When I was 33 years old, a fantastic opportunity came my way. My employer decided to ditch external clients and focus exclusively on the parent company's properties. I was offered the 60-ish external clients if I wanted to take them.
It isn't often an opportunity like that comes along! (And I totally acknowledge my luck.)
However, I didn't say yes right away. I took a couple of days to work up my business plan and, more importantly, my exit strategies. (I'll write about why the exit strategy was the first thing I thought about in another post.)
I ran that company on the side for three years while working full time, and in that time grew the client base from 60+ to 90+ clients before I sold. In that time, I learned a lot about business but these are, perhaps, the five things I never thought I'd learn.
Shocking, I know! Here's a secret: not every client is worth taking on because they will cost you more in communication time and scope creep than they're worth. How can you tell if a job is going to be worth it?
Here's a list of considerations I use to figure it out if I should avoid a job:
- When I communicate with the client, am I able to clearly understand what it is the client wants? Are they good at putting their thoughts into words? Nothing spoils a relationship faster than building the wrong thing then having to refactor on your own dime.
- Do they hesitate to pay a non-refundable deposit to begin work? It could be that they're one of those clients who wait for you to finish the work then try to negotiate on the price. Avoid.
- If they want something automated, do they already have that process manually figured out? Too many clients think automation will build process for them but that is not how it works and I always advise those clients to figure out their manual process first, then come back to me to have it automated.
- Is the client demanding right from the start? Clients that demand exclusive attention and treatment are ones I often turn down, because I like to treat each client with the same care and attention, but sometimes...
... sometimes money is tight and you need to take a job you'd normally avoid. This is when I adjust my rates or pad the estimate to cover the extra time a client will take.
If a committee is making decisions on a project I slap an extra 30% for communication onto my estimate. Does that seem like a lot to you? I've tracked the numbers and it usually still falls short. Sometimes, if I know a client will be making decisions by committee I'll specify exactly how many meetings/revisions they get then encourage them to meet with me only when they've come to a decision. If they really want me to be present during decision-making meetings I charge by the hour for those meetings. Sometimes that helps keep things short and my involvement in the decision-making process to a minimum.
Are you desperate for a job but the client is demanding and a bit of an a$$hole? Charge an a$$hole tax! I remember being on the phone with a client who not only was demanding and overbearing but kept using condescending language and saying he was doing me a big favour trusting me with this project because I'm a woman. Every time he said something that made me mad, I raised the hourly rate. By the time I wrote up an estimate for him the rate was up around $300/hour. That is how much he'd have to pay me to work with him.
He rejected my estimate and went elsewhere. Yay! But if he'd paid the outrageous price, I would've felt compensated for putting up with him.
Warning: If you REALLY REALLY don't want to work with a client, just don't work with them. Don't tell yourself you can put up with it for the money (if they agree to pay your jacked up rates). There have been projects I have been so miserable on I've nearly given up working in web. At the end of the day, I'd rather work two jobs at my regular rate for a great client than one job at double or triple my rate with an asshole client.
Did you know you can fire clients? You can! Sometimes this is the only way to brush off a demanding client or get your sanity back. Things you might want to consider:
- Make sure your contract has an escape clause
- Make sure your contract clearly defines scope
- If they've paid a deposit, offer to give them the work you've done so far so they can take it to another developer to finish
- BE POLITE. It's very tempting to tell them to eff-off but don't do this. You want to part ways as cleanly and politely as possible
Yes, the conversation will be uncomfortable. Yes, there may be anger coming at you for this decision. Try writing out a firing script and procedure ahead of time so you can stick to it even if you're upset or angry. And make sure you have a lawyer lined up in case the client threatens to sue.
Firing a client is always a last resort for me but, man, does it feel nice knowing that it's an option.
This one surprised the heck out of me! I was drowning in clients wanting me to work with them and I was strongly considering hiring someone to help me out with all of this new business! Before I committed to that path, I decided to do some reading and that, coupled with reflecting on the clients I currently had, made me raise my prices.
I lost some business but you know what? Those were all with clients who were trying to squeeze every concession and free bit of work from me that they could while still paying me as little as possible! They were the clients that were the most exhausting to work with because every step of the way involved negotiation and bargaining even if I wouldn't budge on my numbers.
When I raised my prices I still had many clients wanting to work with me, but:
- They were willing to pay my new rate
- They weren't as demanding
- They were just, overall, better clients
The lost business was quickly made up for by the higher rate, my inbox was no longer a battlefield, and my quality of life was better.
Too many people focus on acquiring new clients when there is work that can be done with existing clients!
There is a cost associated with on-boarding new clients. You have to add them to your CRM, figure out how to work with them, build trust with them, and all of that takes time and care.
With existing clients, you already have all of that figured out! It saves you money and time to go back to existing clients with a proactive solution to problems they may not have really paid attention to. Did you build them a website but they couldn't afford your SEO package? Well, flag them for a year later then follow up again! They may have a new budget and can afford it!
Did you just add a new service or product to your business? Hit up your existing client list to see if anyone might want it! This is also a good chance to touch base with a past client and see how what you built them is performing.
You are maintaining relationships with good clients, right? A phone call or email every once in a while is a good way to make sure they remember you and impress them with how thoughtful you are about their business. (I'm not going to go into much detail on this, just go search for blog posts about farming clients vs hunting clients and see what turns up! There is a lot of good information out there!)
The only marketing I spent money on was an easy to remember domain name and officially branded stationary.
I don't think I even had analytics on my website.
I was in a unique situation, starting off with 60+ clients, but I did find that the clients that came my way via word of mouth were often better clients than the ones that cold-called me.
Think about it. Word of mouth means:
- An existing client liked your work enough to recommend you
- The new client already thinks favourably about your work
- You and your new client have someone in your network in common
- The new client may already be familiar with your rates and how you work and is okay with both
Word-of-mouth marketing means you're getting pre-warmed clients who already know a bit about you and your work and are keen to work with you! I'll take one of these sorts of clients over five clients who picked me out of a search engine results page any time.
Running my own business was a rewarding opportunity to learn about client relations and accounts receivable and many other aspects of agency life that, as a developer, I hadn't really had to consider before. It was a valuable experience and I hope these tips help you with your own business endeavours!