Beware Bad Clients

As a new entrepreneur, how do you learn to distinguish good prospective clients from the bad ones? In the beginning it's easy to fall into the mentality that any prospect that comes knocking is worth pursuing, and I have a theory that no matter how much advice we read to the contrary, we have to experience firsthand the reality of bad apples before the message sinks in. While this is written from the perspective of a freelance writer, the advice is applicable to most fields.

Let's take a look at three of my own experiences over the past two years. I've changed their identity for the sake of anonymity.

The first example we'll call Mimi. Mimi and I knew each other from a local community group. She learned I did freelance writing on the side and approached me a few years ago about doing some marketing work for her. Being the rookie that I was, the idea of snagging my first client was empowering. I did not think much of her caution that she could not pay me much. I was after all just getting started, but after several e-mails and phone calls Mimi faded into the woodwork. Either her product ideas were not coming together, or I turned out not to be the kind of writer she'd been hoping.

Recently Mimi found me again on LinkedIn. These days I have enough work to keep my schedule satisfied, so when she asked to speak to me about working together, I responded with my hourly rate and said I'd be glad to chat with her if the fee was agreeable. Her reply sounded positive, said the work involved eBook proofreading, and could I please send some writing samples? I responded with relevant pieces from my portfolio but knew better than to waste my time closing the deal.

Sure enough, Mimi got back to me with the news that while my samples were great, my services did not meet her needs at this time. Maybe my sample work really is not up to par. Maybe my current menu of services really falls short of what she had in mind, or maybe Mimi is scared away by my fees and refuses to admit as much. Either way, I know Mimi well enough to know that wasting energy on gaining her business would not be a productive use of time. I don't think I've heard the last of Mimi.

Now Tim was a guy who wanted a grant writer to help raise funds for his animal rescue. Tim wanted to pay the grant writer on commission, and while I knew better than to take the bait, I believed in his cause enough to draft an agreement for a year of service at 10% of each award. I figured I could use the experience of writing for animal welfare, earn a little extra cash and do something close to philanthropy since I knew most reputable grant writers would never agree to such an arrangement.

Well, at the end of the year the only thing I walked away with was "a little" extra cash. A grant writer, especially one working completely on commission, should be able to count on the client to provide him the basic information of the organization to build a proposal. The information came slow or not at all. The organization was nothing more than a one-man show with a couple friends who made up the board of directors, and so it often fell to me to create standard resources required of a standard nonprofit, never mind a grant applicant.

Tim had his own ideas of how a nonprofit should be run. Since I had put together a budget for him, I was familiar with several expenses that could be dramatically reduced or outright eliminated. When our year was over and he did not take me up on my offer to continue our arrangement with a nominal retainer, I knew it was time to walk away. He did not value my extra work enough to make my service a line item, even a small one. I love the population he serves, but the cost of doing extra work just to keep his organization afloat did not meet the benefits of elusive compensation. At the end of it all, however, it was his overall lack of appreciation for my work that made the experience a negative one.

The last example we'll call Jerome. He ran a community youth organization, and having heard of my performance from a mutual contact, Jerome hired me to prepare a government proposal to establish a summer youth employment co-op.

Government proposals at any level are never overnight projects. This particular assignment was no exception, and because of the tight deadline I felt compelled to charge according to market standards.
Jerome said that would be totally fine, even going as far as transferring a small deposit as a show of good faith, but the morning the proposal was due Jerome decided he could not gather the documents I'd been requesting and decided not to apply. Well to no one's surprise, I lost several days of productivity. Jerome's promises to pay me the balance of my fees went unfulfilled.

Putting aside my increasing skepticism with the nonprofit sector, these and other interactions taught me hard lessons about human relationships. Just because a person says they want to save the world does not mean they won't try to take advantage of you to achieve salvation, and if money is ever involved, friendship needs to be shown the door. No one cares more about your success than you, and while it is entirely possible to build a rapport with a customer to make the occasional exception, these exceptions should occur in a professional context to prevent either party from becoming bitter.

Before you learn how to ward off the enticement of bad prospects, you need to feel confident about your own professional worth. Your worth usually boils down to your hourly rate, and your hourly rate is a figure derived from financial goals, taxes, benefits, years of experience, etc. If you are not convinced that your rates comfortably match your value, it will be much easier for bargain hunters and swindlers to lead you by the nose.

I would never discourage entrepreneurs from providing community service. It's socially responsible to occasionally lend your skills to help people, animals, the environment or any other aspect of the world you are passionate about. In fact, if I could rewrite the first couple years of my own business experience, I would go out and volunteer my talents to nonprofits and companies of interest. Providing free service is a good way of learning a craft in a new field. Community service provides mutual benefits for you and the recipient; however, when you make the conscious decision to switch to business mode, it's time to get serious.

As a freelance writer, you represent a business. Your writing is your product, and most of us would never walk out of a grocery store without paying for the groceries. There are tons of grocery stores. If a customer does not agree with your worth, the customer can go find herself another vendor with more favorable prices. If they see your prices and still decide to buy, the customer is responsible for paying.

As freelance writers, we need to assume responsibility when the occasion calls for it. A person's writing quality is rarely objective.
You should count on a client being dissatisfied with something you produce at some point in your career, and these dissatisfactions should be addressed in advanced in a written contract. Entrepreneurs who hate confrontation can later point to the contract as a neutral arbiter of the rules of the interaction.

The degree to which you follow my advice depends on how much you expect of your business. Learn as early as possible about separating good customers from flaky ones. Part-time business owners try to separate good clients from bad ones, because they have only so much time to devote to running the business, but this is the mindset we should adopt no matter how many hours you devote to the venture. We should strive to be in the position where we can pick the type of clients we want.

What do you think? Have you ever been stiffed by a client you thought would be a solid lead? What else would you add to my list of things to avoid?

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Well written post, and one that got me thinking, one of the hardest things for me to do is separate friends from business partners, or for that matter, friends from clients. I always want to do my best work for someone, but when does it become to much and the line gets crossed when they start expecting things for free that you are doing as a business and trying to better your situation. I think that there is a very fine line and it is very hard to judge when you have crossed until its to late.

I hate cliche answers like communication makes the world go round, but it's true. There is little room for disgruntled feelings when both parties are on the same page. Occasionally the business person may want to help because you're a friend. I certainly do that on occasion because writing is something I'm passionate about. If it can help a friend, all the better. Still, you're right that it's a fine line.


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