Bottom Feeders – What are you willing to put up with?

As soon as someone starts to negotiate on rates with me I see it as a warning sign of what is yet to come. I’m not talking about the client who has been working with me and paying me consistently for a while or more and need a little help because I am billing them a lot on a consistent basis. My own larger clients can attest to the fact that I lower my rates for them especially when they are giving me a lot of hours and even more especially when they consistently pay me right on time. It’s my way of saying,

Hey I really enjoy working with you and really appreciate your business

Because paying me on time all the time tells me that they really appreciate what I am doing for them. These are the clients who really move and motivate me.

I am referring to the brand new client, who walking in the door and asking for my help cocks his head to one side and asks me what I am going to do for him. Based on my experience, at that point the answer should be something like,

I’m going to run away. Very far away and very fast.

Based on just one more recent experience, I can honestly say that there are certain clients it is just not worthwhile working with. When I have to spend more time talking than doing the work it isn’t worth it, especially since I am not about to start getting into the practice of billing for phone calls. Maybe I should. That’ll scare ‘em away, but to be honest I would really rather just spend my time on more interesting things like solving problems that actually help my clients grow as a company.

When I started out I was charging a very low rate for my time. It was just me, and I was still employed full time at a CPA firm, so all the income was supplemental. The time came when I was completely out on my own and my rate had gone up to reflect the fact that my full time income was now based on my consulting work. I have continually increased my rates over the years to a substantial multiple of what it was then. Along the way I noticed something. At a certain point when I increased my rates to over $50/hour I began to attract a different caliber of client. Larger companies who frankly seemed to have more respect for my time and a much better appreciation for what I did for them. I think this is because at that higher level and larger size there is a greater emphasis on the accounting. At this level the clients are not just having their bookkeeping done so they can file their taxes. They are actually interested in what the bookkeeping says about how their business is doing. They want to know what their P&L and balance sheet look like so that they can make informed decisions about their business. These are the clients I enjoy working with. They are sophisticated and they really appreciate and enjoy what I can do for them.

On the other end of the spectrum is the “bottom feeder”. These are the clients that try and negotiate a credit on every single bill. Somehow they think that the hours they spend negotiating discounts on the bills is worthwhile. If they only actually knew the value of their own time compared with the dollars they are saving in the form of little credits here and there. If I am charging $150/hour for my time then in order for me to spend an hour trying to get a credit from someone it has to be at least $150/hour to be worthwhile. Add to that the fact that I would much rather earn that $150 doing something much more interesting than arguing with someone over their bill and it really needs to be more than $250 that I am going for in order to justify my time. What is your time worth in the form of billing credits negotiated?

So the bottom feeder wastes countless hours of their own time arguing for little credits just to get the satisfaction of feeling like they’ve WON something. I swear these are the kinds of people that ran for office in school elections and lost every time and now they are spending their entire adult lives trying to make up for it! Either that or they are experiencing deep feelings of inadequacy because they look at their own lives and recognize that they haven’t made much of themselves.

There are a certain type of business people that seem to believe that haggling is good business. I do not hold with these people. To me good business is shopping around based on what you can afford, making an agreement and sticking to it. What these people count on is that after taking up a bunch of your time you are now invested and you don’t want that time to go to waste so you will ‘work” with them. The only thing you are accomplishing when you do this is to ensure you waste even more of your time. So do yourself a favor and run away from these clients. Run far and run fast. Run right into the next GREAT client who will be only too pleased to pay your full rate because they can really appreciate what you can do for them. I PROMISE you your sum total experience will be worth SO much more.

I don’t know about you but I do NOT want these clients. They waste my time, cause me to lose sleep and generally aggravate me and I did not go into business for myself to be surrounded by people like this. I went into business for myself so that I could enjoy the freedom of choosing exactly the people I wanted to work with and specifically excluding the sort of people I do not enjoy. When I was employed I was at the mercy of my employers working with the people they chose. I had to report to a couple of real morons in my experience, but today I am thankful for them because they motivated me to start my own business. So I have a few rules I’ve established for taking on new clients. I put them here so you can revise and use them based on what fits your situation best:

