You’ve done your market research, you’ve got a solid business plan, you’ve registered your company and pulled together funding, suppliers and everything else you need to start your new business. You’re ready to trade – you just need some customers.
However, not all customers are created equal; some are a delight to deal with, while others seem to have crept from the depths just to torment you.
When you’re building up your customer base, you obviously want more of the former and fewer of the latter, especially if you’re in a service-provision industry where customer relationships are key; but how can you achieve this?
Be prepared to say “No”
At the start of your business, you may feel like you should be saying yes to every potential customer who turns up on your doorstep. This can, however, be a very bad idea; there are plenty of ways in which a bad customer can cost you money.
Some will fail to pay on time, others will take up so much of your time or argue your costs down so low that they cease to be profitable. While others will simply not be the right fit for your company, leading you to struggle to deliver, and leaving them distinctly unimpressed and passing on criticism instead of referrals.
Take the time to consider whether the client’s right for you, and don’t be afraid to say no if you need to. Sometimes, saying no to a project because it’s not right for you will actually encourage the customer to come back to you in the future, because they appreciate your honest approach.
Know how to spot a great customer from a nightmare client
Of course, the difficult part is often working out how to tell a good client apart from a bad client. We might talk about the “client from hell”, but it’s not like they walk in with glowing red eyes, horns and a tail; they look just like everybody else.
However, if you know what you’re looking for, you will find the clues are often in their behaviour and their brief;
They don’t know what they want…
If your client doesn’t have clear expectations, how can you know when you’ve delivered something that they’ll be satisfied with?
…But they want it cheaper
A little negotiation on prices is often to be expected, but if a client simply doesn’t value your service you’re unlikely to enjoy a good relationship with them.
They’re overly demanding…
Clients who know what they want can be just as bad, especially if they’re issuing constant demands with no regard for your processes, policies and procedures.
… And unrealistic!
If they want you to deliver the impossible, whether that’s in terms of scale, time or cost, and won’t listen to your advice on a more realistic goal, alarm bells should be ringing.
These are, of course, just a few signs, but you will generally pick up warning signals from any kind of bad client. The important thing is to trust your instincts; if you have a bad feeling about somebody, you’ll more than likely be proven right.
How to attract good customers to your business
In order to attract good customers, you need to know who you’re looking for. Think about the kind of clients you want to attract; what makes them good to work for? If you’re keen to work with customers in a particular industry, how can you adjust your position to appeal to those clients in particular?
Creating a persona for your ideal client will help you to work out how best to target them. This is not just a matter of getting your adverts to pop up on the right websites, but also a case of adjusting your language to appeal particularly to this kind of person.
Remember too that a good client can act as a gatekeeper for other good clients; if you impress, they are likely to recommend your products or services to others in their industry.
You may not always be able to identify bad clients before you get into a working relationship with them. There may also be occasions when a good client turns into a bad one; for example, when a client you’ve worked with successfully before has a project that’s not as well suited to your skills as previous ones.
However, in some circumstances a bad client can become a good one, if you put some work into the relationship.
Communication and understanding are often key issues. Your client may not know what they want because they don’t understand the options available; their feedback may be vague because they don’t have the technical grounding to explain things in a clearer way.
If you take the time to explain things to them, and they’re willing to take the time to learn, you may find the relationship suddenly becomes much more pleasant.
Similarly, if your client is constantly trying to bring your prices down, it’s often because they simply don’t know what’s involved in the work you do. Transparent processes and thorough reporting can help you to demonstrate the value of your work.
Remember, too, that this kind of devaluing approach from a customer can be an issue of your own causing; if you offer a discount to a customer early in your relationship, they may expect you to always meet those prices.
Know how to get out
Having an established procedure that will allow you to extricate yourself from a poor working relationship with a customer can save a lot of heartache.
Make sure the terms & conditions under which you take on clients and customers include a suitable cancellation clause which sets out parameters for cancellation by either party.
If your working relationship with a client is deteriorating to the point that cancellation is on the cards, it’s important to be proactive. If you let it deteriorate too far, the client will walk away with a very bad taste in their mouth; whereas if you approach them openly and honestly before you’ve completely fallen out with each other they may leave on good terms with you.
How you deal with your first customers can make or break your business, so it’s important to be prepared for anything, and anyone, who might appear on your doorstep!
About the author
This guide has been written exclusively for ByteStart by Quality Formations, a professional formations agent assisting start-up businesses with a plethora of bespoke company structures.
More help on winning customers
For more tips and ideas on how to get new customers banging down your door, try these other ByteStart guides;
- The 4 Rs of getting more business from your existing customer base
- How to turn your customers into your best sales force
- How to get your customers talking online
- Wisdom of Crowds: 4 ways customers can improve your company
- The power of referrals – How tradesmen can win new customers online
More on starting and running your own business
ByteStart is packed with help and tips on all aspects of starting and running a small business. Check out some of our most popular guides;
- 5 things you must do when you go self employed
- 10 advantages running your business as a limited company has over being a sole trader
- How to set up a limited company
- How to choose the best online accounting software for your business
- 15 Questions to ask when hiring an accountant for your new business
Funding your business
- How to maximise your chances of securing a small business loan
- A Guide to ‘Alternative Finance’ – the new funding options for startups and small businesses
- Finding finance for your new business – funding advice for start-ups
- How peer-to-peer lending offers businesses a new funding option
- What to do when the bank says “NO”!
Money & Tax matters
- 10 ways small business owners can pay less tax
- Sole trader tax – a guide for start-ups and the newly self employed
- Dividend tax changes from April 2016 – A summary of the financial effects for small business owners
- ByteStart’s Guide to the main business taxes
- Corporation Tax – How to reduce your bill
Promoting your business
- Making your small business a BIG hit online – A Digital marketing guide for small business owners
- How to create business cards that make a big impression
- The “Magic 10” Tips on networking – how the experts build great networks
- A Practical guide to Content Marketing for small business owners and start-ups
- 10 Top tips for small businesses starting out with social media
- Which types of insurance must your business have?
- Becoming an employer – Your responsibilities when you hire staff
- Health & Safety compliance for small businesses – where do you start?
- A Guide to the National Living Wage for small business owners
- Why it’s vital you have clear ‘Terms & Conditions’ for your business