Making sure the clients you are working with are the right clients for your business is crucial to the profitability of your business. Working on unprofitable jobs costs you all the money you are making on the profitable ones.
I did this in one of my businesses 17 years ago and I went from chasing money to pay my bills to having the money sitting there at the beginning of the month for bills I hadn’t even received. I have since coached numerous business owners to do the same and have gotten the same results.
So the simple solution is that you need to stop doing work that doesn’t make you the amount of money you need to make. Grade your clients and job types A B C or D. Create the guideline for what makes up each category. Be a strong enough leader to say NO to D grade clients and a few of the C’s. The A’s and B’s will always play by your rules, be happy to do it, and not ask for favours. The D’s will want to set their rules, still be unhappy and ask for favours all the time.
Some criteria for grading: the dollar value of each job, the spend of that client per year, how long they take to pay, the margin in each job, how easy they are to deal with.
Get rid of your D Grade customers now. You will make far more money, have cash in the bank, reduce your stress and get home to enjoy the rest of your life.
