now, how about a “rescue plan” for clients?
how many of your clients are about to crash and burn? don’t get caught flat-footed. do what you can today to protect yourself and maybe save a client. the causes are not always about bad business decisions alone, or the kind of things that you find in the books.
from a british practitioner, comes this list:
1. an inability to admit they have made a mistake – i’m not sure if it’s pride or stubbornness, but refusing to accept that a business decision was manifestly a complete aberration and then moving on is one sure sign of weakness. as they say, if you’re in a hole, stop digging!
2. asking for help, but avoiding the real issues. these clients may not be the most reclusive and you may well see them regularly over the course of the year – but in fact they don’t seek your advice on some of the key financial issues, until it’s too late.
3. deceptively ‘good’ accounting systems. i have seen any number of businesses come unstuck on this count. they may have expensive accounting software and an in-house accountant, but watch out for the excuses. the accounts are usually behind because the bookkeeper is over-worked, or the proprietor won’t hand over all the paperwork on a timely basis. despite the appearances the company accounts are often filed late or right at the last minute. management accounts? the bookkeeper probably knocks something together on excel, but there’s no way you can reconcile his figures or the tax returns with the annual accounts!
4. too many business interests. it’s good to diversify, but beware the client who gets bored too quickly with a new business idea and moves on to the next one before getting the first one on a firm footing. these clients look like go-ahead entrepreneurs, but likely as not they end up as serial failures. you may turn up for a tax planning meeting only to discover that they have just opened a new branch or started some totally inappropriate new venture without seeking any advice!
5. spouses not working together – or even speaking to each other. one may well be concealing the true state of the business from the other and putting on a brave act of business as normal. this simply puts off taking meaningful remedial action and it’s often too late to do so once the spouse or partner finds out just how bad things are. ok, let’s be honest, it’s usually the husband putting on a brave face and keeping his wife in the dark! divorce and liquidation/bankruptcy then go hand in hand and everyone loses. knowing this, try to see the spouses separately, and make sure you give the husband a real grilling on the true state of the business.
one response to “five early signs to spot clients in trouble”
earn, save, grow and protect your money using our tips - moola mania » how to spot problem clients early to save your money
[…] the clients get into the trouble and become a failure? rick telberg wrote a good article about this. it’s normally the pride that prevents the client accepting the failure before it’s […]