I can’t have the business I want…….because of the business I’ve got!
This was the odd but striking conclusion of a meeting with the MD of a ten year old business who was looking for help with the financial management of his company.
We were looking at an analysis of revenue by client and he was describing the work done for the larger clients, the time taken to do it and the level of fees charged.
Then we compared these clients against the characteristics of the “ideal” clients he was looking for.
The characteristics of the larger, existing clients included:
- over-servicing
- highly demanding
- too far away from the office
- level of fees is too low
- slow payers
Clients like these! Familiar to so many companies. You can’t live with them but you can’t live without them, either!
But you can change things.
Run the business you want to run
Go after the clients that you want. The interesting work, the good people to work with, the ones your business can make a real difference to. The ones who will appreciate – and pay for – your services. They are out there. Go get them!
Change the terms of the engagement with your existing clients. Review the fees, the payment cycle, the level of work done and who should be doing that work. And if you can’t change the engagement so that it works for you then ditch the client!
Nowhere is it written that you have to keep working on business that is bad for your business.
You can’t change everything overnight and if the current clients are contributing to the bottom line and cashflow then you might have to live with them in their current form a little longer.
But why not give yourself this challenge: Bring in enough of the good clients so that you can afford to ditch the bad ones.
Part-time Finance Director service
This blog is based on a meeting I had with an MD who was interested in our part-time FD service. If you are looking for some experienced financial input into your company then this service, which strengthens financial management, reduces risk and supports growth, might be just what you need.
And I bet you’d be a good client!!
Michael
Related links:
Client profitability analysis – make more money from every sale you make
making your business profit more healthy, visit our dedicated Profitability services page.
