Choosing your clients

stevo5678
stevo5678 Well-KnownCheltenham Registered Posts: 325
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...

Comments

  • Newbie
    Newbie Well-Known Registered Posts: 229
    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.
    T.C. Experienced Mentor Registered, Tutor Posts: 1,448
    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
    jamesm96 Experienced Mentor Registered Posts: 523
    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 Experienced Mentor Registered Posts: 523
    jamesm96 wrote: »
    you don't need to accept every Tom, **** and Harry.

    Hahahaha. Guess the missing word, folks! Lol.
  • stevo5678
    stevo5678 Well-Known Cheltenham Registered Posts: 325
    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
    Newbie Well-Known Registered Posts: 229
    well said James, Sevo5678 I take your point but profit is more relevant than turnover, they could be making a loss! lol
  • SashaDella
    SashaDella Trusted Regular Registered Posts: 362
    Newbie... thats why so many businesses fail! Growth is based on profit not the amount of clients!
  • stevo5678
    stevo5678 Well-Known Cheltenham Registered Posts: 325
    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
    stevo5678 Well-Known Cheltenham Registered Posts: 325
    jamesm96 wrote: »
    Hahahaha. Guess the missing word, folks! Lol.

    Does it begin with C?
  • JodieR
    JodieR Experienced Mentor Registered Posts: 1,002
    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
    stevo5678 Well-Known Cheltenham Registered Posts: 325
    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
    burg Experienced Mentor GloucesterModerator, FMAAT, AAT Licensed Accountant Posts: 1,441
    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.
    Regards,

    Burg
  • jamesm96
    jamesm96 Experienced Mentor Registered Posts: 523
    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
    deanshepherd Font Of All Knowledge Registered Posts: 1,809
    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
    Monsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    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
    JodieR Experienced Mentor Registered Posts: 1,002
    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!!)
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