Keeping the RIGHT clients

In my line of work, and I reckon in yours, half of the knack of building a good business is in avoiding the D4s.
What do I mean?
You rate your customers in two ways.  One to four is on fees, or the income they generate for you.  One is good and four is bad. 
A to D is how much of a nuisance they are.  How much of your time they take, and how much bother they are to you.  D is bad.
So basically you don’t want D4s, because D means they cause you a lot of trouble, and four means they don’t pay you, and they quibble with your bill, or you can’t charge them that much anyway because they don’t have a lot of money. 
Whereas A1s are your perfect clients, who deliver you everything on time, and they always pay you on time, and they pay you quite well for the work that you do.

D4s are business breakers

If you have a D4, you’ve got a choice.  You either turn them into a D1, so even if they cause you a lot of trouble, at least you get decent fees out of them. 
Or you charge them so much that they get frightened off.  And they can go and be a D4 for someone else.  Result!
This is not just an exercise in heartlessness or greed. The main problem is that D4s are business breakers.
If you have to devote all your time to a string of D4 clients, you won’t have any time to commit to building your business, to finding and looking after A1 clients.  So even if you are working very hard, if you are not being paid adequately or at all for the work you do, your business will fail.
It can be very difficult turning down clients, in the early days especially, but do not be tempted, and remember that a D4 is just not worth the effort.

About the author

Kate Robathan 1
Monday, 25 June, 2012 - 18:25
United Kingdom

Kate is an accountant who works with small businesses