started.  For many of the years prior to the recession he had had constant leads passed to him from estate agents.  He had never had to market his business and was making lots of money.  As soon as the housing market went “pop” he had absolutely no idea how to attract new clients.

 Innovation and creativity in small businesses wasn’t always considered.  There has been an explosion of “me  too” businesses in the good times, businesses which were essentially copycats of all the others in the same industry.  Even now, when we attend networking events, we see many businesses that look the same (apart from the name) and there is no differentiation in their promises or offers.  No longer is it acceptable for a business owner to say that their unique selling proposition is “great service” or “personal service” because that’s what they all claim to offer!  There needs to be clear difference in the service offering, tangible benefits to fit with consumer needs.

 We were lazy with our processes and systems.  We may have had labour intensive businesses, but it didn’t matter because the sheer volume of work available meant we still made a good profit.  Now, we need to think “McDonalds” and ensure that we have systems which help deliver better and more consistent service, which are much more cost effective and efficient than what we are used to.

 Customer service certainly wasn’t king.  How many times have you received poor service in a restaurant or shop?  How many times has it taken your website designer weeks to return your e mails?  Pre recession it didn’t matter as there would be someone else along tomorrow to take their place.  Keeping your customers happy and keeping them coming back for more is now vital to making a success of your business.

 The Frog and the Boiling Water

 I’m sure you’ve already heard the story….If a frog is dropped in a pan of boiling water it jumps straight back out.  It takes action!

 During the last two years I have seen many business experience fantastic growth.  These businesses weren’t necessarily business built up to deal with particular recessionary issues.  They had been around well before the recession started.  However, they realised what was going on around them and took action….they did something.  By considering the above points and taking action they have not only survived, but some have experienced some of their best years of growth.

 What lessons have you learned over the past couple of years?