One of the biggest surprises for people setting up their own business is how hard it is to get paid. It’s therefore well worth investing some time on how you can best identify prospects who are likely to be timewasters, bad debts or just inappropriate.
The obvious problem here is the fact that most start-ups don’t feel they are in any position to turn down business. However, though it may seem counter intuitive, accepting a ‘bad client’ cannot only have a detrimental effect on your business as the time but can adversely affect your business in the future.
To understand this and to work up the courage to say ‘no’ it is worth investigating exactly what constitutes a ‘bad client’. In short, a bad client represents a mismatch. This mismatch can be practical in nature or it can be ethical.
A practical mismatch is easier to turn down. It is not uncommon to be approached by a potential client whose problem does not match the solution you are providing. They may require someone with skills very similar to yours or have an issue that is appears to be very close to your area of expertise. However, if it is not what you do then it can be a dangerous road to go down.
Turning your hand to a similar line of work to your own can seem well within your grasp but if your client requires a service that you do not there is ample space for a divergence in expectations. An unsatisfactory conclusion cannot only lead to problems getting paid for the work at hand but can damage your reputation in the long term. People will not necessarily pick through the backstory to discover that the client had unrealistic expectations with regards to the service you provide, they will just see an arrangement that ended badly.
Whilst you may only have yourself to blame for accepting work for a mismatched job, whether or not to accept work from a client with mismatched personal standards is a trickier question. We have discussed at length the importance of setting your own high standards of professionalism, honesty and trustworthiness. If the standards you’ve set yourself are conspicuously absent from a potential client (say their communication or organisation is not near the level you would accept from yourself) then alarm bells should ring.
This is when rational thought is required as opposed to emotional reaction. It is perfectly understandable that a start-up may need to work with clients who are not ideal in order to pay the bills and make ends meet. However, fear is a strong emotion and when it kicks in we humans are often keen to lower our standards sooner than we would if we thought the situation through. The situation is not always as desperate as our initial fear leads us to believe and a timewaster or bad debt is no way out.
If, however, you do need to lower your standards or increase your tolerance, keep two things in mind. Firstly never forget that you are making ends meet. Don’t let a temporary arrangement come to represent a permanent lowering of standards or ‘the shape of things to come’. Approach each new prospective client with your original, high expectations. Secondly, ensure you don’t operate without the safety net of a contract.
When a prospective client is sending out all the wrong signals, explaining that you’re not in the same place and eventually saying no can seem like an incredibly tough ordeal. The experience of selling out your principles to work with a client who lives up to your expectations as potential trouble is far, far tougher.