Every business, whether big or small has come across low value clients, i.e. those clients who don’t pay you much money.
Business owners start with good intentions – they need business and they want to help their clients (especially if they have just started out themselves) so they start with quoting a relatively low fee for providing a service. They then find that when it comes to renewing the service the following year, their client doesn’t want to pay the increased fee, or should I say the correct fee.
Another drawback this can lead to, is if your low value clients introduces you to a potential client – they would also expect to be charged the same low fee, and so it continues.
The best way to deal with this is not to set the fee too low in the first place – it is best to bill what the job is worth, or close to that. This itself would phase out those who are not willing to pay and so you can therefore provide a better service to your existing good paying clients as you would not be spreading yourself too thin with your large volume of low value clients.
Sonal Thakkar – Audit Team
Westbury Accountants and Business Advisors is an accountancy practice based in London. Westbury have been providing Accounting and Tax solutions to small and medium sized businesses since 1936. Talk to the team at Westbury on 0207 253 7272 or visit http://www.westbury.co.uk.