By Abhi Golhar, host of Real Estate Deal Talk.
As an entrepreneur currently building a real estate investment business, my team and I work with vendors, investors, contractors, homeowners, sellers and city planners daily. Similar to juggling meetings and vendor requests, taking on every client is a tempting approach to running a small business. However, we have limited for time, energy and finances, and we can only select clients who suit our needs. Here are five times when I think businesses should turn down a client:
When the Client Rushes You
Your manufacturing process came to be because it's the most efficient way you could think of during the development process. It's likely a great mix of cost, speed and quality. Problems arise when you mess with the formula, which will happen if you take clients who are in a rush. Avoid clients who want you to push too hard to suit their schedule. If you can't do it, you can't do it. Forcing the issue can result in poor output, which can damage your brand and affect future business.
When They're Not Paying What You Want
Setting your offering price is probably one of the most difficult tasks you have on your plate. You not only have to make a profit, but you have to place it at a price point that fits your target market. This will require a bit of juggling, but it's worth the effort. When a customer comes in and asks for a discount, you should consider turning them down. When they ask for something difficult and special that you don't normally offer without offering appropriate compensation, do the same.
You set your price for a reason, and it's because that's what your small business's effort is worth. While there are exceptions -- such as when it can serve as great publicity -- the general rule is to stick to your guns and insist on your posted price.
When You Don't Have the Time
Sometimes, the client's not in a rush but you just don't have the time. This is a good problem -- it means you've got plenty on your plate already. At a glance, the decision to ignore the new client is easy: That is, until you think about what you can do with the money. Resist the temptation to take on more than you can handle. Unless you're backed into a corner, it's often better to err on the side of caution.
When the Job Doesn't Fit Into Your Purview
One of the trickiest moments you'll face while running a small business will come when you're asked to do something outside your niche. On one hand, there's value in expanding what you're offering and learning new things. On the other hand, you may not do it well, which can affect future business. There's a time and place to expand, and it's when you decide to do so, not when a client asks. Focus on what you're good at and what you've designed the company to offer.
When It Feels Wrong
Most parts of your small business revolve around measurable metrics. Deciding on the final cost of your offering, for example, is a combination of several numbers, like your manufacturing expenses and the target audience's average income. However, there's something to be said for your gut feeling. If you don't like the client or what they're asking, don't hesitate to move on.
Better you lose a client than be forced into things you never wanted to do. While these moments often apply to small businesses that cater to a small number of clients, these can be applied to companies that sell products as well. What is important here is you value your time, your effort and your company. When a customer asks you to compromise one or more of these, it's time to move on.
Clients do represent revenue that your business needs to survive, so on paper it makes sense to accept everyone. Unfortunately, sometimes they're more trouble than they're worth. There are a few times when it's not a good fit and it's best for both parties to move on to greener pastures.
Abhi Golhar is the host of Real Estate Deal Talk and Managing Partner of Summit & Crowne, a real estate investment firm in Atlanta.