When being the boss is not being the boss
‘Being your own boss’ is a pretty naive goal in my world.
For generations, the dream has been to quit working for the man so that you can run your own life and be the boss.
BUT there are numerous pitfalls to this logic, as appealing as being your own boss can be, particularly to those people who don’t like their boss.
If that’s you, then raise your hand. Now comment below if you’re raising your hand!! (Lol).
Ok time to stop being funny because really, this reality is not funny at all. Not for people who work and save hard to realise their dream of being the boss.
It’s true that when you’re the head honcho, no one else in your organisation is calling your shots and telling you when you can shit and when you can eat. But in many occasions, you have something way worse living outside of your organisation.
They’re called clients.
Clients: The Boss for the people who don’t have Bosses?
A bad client can be just as bad if not worse than a bad boss if you’re an employee!
Think about it. Bad clients make unrealistic demands on you, often stretch you for more work and force you to run around like a headless chicken around the clock. They schedule meetings at inconvenient times, soak up all your attention, frequently change their mind, and their ultimate reward for all this is slow pay.
From my time running a services business in real estate, I’ve learned that not all clients are created equal.
Ironically the sort of clients who are easy-to-please, down-to-earth and low maintenance people are normally happy to pay the right fee for service. Bad clients typically haggle you on price — likely because they have limiting attitude where they are only focused on their outcomes.
They demand more of you and are loyal to only one thing — the cheapest. They have a very short-term attitude and churn and burn relationships.
This irony is no accident. It really is a function of an individual’s attitude toward the world. People who recognise value and are happy to compensate others for their value are not surprisingly more appreciative and loyal — they simply have more perspective.
From my experience in real estate, the good clients are also funnily enough the ones who get better results out of their agents. Because they don’t try to squeeze the blood out of every deal and transaction, they are less selfish, enabling us to price properties more accurately and then achieve market or above market results.
On the other hand, the bad clients are normally too short-sighted on price — the same part of their DNA that squeezes the lowest price out of you for service, tries to squeeze the highest possible sales or rental price out of the market. There is no concept of fairness, only ‘me-ness’ for the bad client. It tends to work to their detriment though, with results being poorer.
This is why cheapness in service-based industries is often a lose-lose.
Easier Said Than Done: The Struggle to Ditch Bad Clients
But every bad client is revenue. That is materially true.
You probably know that ditching a bad client is a revenue hit now that will probably be worthwhile later down the track… as the adage goes, time is money!
But that’s a tough band-aid to rip off, especially if revenue is low, or there is a casual COVID-19 breakout happening at stores near you…
For most people it is too difficult to do, which is why you normally require pain to learn this lesson in business. By cutting bad clients, you have time to service the good ones, create more raving fans, and at the end of the day these are the biggest asset for a business!
So how can we make it easier to do this?
Instead of cutting them — don’t take them on
What my Lawyer does: My lawyer has a rule — “if the first question a potential new client asks is how much I charge, I say, don’t worry, you can’t afford me!”. Yes, he’s a bit of a character ;) and he has a good point, fitting perfectly with what I outlined above in that this approach is clearly modelled on experiences in the past, and an understanding of where these clients eventually end up.
One of my old real estate colleagues used to say — the only people I won’t sell for are “d***heads”. Commission is not enough to make this worthwhile, and life is too short.
It is hard once you have revenue from a bad client, especially an ongoing one, to ditch them, because you’ve become accustomed to their cash! Rather, it can be easier to filter them out at the start, but of course, you must be in a position to do so.
Cut the worst 10%
Unfortunately, we’re not always in a position to get rid of any bad clients, but if you could cut the worst 5 or 10%, would that leave you better off?
Pareto’s Law, also known as the 80/20 Principle, applied to a client base, suggests that the top 20% of clients will create 80% of the revenue, and that the bottom 20% of clients will take 80% of your time. In the services industries, your time needs to become as valuable as possible!
Don’t take my word for it — ask your friends and family if Pareto’s Law applies to their client or customer base! Sometimes making a small cut to those particularly rotten people is all that it takes.
Don’t Be Afraid to Say NO!
To date, my most popular article/post was “25 things I learned about business before the age of 25.” Lesson Number 11 was ‘Don’t Be Afraid To Say No’ in business (and in life I guess), which my father instilled in me from a young age.
I think as people we too often panic and fuss about pleasing everyone, and try to be ‘YES MEN’ like Jim Carrey in that movie… but every yes is a no to something else (not my wisdom that line).
For example, the yes to becoming your own boss is a no to a lot of things. One of those can be control of your life.
Being the Boss does not equate to freedom
In my upcoming book Don’t Build Schools for Poor Children I make the argument that wealth is expected to simply give freedom, but the two don’t necessarily go hand-in-hand.
You can’t be materially poor, and still have more freedom than many of the rich and famous whose time, attention and energy is really owned by others. Shopify founder Tobias Lutke once said on a podcast something along the lines of, what is this thing we do being entrepreneurs, working 100 hours a week for ourselves so that we don’t have to work 40 hours a week for someone else?
For all of you out there who have run a business I’m sure this will strike a deep chord with you as it does with me. Just because you own a business, does not mean you own your time if you are beholden to others, whether they be employees, clients, or anyone else.
Really you need to be very proactive to create this freedom — it requires very deliberate navigation and negotiation and does not just happen because you set up an entity.
Remember, the grass isn’t always greener on the other side — it’s greener where you water it. So if you’re going to go to business-land, you better get that watering can ready.
By Joe Wehbe
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