As small business owners you would like both money and work satisfaction, right? You’ll only obtain these two vital things if you have the right individuals. So, what do I mean by the ‘right clientele’? The answer is your customers need to respect you, value your services as well as compensate you properly. As a small business owner, you do not go into business for yourself to run the risk of losing money or to just break even. You go into business to create money. Part of the responsibility of working for yourself is about knowing your limits and your area of expertise. When you don’t respect these essentials you run the possibility of losing more than you possibly are gaining.
You will see several consultants having a vast client base, but their earnings really come from 20-25% of them. The reason is those clients try to squeeze as much as they can out of their consultants without compensating them. While clients may compensate you fine, at the end of the day those who don’t appreciate your services are not good for your overall brand image either. This is one of the many reasons for identifying your key target demographic and/or ideal customer type.
Recommendations for Business Owners
One of the recommendations I present my business clients is to take stock of their clientele every few months; evaluate each customer in terms of overall direct and indirect profitability. Yes, I did just say that! This may possibly seem like it is entirely about the money but in truth it isn’t. As a result of reviewing your ‘active’ clientele you will be able to honestly make out areas you are establishing for niche marketing focuses; all the while learning which areas you are really honing your expertise as well as reputation.
The word profitability can be replaced with effectiveness. The more effective you are with your clients the healthier your balance sheet will look. When there is an abundance of cash flow, your overall anxiety level is reduced and you can grow to be even more efficient and capable with those clients that are in alignment with you.
Quick Questions for Small Business Owners
Here is an exercise for you: Make a note of every one of your clientele. Ask yourself the following questions while you go through each name on your list:
Helping or Hindering?
Is this client helping me boost my brand image? Yes? Then how are they boosting my brand? No? Do they have the potential to enhance my brand? Again, if this is a no, then why are you still working with them?
Are my earnings from this client proportional to my time investment? Your investment doesn’t merely include the financial; but also how much time outside of your ‘appointment’ do you invest in your client’s partnership experience with you? I will have an hour coaching call, however my time leading up to this hour is approximately 20 minutes, the time following is about 30 minutes. Their rate of pay does not only compensate me for the hour of coaching but also my prep and effective follow-up. Keep in mind, the fees you collect for your services pay for more than just direct time involved with the client.
Being Fed or Drained?
Am I doing justice to my intellect/ability as a result of working with this client? What am you getting from working with your consumers? Is your ‘soul’ being fed by working with my customer or are they leaving you feeling drained? If you are continuously feeling drained then you must ask yourself “Why am I doing this?” If the reason is just ‘for the money’ then you need start reevaluating your response to the second point.
Is the client making unfair demands? This is also referred to as ‘managing’ your customer expectations. If they are requiring or expecting specific assistance from you; ie: an extraordinary amount of time between appointments, distantly related research data etc. then you must reevaluate your responses to point two and three for this client.
As small business owners working through the above four questions, your answers will assist you in deciding which individuals to keep and which ones to referring out. I wouldn’t recommend firing or referring away all your individuals in your ‘reconsideration’ listing. However what you can try is to re-negotiate your conditions of service with these consumers, so they grow to be more profitable, err effective for you.
The ones that fail even this test need to be gently directed to other more appropriate support networks. After all, clients who are not helping you develop and expand in anyway are nothing short of a liability.
An Alternative for Business Owners
An alternative case in which I might suggest letting go of a client is if your personalities are entirely incompatible. Any coach worth his weight in salt will tell you it is better to end a relationship with a client before you it ends due to disagreements based personal or professional differences.
Once you have decided to end your association with a client, honesty really is the best policy. Instead of beating around the bush, you must tell them why you feel you can not work together. This of course doesn’t insinuate you have to be rude. Still the most difficult truths can be made respectable if you are diplomatic in your approach. You may possibly be in for a surprise if you learn your client feels the same way but didn’t possess the courage to say something or initiate change. You may be seen as the hero; resulting in an increase goodwill within your community by placing your clientele in the hands of the right person.
I would love to support you or any small business owners you know to figure out if there are clients who are on the ‘reconsider’ list. Contact me or connect with me on Facebook, Twitter, or Instagram.