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Sunday, August 2nd, 2015


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The Three Types of Clients

I received a call a while back from an entrepreneur who was thrilled to have landed the “big fish.”  He pulled in a client who just signed a six digit deal, the biggest his entrepreneurial startup had every seen.  A couple months later, the entrepreneur wasn’t so happy any more.  The money for all the work he did never showed up.  There were a few drips and drabs, but the six digit deal barely yielded five digits of cash.

In retrospect it was obvious this would happen. The “big fish” client had a history of sticking it to vendors.  Their modus operandi was to request big projects, talk how “money was no object,” rush the jobs through and then start a series of disputes and even legal proceedings to cut down their cost to practically nothing.

You probably have even experienced the same thing to some degree or another.  And, if you haven’t it is surely coming down the road.  Either way you can avoid it from ever happening to you by realizing there are three types of clients, and three unique ways to deal with them. Here they are in order of their value to you:

Paying Clients. These are clients who engage your services and pay for it.  You think this would be all clients, but for all too many businesses this is only the meager majority.
You need to cultivate these clients.  Build them into long term relationships by setting agreed upon expectations, and then exceeding them.  Rinse and repeat.

No Clients. This sounds like the worst case scenario, right?  I mean, what is worse than having No Clients?  Believe it or not, no clients means you have the time to seek out Paying Clients. No Clients means no distractions.  Get busy selling to Paying Clients.

Non-Paying Clients. Funny enough these are usually the most heralded clients, yet they can destroy a business.  They often come with big ticket demands, and then never pay for the services rendered.  It results in a double whammy.  First you incur costs to deliver goods and services, then you don’t get paid.  Do you see now?  No Clients cost you a lot less than a Non-Paying Client.

The key to avoiding these black holes is looking at every prospects history. Yes you can request referrals about a prospective client… I mean they are asking you for referrals after all.
Here is the short and thick of it.  Avoid the Non-Paying Clients at all costs.  Just by avoiding them you automatically put yourself in the better position of having No Client.  And when you have No Client, you can get busy seeking out Paying Clients.

For more great tricks & tips visit The Toilet Paper Entrepreneur.

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