JoAnn Laing's Blog - All About Small Business

Every small business manager or owner has a story or few encounters with bad clients – someone who demanded the impossible, nickeled and dimed a project, used profanity during business calls, and threw tantrums about deadlines.  If you ask around, no doubt you will hear about client encounters that may shock you for their audacity and unreasonableness. 

So what are the early signs of a bad client?

• The client starts making unreasonable demands from the beginning and continues.
• Early in the relationship, the client is skeptical of your abilities; this happens twice as often for women than men.

Some of the most common types of bad behaviors include:

• Being mean and/or abusive to you or your team members
• Being dishonest
• Not paying on time or at all
• Costing more time and effort than the revenue/profit they bring to your business

All are unacceptable, but only about a third of small business owners fire their clients, and the majority continue to work with their bad clients.

If you decide to fire a bad client, here is how to do it professionally.

• Finish any work in progress.
• Use email to put it in writing that you will no longer provide your offering(s) to the client.  Thank the client for the opportunity to work together and then provide a reason for not doing so going forward.
• Then follow up with a telephone call to ensure your client reads your email and understands that you won’t work together anymore.  Your call is also an excellent opportunity to discuss the next steps, such as returning any necessary files and/or collecting an outstanding balance.

Remember, never fire a client when you’re angry. If you are tempted to have a heated conversation with a difficult client, sleep on it before making any rash decisions.

If you decide to keep a bad client, here is how to manage better.

• First, identify what makes your client so difficult to work with.
• Then, create and implement the right strategy to transform your client.

Here are some common issues and how to handle them; hint, the primary tool is communication via email:

• Late Payment – send reminders at specific intervals (5 days, 30 days, or even 60 days) of when payment is due.
• Having too many Chiefs on a project – via email, designate the lead person in your business and in your client’s.
• Not respecting your time by expecting you to be available 24/7 and/or the client runs on tight deadlines – again, a carefully crafted email that sets boundaries and establishes workflow with time frames helps.
• Poor or lack of communication – give your client a gentle nudge via email.
• Out-of-scope requests – inform your client via email of additional fees associated with additional work.

Finally, here are some steps for you to get better clients.

• Define your perfect client – this will give you criteria that you can use to assess all future clients.
• Discover where your ideal target clients hang out – determine what social media platforms they use and/or in-person events they attend.
• Find and connect with better clients – consider writing content that establishes you as a thought leader or that is relevant to better clients, be active on your target clients’ preferred social media platforms, and attend gatherings where you can interact with target clients.
• Perfect your pitch – be sure it is on-point, tailored, and directed to the right person.
• Offer unique value – communicate your unique merits, and include them consistently in all your communications, such as on your website and when speaking with potential clients.

Clients bring in revenue and can make referrals for your business.  Dealing effectively with bad clients and preferably finding better clients is essential to your professional well-being and the success of your business.

Cash flow problems occur as your business experiences uncontrolled growth, the economy takes a downturn, a major client suddenly leaves, or something else unforeseen occurs.

Let’s examine some of the issues that cause cash flow problems and what you as business owner, leader, or manager can do about them.

Inter-related issues include:

• Incorrect forecasting of sales, inventory requirements, and expenses
• Inaccurate accounting or bookkeeping practices
• Wrong business plan
• Erroneous market research

One or more of the above can result in cash flow problems.  To address this, it is essential to have good data and use it appropriately to manage and profitably grow your business.

Other issues and some solutions*:

• Lacking cash reserves and/or too much debt – find investors or make a capital call/invest more money in your business or cut expenses.

• Decreasing sales – run a sale or promotion; but consider the effect on your margins.
• Lower profit margins – raise the sales price, but consider if your price will be competitive and whether you will lose sales and not move inventory fast enough.
• Outstanding receivables – offer cash discounts; take credit cards; factor your receivables.
• Too much inventory – slash the sales price and move it out with a promotion such as a BOGO

• Expensive borrowing – shop around for best rates from financial lenders, and consider a loan against your assets; other places to ‘borrow’ are your vendors, see if you can get your terms extended to free up cash.
• Uncontrolled business growth – that scales too rapidly can be a challenge; double and triple source vendors and partner on offering (hold inventory and ship directly) and financial terms.
• Seasonal changes in demand – limit volume and rise prices or utilize outside resources to meet higher demand.

All these issues can be fixed. The crux of the matter is do you want to tackle the problems? It takes a decisive, focused leader to handle, but your business will be healthier for your actions.

But whatever the corrective outcome is, action needs to be taken now, not later. You cannot spend profits, but you need to pay your debts.  You need to act with alacrity on cash flow problems to have a positive cash flow.