No haggling with rates – if a prospect starts to haggle with rates I politely excuse myself from the conversation and don’t call back. If/when they call again I ask them if they are serious this time about paying me what I am worth.
Estimates – clients will provide me with all of the materials I need to complete the job for them first. Once we are agreed that I have this, they will pay me for one hour of my time to review the materials and come up with an estimate. Once I have what I think it will take, I double it. If someone is going to hold me to my estimate (and most do) as gospel (even though it is called an “estimate”) I am going to cover myself by aiming real high. Let them walk away – the ones who stay have just shown me they are serious about paying me for the work and they are going to be really happy when the final bill comes. I would rather have fewer clients like this, than a ton of clients who complain.
No Rush Jobs – this is one of my older rules and the experience I had that inspired this very blog post was one where I broke this very rule. When someone is coming to me with a rush job I have to look beyond the surface. Why is the prospect in this situation? Maybe no one else wants to work with them? Maybe there is a reason? Maybe they are putting pressure on me to make a fast decision so that I commit to them before I really understand what I am getting into? It is only from existing clients where I know them well and I really know where they are coming from that I will take a rush job. When someone I have never done business with before comes to me with a rush job it is a red flag. A big one. Delay as much as you can and learn all you can before taking it on.
Thresholds – My wife thinks this is snobby of me, but based on my experience I am inclined to start requiring that new clients are doing a minimum of $1,000,000 in gross annual sales. I think it speaks to what I was saying earlier about the motives behind why I am being hired. At this level, in my opinion clients have a very different perspective and I don’t want the clients who “just need a tax return”. They will not like my rates and they will not be able to appreciate what I am doing. I didn’t get into this for the money, I got into this because I had a set of skills that I felt empowered me to really help people, but it doesn’t work if they don’t understand the value in what I am doing for them, and what I do goes way beyond just handing a set of books over to a CPA.
Abusive Clients – I was thinking the other day about one of my first clients. I wish I had followed my instincts with this one instead of my heart. My heart always tells me to work with people and help them regardless of who they are and how they treat others and least of all me. I don’t think I had met with him quite 5 times when we were going over one of his scams and how to do the bookkeeping for it. I am using that term loosely – this guy was always involved in little side deals that I used to call scams, whether it was charging people to let them charge things on his credit card so he could accumulate points to scalping tickets while doing the above at the same time. Turns out there were two guys with the same first name, “Tim” who he was running one of these scams with. Never again will I get involved with stuff like this. In any case I was reviewing the transactions with him still unaware there were 2 Tim’s. This lead tom some confusion on my part and in a few seconds when this became apparent his entire head and face turned red and he screamed at me, IF I HAVE TO EXPLAIN THIS TO YOU ONE MORE TIME I WILL GET SOMEONE ELSE. I should have let him. Actually let me back peddle here for a minute. Even before I started with him, I was sitting in my car about to speak for the very first time at a 12 step meeting. I had about 2 years clean/sober at this point. I bring that up only to illustrate that this was a very significant moment in my life which goes to why my memory of it is so clear. We were talking about the work I was going to be doing for him and I was asking questions. He raised his voice on the phone with me and said, MY TIME IS EXTREMELY VALUABLE.. and he went on from there. I should have taken that opportunity to hang up and never deal with him again. Now let’s go back to the next situation. I was in shock! I could not believe that I was sitting in that moment and experiencing what I was. I was in fact SO shocked that I couldn’t even begin to react. I went numb. I think I actually wanted to cry – I couldn’t believe anyone would ever speak to me in that manner. I was doing my best to understand the transactions so that I could do the best possible job. Why was he treating me like this? What an awful, awful human being! I have often thought about that moment over the years and visualized what I really should have done right then and there. I should have stayed quiet (as I had), calmly gotten up, gone to my laptop, packed my things and walked out never to speak to him ever again. I cannot even count the number of times over the years that I have regretted not doing that. That was in about 2002 / 2003. Just this year it came to the point where I had to ask my attorney to write him a letter explaining that he is not to contact me by any means and under any circumstances. If he wants to contact me in any way shape or form it has to go through my attorney. To be honest I am not 100% sure if my attorney ever sent him the letter but this is what I asked him to do and I haven’t heard from the x-client since.

Let me bottom line this for everyone in case you’ve managed to get this far reading. I don’t care who you are, what you’ve done or haven’t done, NOBODY under any circumstances no matter how badly you may have screwed up and no matter how many times.. NOBODY deserves to be treated in an abusive manner. The people who treat you like this don’t deserve what they have. They most definitely don’t deserve you. Do you think it’s any coincidence that it is usually the “nice” people who get treated this way? It’s not. It’s because the cowards recognize this in you and so they recognize that they can get away with it. Stop letting them. Watch how fast they cower when you stand up to them. I have experienced this enough and I know that I treat people with enough respect to know that I can only afford to have a ZERO TOLERANCE policy when it comes to abusive people. So now you get to do that to me ONCE and then I am out the door for good. No negotiations because if you can do it to me once there is no question you will do it again – especially since we are not kids developing our temperament. We are adults who’s temperaments are very well established and will NOT change without some serious therapy at this point.

Well I think that’s enough ranting for a day. Time to get to work. I have clients who are counting on me and I am counting on them too