Small-business clients: the good, the bad and the ugly

Sales and marketing

Small businesses collectively add up to big business, with about 2 million of us in Australia. Journalists and governments love talking up the importance of the sector, whilst corporates drool at the potential for so many clients. Whilst the marketers out there would love to categorise all small businesses neatly into the same box, the vast range of personalities, industries and issues make such a classification almost impossible. We are a slippery bunch to sell to and certainly have peculiarities as clients that are good, bad and ugly.

The good

One of the best parts of small-business clients is their love for their businesses, which is inspiring and infectious. Energy, drive and enthusiasm are all turned up high. Since you get to work so closely, you can know them inside-out, become a part of their families and their lives. Small things make a big difference in these working relationships and you can feel genuinely appreciated. You aren’t just a number, making a positive impact and helping their dreams their come true.

Without the constraints of corporate policies and procedures, small businesses can often be doing new and interesting things. With total autonomy and no managerial approvals to get, owners can make decisions quickly if they know what they want.

The bad

In small business there is never enough time or money, which has a big influence on their behaviour as clients.

With small (or no) budgets and cash flow usually stretched, purchases often come with a degree of angst. Expectations can be high, especially for professional services. If you are selling something that is not a necessity, it is more difficult to translate value and make a sale. Often you will also be asking a lower price. If you feel this from a new client, take the time to explain clearly, get the client to crunch their own numbers to see the benefit and take time to build a relationship.

Unfortunately, the autonomous decision-making also means you can be dumped much more quickly and suddenly. Numerous times I have had clients suspend services immediately. There’s not usually much in place for legal protections and formalised agreements either.

With many different business demands to manage, owners can easily feel out of their depth, which can create nervousness with new purchases and make for needy clients. Even when there is an identified need like improved marketing or a new website, you can find yourself spending a lot of time and effort.

Time shortages and a constant juggling of priorities mean that getting information or attention from your small-business clients may need some persistence. As soon as your client gets busy, you will slip to the bottom of the list.  

The bad side is such a mixed bag of challenges that identifying them early and managing the situation needs confidence in the way that you generate for your clients and for yourself. Some clients demand too much and others are too busy to communicate, so you need to watch for the signs and take action early: either set boundaries to slow it down or create a schedule to keep it alive. Know what works and make that happen. Early warning signs include unreturned communications, dissatisfaction or discussion about cash flow. Clear communication up front about how you work and how that benefits your client. Set up defined time frames and minimum terms/orders from the start and (if you can) set up automatic payments. The strength of your relationship will also help to endure sudden shocks.

The ugly

The ugly side of small-businesses clients is the difficulty in getting paid. Most providers have been burnt along their journey by not getting paid or being paid so slowly it’s like extracting teeth to get it (myself personally for thousands). Malintent is rarely at the heart of the cause, but low cash reserves that evaporate quickly when financial stress strikes. Particular types of businesses have a reputation for being late payers (like restaurants), but there are times of year to be wary where client cash is at their limit, like the weeks just after BAS payments.

The ugly side can be hard to see and you can find yourself in trouble quite easily; bad payers look the same as good payers. Keeping yourself safe is the best approach, so do some due diligence beforehand. Good T’s & C’s and credit reference are essential. Be firm with your payment terms, chase your payments before they get too old and (as hard as it can be) stop supply if you feel things are going sour. It doesn’t get any easier for them to pay you with more time or bigger outstanding amounts. 


Warren Harmer

Owner at The Business Plan Company

Small, fast growing and entrepreneurial businesses are my passion. I like to write business plans for them, grow them, advise them and write about them. My experience now spans over 17 years, including 3 businesses of my own. My objective is to offer instructive, hands-on, ‘how to’ information to make business ownership easier, less stressful, more successful and more enjoyable.

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Neil Steggall

Neil Steggall , Partner at Wardour Capital Partners

Warren, A really "feeling" article at the very core of small business and one in which I could feel your every word. My partners have suggested over the years that SME takes such a disproportionate amount of time for limited return and yet I remain passionate about making a difference in the area. Overseas governments are waking up to the speed at which SME's can change the economy once empowered by proper funding, education and support. Ireland, Spain, Greece, India and Nigeria have all implemented SME programmes and the UK is moving closer and closer. In Australia we need to develop a unified voice and lobby harder, SAVVYsme is a good step in the right direction.

Phil Khor

Phil Khor , Founder at SavvySME

Wow I think this article has to be one of the most heartfelt yet confronting truths of working with small businesses. Many of us, including yours truly, choose to work with small business because we believe that the entrepreneurial spirit can truly make a difference to our nation. The reality however is that many of the issues confronting small business are down right ugly. Many small business issues stems from the grassroots of how we run the business; the fundamentals, finance, processes and technology, but I believe it's almost always about the people and their motivation too. Neil's right; we need better government support, but who then is best equipped to inspire entrepreneurs whilst providing proven, practical advice in rich local context, other than those in small business themselves? Remember; "for things to change, first I must change." That's why we started SavvySME; to unite SMEs and be a trusted destination of unwavering support for business owners not only to weather the uncertainties but make the most of the ever changing, transient nature of technology and online trends. Thanks Warren, for sharing and for your ongoing tribute to serving small businesses.

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