* Note there are downsides to every solution. You need to spend time and model the effect on your business and cash flow before you implement these tactics.

Hiring the best, most appropriate talents is critical to your organization’s success. Hiring well is an essential ingredient to your business’s long-term growth. Yet, the hiring process is often the most difficult, and the outcome is easily prone to failure.

Here are some ways to hire better.

Assess your company’s needs before hiring. Be very clear on why you are hiring. Specify what needs to be done at what level and for what duration.

Some ways to fill your hiring needs:

• Train and develop an existing employee; it’s great for morale and retention.
• Bring on a part-time or contractor to do work; you will save on benefits.
• Hire a new full-time employee with the skills needed today and tomorrow.
• Consider part-time help; you can assess workers plus meets your limited business need and/or budget.
• Workers share one position, provide coverage, have no benefit costs, learn from each other, and you might further diversify your workforce.
• Use a contract worker if the need is limited to a project or the business is fast evolving; plus, it is a great way to test out a potential employee and not pay benefits.
• Leverage seasonal worker(s) to meet surges in demand.
• Capitalize on your relationships with vendors, and have them provide additional services for a fee.
• Buy automation to supplement your workforce; purchase makes sense if there is an ongoing need and a return on investment.
• Lease an automated service if your need is transitory or expensive or if the technology is changing fast.

Okay, you have decided what type of worker to hire; now, you need a process/methodology to optimize the outcome.  Here is how:

• Make a marketing plan to attract good candidates.
• Advertise where the type of candidates you are seeking hang out.
• Look very carefully at the candidates who apply and go after dream candidates.
• Create measures of accountability for the position(s) being filled; also establish goals with time frames.
• Train those doing the interviews on what to look for, what questions to ask, and, equally importantly, what questions are illegal.

• Have a uniform process to assess candidates and evaluate them against each other.
• Make sure the hire ‘fits,’ he or she embraces the organization’s purpose and buys into its core values. Plus, consider if the person under consideration is ethical and will represent your business well.
• Do a background screen and drug test; the cost is nominal when considering what you can uncover and avoid*.

Make a reasonable offer that will be accepted; then, onboard your new hire carefully and match your process with the expectation established during the interview process. As a result, you will have a good hire to help your business’s growth and profitability.

*A poor hire is considerably more expensive than a good hire. A poor hire can ruin your company’s reputation and brand, steal from the organization, disrupt your culture, and much more. So hire very carefully.

The competition for your customers has never been higher. Your competitor is not limited to fellow small businesses; large global brands and mid-size businesses are in the mix. As a small business leader, you can avoid being overshadowed by these antagonists. Small businesses have many advantages over their larger competitors in both the physical and digital arena.

Let’s take just one trust in small businesses (86%) versus large companies (55%) is an advantage. Plus, a considerable level of competition is necessary for a small business to achieve greater success.  

First, let’s look briefly at why competition is good.

Prevents Complacency – competition pushes business owners out of their comfort zone, and they are driven to take a closer look at their offerings, customer service, marketing, business structure, and more. 

Stimulates Innovation – competition encourages business owners to find new ways to deliver their products and/or services; also, be creative with marketing, customer interactions, and other areas.

Avoid Committing Mistakes – competition enables a small business owner to try new ones that work for your company rather than using the faulty strategies and tactics of others;  

Realize on the Right Path – competition ensures the direction taken is good and provides something people/businesses need.

Think Like Customers – competition forces business owners to reflect on his/her customer experiences and understand what areas of the business model customers love and what parts need improvement.

A small business can grow with the right amount of competition, focus, strategy, perspective, and Innovation. Hence, competition plays a significant role in the evolution of any small business.

Let’s look at how your small business can stand out and succeed in today’s competitive environment.

Know Your Business – What are its strengths? How do its customers perceive it? In today’s world, comments can be found online; consider the sentiments most often expressed about your business. Amplify the favorable. Address negative comments immediately and determine ways to minimize or prevent them from reoccurring.

Define its Value – What is unique about your offerings? What makes it different from others in your niche? Determine your business’s unique value proposition and share it with prospective and existing customers.

Know Your Customer (KYC) – Be aware of the customers your business attracts and additional customers you might want to do business with. Consider why they buy from your company: customer service, price, value, uniqueness, location, easiness, and/or something else.

Solve Customer Problems or Fill Wants – Offer solutions to problems that your potential and existing customers have. Research of the marketplace, your competitors, and your customers will surface gaps your business can fill. Then provide an offering that solves the problem (or fills the want), and your business should generate revenue and garner market share.

Identify Big Markets – If possible, find a large market for your business, then focus on dominating a subset before expanding into niche markets around your initial sub-niche. You will begin strong and growing steadily.

