Starting a business is going to be one of the most rewarding and stressful feelings at the same time. Many people who embark on starting their first business go through quite a bit as some things simply need to be learned in the business world. After processes are set at a company and they begin selling at a higher rate, issues can start arising with clients. For a small business, this can be a terrible situation as a larger company could be taking advantage, knowing the smaller company needs their business to stay afloat. The following are issues that can start with clients and how to manage them sensitively as a new business.
Habitually Late Payment
Late payments put a small business in an uncomfortable situation as they only have so much capital. The proper credit application with certain companies can make sure your receivables are turned into cash immediately. Putting very specific payment terms or doing partial payments along the way can help alleviate any cash flow issues. Hold your client accountable in this respect as the business and its staff are not working for free. If your customer falls more than 90 days behind on an invoice, consider using a collection agency as the longer the bill remains unpaid, the less chance you have of ever collecting.
Poor communication is one of the most frustrating things to deal with in a client. For this reason, having weekly calls is necessary so nothing is lost in translation and they cannot come back complaining about a finished project as they were checked in with frequently. Sending an email that recapped the main points of the call is also important as both the business and client can refer to this. Having this documentation is important if the client starts to refuse to pay or throws some kind of tantrum. Unfortunately, not all clients understand what it takes to form a mutually beneficial relationship in business. Hedge your bets by being the ultimate communicator so they are forced to communicate clearly and effectively.
Changing Scope of Projects
Clients might have a specific project and sign a contract, then want to change the scope of the project. If work has not begun on the project yet then being flexible can help retain the client as they will feel valued. If work has begun on the project you need to listen to what they have in mind. Then, tell them how much this extra work is going to cost or what work originally specified can’t be done if they don’t want the total cost to change. If your customer keeps changing their mind and you don’t put limits on them, you’ll end up losing money on the job. And, worse, they may end up being unhappy because they’ll never get what they want because they don’t know what they want. It can be uncomfortable bringing up money, but if you don’t you are the one who will suffer the losses.
Clients can be tough to deal with at times but, with the right approach, nearly all can be managed. Put the customer first, communicate regularly, and document verbal conversations, and good things are sure to come as the consumer is becoming as savvy as ever. Opinions expressed here by Contributors are their own.