The Red Flag Client: November 4, 2022
Hello All,
Anyone who has been in business for some time likely has clients that fall into one of three categories:
Pleasurable
Neutral
Huge pain in the behind
When you are in the earlier stages of being in business, you tend to be significantly less discerning with who you take on as a client (you have a business to build and you need to pay bills). Also, as an optimistic newbie, you don’t necessarily have the experience to identify clients who are going to be problematic.
Once you have been in business for awhile, you start to develop an intuition about clients that might be problematic. It might be the tone of their email which demands that you get back to them asap or their insistence that their friend told them something that contradicts your advice or the many other Red Flags for Clients that might crop up.
When determining whether to take on a new client or deciding if you want to continue working with one, I tend to evaluate any physical signs of stress (which tends to be a feeling in the pit of my stomach) that might emerge. Of course, this feeling could simply be a reaction to the challenging nature of the work which requires a different course of action. If, however, you are able to identify that the stress response is to a person, it is worthwhile to carefully consider if any action should be taken to mitigate it. Your choice, then, can be to not take on (or fire) the client. Another option, with these types of clients, might be to raise your prices as there is fairly direct relationship between how much you charge someone and how much stress you are willing to endure.
Of course, most of us can’t simply reject a new client every time we feel a little uncertain. It can also be difficult to predict how the relationship will evolve - some people are naturally gruff or blunt in their manner but can actually be great clients. Conversely, you might have great initial chemistry with someone who then turns out to be a bit of a monster. Ultimately, you have to run a business which at its core requires that you bring in revenues. But you must also be alert to your mental wellbeing, which is certainly worth more than the benefits of a bad client.
Blog Post
Qualities to look for in a good client and a good way to determine if a current or potential client isn’t that great:
7 Qualities of Highly Desirable Clients
When you are a business owner/freelancer, there are few things that are better than landing a great client. Ones that ask great questions, respect our work and make us feel happy to have chosen the
Small Business Articles/Tips
Businesses Losing Confidence: According the Canadian Federation of Independent Businesses (CFIB), business owners confidence is starting to dampen in the wake of higher interest rates and inflation.
Should You Keep Your Money in Cash: This article from WealthSimple explores this and explains why it usually better to invest.
Tax Stuff:
Common Estate and Tax Planning Issues: A comprehensive article from the Blunt Bean Counter where he lists some of the more common issues and gaps in estate and tax planning
CRA Increasing Scrutiny for Truck Drivers: Further to increased scrutiny of PSBs in general, CRA is specifically focused on truck drivers who often meet the criteria for being employees yet are recruited as independent contractors.
QuickBooks Tip: Chart of Accounts Bulk Edit
If you want to rename and renumber your chart of accounts and you don’t feel like clicking on each one individually, there is a little pencil icon on the top right of the chart of accounts. Click on that and it allows you to bulk edit. See instructions here
Books and Resources
Small Business Tax Facts(Sole Proprietorships/Registered Businesses/Self Employed Workers)
This book helps you have a better understanding of tax (brackets, tax rates, deductions etc), how it applies to your unincorporated small businesses and how to do your own tax return (or at least understand what your accountant does). It also includes a comprehensive breakdown of deductible expenses, by category with special sections on more complex deductions such as home office, vehicle and capital cost allowance.
FastStart Your Corporation(Corporations)
A step by step guide to starting your small business corporation, including what you need to know about incorporation, setting up your accounting and tax considerations.
QuickStart your QuickBooks(Sole Proprietorships and Corporations)
A comprehensive guide that takes you through the many features of QBO and gives you step by step instructions on how to setup and work with QBO day to day. It is ideal for beginners who have never used QBO before and also for those who are currently using it, but have questions or need guidance.
FastStart Your Business (Sole Proprietorships)
A step by step guide for anyone who is planning to start a Canadian business or become self employed (and does not want to incorporate) and wants to know what they need to do or simply has questions.
Small Business and Your Dividends (Corporations)
For incorporated small business owners who want to know more about small business dividends, the differences between salary vs dividends and which is better and step by step instructions on how to file your own dividend declarations (T5s).
Use discount code “special” to save 20% on any (or all) book(s) when you purchase from the website.
Please note that all books on my website are in PDF format.
If you prefer a print version, all books are also available at Amazon . Note that print versions purchased on Amazon include a complimentary PDF - you just need to email me and include proof of purchase.
Free Resources
Business 2022 Tax Deadline Calendar
Starting A Corporation Checklist
Start Your Business Checklist
Dividend Declarations Checklist
Small Business Tax Return Checklist
QBO Set Up Checklist.
Small Business Calculators
Previous newsletters.
Consultations
I also provide consultation services where I can answer your specific questions relating to your small business and/or finances, provide clarity and give you guidance. Additional details can be found here and here.
Note that I no longer provide ongoing accounting or tax preparation services.
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Hope everyone has a lovely November weekend (which at least in Montreal is unseasonably warm)
Ronika