Focus on Innovation – Make changes to existing offerings by introducing new methods, ideas, or products. Compare your products and services with competitors and then outdo them; be better to draw customers.

Make Decisions Faster – Being small has the advantage of a quick turnaround for decision-making or product innovation; your business can be agile, adapt and change with the market.

Offer Great Products and/or Services – If you provide outstanding offerings, encouraging word will get around about your business. You will gain repeat and loyal customers as well as new ones. 

Keep your offering(s) great, and your business will be competitive.

Define Your Brand – What is your business’s customer experience(s)? You want to stay memorable. Think about what differentiates you from others, unique, better. Branding takes time to build into a potential customer’s mind, so your messages need to reiterate and be consistent from your logo to your social media/over the phone/in-person to your company culture.

Select an Appealing Name and Great Logo – A memorable name and an eye-catching logo can strengthen your business. It should be easy to recognize and appeal to your target audience. Further, it should reflect your brand’s personality, the products or services it offers, and the overall character of your business.

Build a Website Experience – Your web presence should be mobile-friendly, as most people checking out your website today do so from their mobile phones. 

You want a user-friendly design that cultivates trust and provides the information your target customers seek.  

Market to Specific Groups – Target people with a specific want or a problem you can solve. Understand who is attracted to or benefits from your products or service. Then position your business as the go-to source. 

As a specialist, you may be perceived as an expert or purveyor of better quality.

Become the Expert – Demonstrate this by providing great content; it will inform your target audiences and give them a reason to reach out to your business and purchase your offerings. Types of content to position you as the expert include: publishing thought leadership on your website, guest blogs on reputable websites where your target audiences are, and providing interesting or valuable data that your audiences seek. Consider creating a desirable free offer demonstrating your understanding of the target audience’s want/need and how you can fulfill them.

Empower/Develop your Team – A strong internal team that feels valued makes all the difference for business operations. Make sure that employees have a say in the direction of the company and leadership is accessible to employees so that their concerns and questions are addressed fully. Also, set aside time to discuss and track professional development goals with each team member. 

Make Your Store (if you have one) Enticing – Your first and repeat impressions are essential. 

Create a great in-store experience that will make people come to your place of business to explore and buy. 

Here is how:

• start with your target customer in mind;
• appeal to as many of the five senses as possible;
• show your customers about your offerings, don’t tell them;
• use light to capture attention;
• keep your store fresh and inviting; and
• organize and decorate, if you need it.

Be an Advocate – If you are passionate about your business, your sincerity for the brand will shine through when you share it with others. Communicate your business’ mission, stories behind the offerings, customer examples (with permission), etc., to bring life to your company and distinguish it from others. Perhaps others will become excited about your business too.

Communicate with Customers – Get customers’ feedback on your offering (sales process, product, service, etc.). This information will enhance your business and develop strong customer relationships. A few ways to get customer feedback include surveys, feedbox boxes, usability testing online and in physical locations, and direct contact. 

Build Solid Personalized Relationships – Make an effort to stay in touch with targets, prospects, and customers. Provide insightful tips, unique data/knowledge, discounts or favorable pricing, and more so they get to know your business better. Perhaps they will follow your business on social media and open and respond to your emails.

Provide Excellent Customer Service – Great service matters to your customers. A customer is four times more likely to buy from a competitor if the problem is service-related rather than what is the asking price or product-related, according to Bain & Co. Figure out how to service your customers well and do it consistently to build their loyalty.

Be Present – Find a way to be the face of the business with your employees and customers. Be actively engaged inside your business and within the community.

Build a Community – It takes time and dedication, but if you build a passionate online community, you may gain the trust and respect of current and future customers. Social media platforms can effectively build community; consider which ones your target audiences utilize. Support local fundraisers and events and/or help out in community projects; it shows your customers that you care about them and where you live. Being involved at the local level creates those authentic and long-lasting relationships with customers.

Offer a Trial or Guarantee – Consider a free trial or even a money-back guarantee on your offering; it will reassure customers that what they buy is worth their money. If you are the only business in your niche providing this incentive, it will help your business stand out and pull more sales than competitors.

Technology – Select the best software for your employees and customers. Small companies have a considerable advantage in changing and adopting new software quickly and efficiently. This flexibility can save your business time and money and allow you to provide a better overall customer experience to your customers.

Summary

Achieving greater success is often helped by the company facing a considerable level of competition. Some ways of turning a competitive landscape into one where your company is successful include:

• know your strengths and your customers;  
• identify ways to distinguish your business; and 
• then, deliver consistently.

There needs to be more than just knowing your company’s strengths and best strategies, you need to put them to work to see positive results.