Clients bring money. That’s why you should leave no corner untouched when it’s about delighting them. Whether it’s a one-time deal or a one-year agreement, you have to give it your all. But what about your finances? Do you think you spend too much to woo the client? Do you think you don’t budget enough before committing? Is your client bringing value to your business?
When you’re able to answer these questions, you’re heading in the right direction. Still, you should know where to draw the line. In pursuit of attracting a new prospect, you should not lose money. Many businesses commit such financial mistakes and realize it in hindsight. Also, you should review their commercial credit information report to get a better idea about their business.
In this blog, we’ll discuss financial mistakes to avoid while dealing with clients. Let’s begin.
Overspending
If you’re pitching a prospect, it’s evident you want to give the best you can. You want to make sure that the meeting converts into a deal. For that, you do different things, such as bringing a gift, taking the client to lunch, or trying to close the deal during drinks. All this is fine. However, you should assess the client’s worth. Know how much business can be expected from this client. Is it worth spending a fortune?
The idea is to make the right decision and spend wisely. Do not make the mistake of overspending on a client. Whether it’s a new client or an old one, you should analyze your budget and see if your pocket allows for an expensive business dinner. Make sure you’re not welcoming aboard future payment defaulter.
Not budgeting seriously
If you think you will start budgeting once the client comes on board, you need to think again. If you don’t budget on a particular account (client), your budget can go haywire. You may end up spending more than the allotted sum. Make sure you stick to the budget allotted for the quarter. Sometimes, you may have to stretch it a bit, and that’s okay. But if you do it with all other accounts, it’s not a profitable idea.
Giving more financial power to the client
While dealing with clients, you should remember that it’s your business that is providing services, and you should be in the position to demand and command things. It’s understood that the customer is the king; however, you should not give more financial authority to a client. If it’s a deep collaboration, you may end up taking the business relationship further and work like business associates. In that case, you should take care of your finances. Do not offer too much liberty to your client that he or she ends up misusing your business funds. They may end up being your business credit defaulters.
Not setting up an emergency fund
If you keep splurging on clients, you will not have enough funds for emergencies. You should develop a habit of analyzing the market and how it looks for the next year. A small shift in the business dynamics can change the game altogether. One day you may be enjoying good sales, but you never know what’s next. That’s why you should reserve cash for emergencies to make your business survive.
In another case, if your clients fail to pay back the amount lent, you can experience a cash crunch. It could be tricky to settle payment with business defaulters. You may have to take credit to keep your operations running. So, it’s crucial to look after your cash flow cycle. To settle your money, you can approach the CreditQ team to help you with the payment settlement process.
