6 Ways to Avoid Bad Clients in your Business
As you grow your client-facing, service-based business, it’s inevitable that you’re eventually going to have a “bad client.” It’s really just a numbers game. Not every single client is going to align with your personality and values or be a dream to work with. Over time, you’re going to understand the client traits that light you up and make you enjoy the relationship, and the ones that drain your energy or end up in conflict. Take note of these client traits so you can reflect on them the next time you are determining whether or not to work with someone.
Personally, it took me a long time (and almost a career change!) to realize that the clients I was previously working with were making me miserable. Before I started Contracts Market and my law firm, I was working with big corporate clients who, to be honest, were not the people I wanted to be spending the majority of my working hours with. They were draining my energy and to be honest, my soul!
Now, just because I’m now working with clients who mostly light me up, I have come across a few that just don’t. In my law firm, I’ve also advised other business owners about how to avoid bad clients and also navigate out of client relationships that are going south.
Remember, you don’t need to work with everyone who is referred to you or knocks on your online door. I truly believe you need to be very choosy with the types of people you want to work with, because ultimately, they have a major impact on your schedule, your energy, and your attitude towards your business.
In this blog post, I’m sharing a few ways to help you weed out and avoid those bad clients so you can truly enjoy your business and those you work with.
6 Ways to Weed Out and Avoid Bad Clients
#1: Be REALLY clear about who you want to work with.
When you’re just starting out in your business and you’re just trying to get by, you tend to take on a broader range of clients. As you learn what types of clients you love to work with and those you don’t, take note of those client traits. Then, revisit those traits as you begin to niche down based on who you love working with and the types of industries you love supporting in your business. This will make it easy to spot a bad client right away.
#2: Keep a list of client traits that drive you nuts.
Keep this list of client traits handy anytime you’re looking to bring on a new client. These traits should be considered right from the get-go and your initial conversation.
For example if you despise tardiness and your potential client is 15 minutes late for your initial call, that’s a major red flag. If your client workflow is super high-tech, but your potential client jokes that he/she can barely manage their email, again, that’s a red flag.
These traits don’t make them a bad person, they may just not be the right client fit for you. Chances are, if you did end up taking them on as a client, those traits would show up later on and not only continue to drive you nuts, but may also lead to major resentment on your behalf.
#3: Know your preferred client process, and stick to it
You don’t have to have a verbatim client intake script, but when you have a problem client, ask yourself if there was a question you could have asked in your intake form that could have helped you figure out sooner that it wasn’t a good fit.
A fellow business owner and I were chatting over a coffee one day, and they said that they hated when a client would send them multiple emails “just checking in” before the services deadline had come. They felt this put so much more pressure on them, even though they were on track, and totally popped their creative bubble.
For another friend, she loves having a few calls and quick check-ins to update her clients along the way before the deadline comes. We laughed, because as a client, I would hate this. I prefer to hand off the work and just get a pretty close to done deliverable in my hand before I see it.
In the first instance, my friend could ask more questions in her intake form about how their client would feel about not having much contact between receiving everything they need to start the project and when the first draft of deliverables is provided. In the second instance, being clear about communication expectations with your client, such as how many times they need to be available for meetings and confirming this works for them would be a great way to see if they are compatible.
#4: Review your Contract Terms during your Initial Call
In this initial client call, it’s important to discuss what your client can expect to see in your client services contract regarding the important points. These include items such as how you collect payment regarding retainers, ongoing payments, delivery timelines, copyright ownership and how your client can use those deliverables etc.
Discuss your communication expectations, office hours, and email response time; be clear about your boundaries and how you manage YOUR business. If they have issues with these items during this initial call, that could be a red flag that this is not a good client fit.
#5: Listen carefully to how your client talks about their team, previous contractors or employees, and the other people around them.
When it comes to bad clients, it’s likely that there are patterns of behaviour that can inform you of what type of client they really are. If you are the 4th person trying to get their website over the finish line because no one else “gets the vision,” then that is another red flag.
If they’ve gone through multiple VA’s or only talk negatively about their “competition,” this can inform you that they may not be a good fit for you and your business. I think it is a great idea to ask this question during your initial discussions as their answer may show that they just cannot be pleased!
#6: Stop work the moment payment is late and have this VERY clearly set out in your contract.
If their payment is late, please, STOP all work until you receive your compensation. Having this policy clearly set out in your contract will help back you up in the case that this happens.
I’m not a huge fan of having the bulk of the payment due after all final deliverables are completed and delivered. I’ve heard of so many horror stories where business owners are left with huge outstanding invoices and time wasted on projects that they aren’t going to be compensated for.
To avoid this, clean up your payment terms and collect a retainer that can be drawn on for late invoices so, even if your client cancels or breaches the contract mid-project, you’re not left high and dry.
The Importance of Contracts with Bad Clients
Even if you do all of these things, it’s inevitable that you’ll have a problem client or two along the way. Don’t beat yourself up - remember, the longer you’re in business it’s inevitable it will happen to you!
That’s where your contract comes in. Let your contract be the bad guy that you refer to in those awkward situations with bad clients.
If your client cancels midway through the project and you charge a termination fee, when you send your final invoice with that fee included and your client objects, a simple “as per the terms of our initial contract” will do. You don’t need to have a special meeting or argue back and forth via email. In these situations, there is no grey area. What’s in the contract is final and if they don’t honour the terms, consider hiring a lawyer to help you enforce it. As a lawyer who does this kind of work for my clients often, it is so much easier to write an enforcement letter (1) when there actually is a contract, and (2) the contract is clear, concise and coherent.
When your client asks for more check-ins, remind them of your communication policy. When they want more revisions, tasks completed, etc, give them a simple reminder about what they agreed to.
If a request is is outside of the scope of services they agreed upon in your contract, it’s your job to remind them that their request is not included as part of your fee and let them know they’ll be charged for these additional services, and then confirm with them whether they want you to proceed with that additional work.
If you’re looking for more support in dealing with these types of situations in your business, check out my blog post giving you tips on how to deal with scope creep in your business.
If you want a great contract to support your business and help protect you from bad clients, I’ve created industry specific client service agreements you can check out here. Your contract gives you an easy way to approach any tricky subjects while still protecting your time and energy. Your contract is there to be your back-up, so make sure it’s set up properly and working for you.