Choosing your clients

stevo5678

I see alot of you saying things like 'I dont touch subbies with a barge pole' or I choose my clients carefully.

I am just wandering how you have such a selective process in practice, IE how you attract/don't attract certain clients etc and what criteria you use?

I'm surprised that many practitioners can afford to turn away the fees...

Newbie

its a sign of a sucessful practice, I think at the beginning its very tempting to take on any client 9within reason of course) however some are so much work that there is little or no profit, I also think its important to find a target market as its very difficult to compete when you are being all to everyone.

T.C.

Most of my clients are subbies...well at least half of them anyway. I never turn away a client unless there is a really good reason or he seems a bit 'dodgy'. I have only ever had one bad debt and have only ever turned away one client (he wanted two sets of accounts drawn up).

jamesm96

stevo5678 wrote: »

I'm surprised that many practitioners can afford to turn away the fees...

I'd say this is one of the biggest problems with small practices... they can't afford to (or sometimes they just think they can't).

The way that the successful practices that I've seen do it, is to have a profile of an ideal client, and you have different levels of that profile from Grade A down to Grade D (or maybe lower, lol!), and you base the grade on things like the quality of their records, how promptly they pay, whether they argue over fees, whether they offer you the type of work that you want to be doing... etc.

Some firms will then either review their clients annually and sell / sack the Grade Ds, whilst others will have such a stringent 'client acceptance' policy that they'll assess the client's grade before they engage, and they won't even take on a D in the first place.

Other firms have a minimum / default service level. So it might be that if you want to be a client of ABC llp, you'll have your annual accounts and tax returns, you'll also have a pre year-end meeting, a post year-end meeting and four other quarterly business monitoring and improvement meetings, a tax-planning review...etc. Obviously you price accordingly but, if the client doesn't want that service, you don't take them on. It's a way of differentiating your practice from all the others who'll happily do a basic compliance job for a £5k turnover subbie.

Newbie wrote:

its a sign of a sucessful practice

This is exactly the point. If you can't afford to turn away a client who wants services that are unprofitable or un-enjoyable, then your practice isn't earning enough. If you can afford to, it shows that you're already making enough money and that you don't need to accept every Tom, **** and Harry.

jamesm96

jamesm96 wrote: »

you don't need to accept every Tom, **** and Harry.

Hahahaha. Guess the missing word, folks! Lol.

stevo5678

I suppose it depends on the stage of your practice in it's growth. A new practice would struggle to turn away any fees.

My practice I work at has t/o c£750k and doesn't turn people away. However my brother's place does so by quoting too high. There's not a right or wrong but maybe an ideal depending on yuor own strategic and goals.

Newbie

well said James, Sevo5678 I take your point but profit is more relevant than turnover, they could be making a loss! lol

SashaDella

Newbie... thats why so many businesses fail! Growth is based on profit not the amount of clients!

stevo5678

Newbie wrote: »

well said James, Sevo5678 I take your point but profit is more relevant than turnover, they could be making a loss! lol

For the record guys, said business makes £200k and has been going 12 years. Partners are from a top 15 practice. I imagine they know what they are doing!

stevo5678

jamesm96 wrote: »

Hahahaha. Guess the missing word, folks! Lol.

Does it begin with C?

JodieR

I turn clients away for 2 reasons, firstly if I think that I don't have the skills and secondly if I don't have the time to do the work. If neither of these are an issue then I'll always provide a quote, but if it looks like they're going to be trouble then I bump the price up to put them off.

stevo5678

If a client is profitible then the firm is obviously undercharging. We would generally turn away clients for professional reasons but never on sector or client type (EG CIS). I imagine for some people this comes back to resources and time availablle where they ahev to be choosy (is that a word?).

burg

In the earlier days we took on most clients. Nowadays we don't necessarily turn many clients away but after working with clients for sometime if they are not what we want then we do ask them to leave.

We are at the level now though where the loss of a few clients can be healthy rather than a nightmare.

One type I do rarely take on though is anyone with more than 1 year of accounts outstanding. Chances are they will never catch up. You will get the first bit do 90% of the work but never hear from them again or missing info will never surface.

jamesm96

burg wrote: »

the loss of a few clients can be healthy rather than a nightmare.

I agree with this. I used to know a partner at an office of UHY in London and he said that, once a year, they'd grade their cleints and shed the worst 10% (the poor payers, constant moaners, overly demanding... etc). That way, although revenue growth was mitigated, their profitability (and job satisfaction!) was constantly improving.

deanshepherd

I turn away at least one client every week, if not more.

I have a strict criteria (they must only be in the specific sector I like, must pay in advance, must pay by direct debit..).

Saves a lot of hassle in the long run.

I used to be less strict when I first started my practice but I then sold off all the clients I didn't want to work with so I am left only with the ones I do.

It is so much easier to turn away the dross if you specialise and make it very clear on your website who you work with.

Monsoon

I seem to attract nice clients. It's very rare that I've thought "I don't want them" and gotten rid of them somehow.

I'm now at the point where I don't mind if I don't get someone (or indeed don't want them), but it's taken years to get out of the "don't want to lose a client" mentality. It's a much happier place here!

JodieR

One of my clients makes & installs kitchens & about 5 years ago upped a quote by about 20% as the woman in question was 'a piece of work'. They've now been dating for the past 5 years and she's the office manager (and a very good one too!!)