Do you experience the "Too Many Clients - Not Enough Money" syndrome? Most of us are familiar with the Pareto Principle or the (80/20 rule). This principle has wide application in many areas of life, especially business. Many business owners I know have validated this principle when it comes to their business - that typically 80% of their business comes from 20% their clients. In many cases, they are losing money on that 80% of their client base. I'm sure you can easily rattle off a list of client names that consistently complain about everything, eat up your time and take the longest to pay. Interestingly enough, that 80% of clients' likely accounts for 80% of your outstanding AR issues, general & administrative expenses, labor costs, etc.

I frequently hear "It's hard to get good clients." It's actually not hard. It's just that most business owners and managers haven't been taught how to attract the right clients. Having the wrong client can drain the life energy out of you, leaving you with little time to work ON your business (a topic I've hounded on before). After all, how many hours do you spend each year learning about new products or services that your business could offer? How many hours do you spend learning about better sales and marketing strategies? How many hours do you spend on strategic planning? You'll probably find your potential for success is limited by your 'personal exertion' on trying to satisfy the high demands of the 80%.

So, here's how you can start down the path to attracting better clients and get some of that valuable time and energy back.

First, define your ideal client. A great exercise for doing this is to picture, in your mind, your best client. What are their characteristics and values? What business are they in? What makes it such a pleasure to have them as your client? What's unique and special about them? What problems do they have that your product or service easily removes? Write down every descriptive word that comes to mind. The more precise you can be, the better you'll be able to define your ideal client. You must also be clear about your own mission & values. As an example, Nordstrom is synonymous in the industry for exceptional client service - and for good reason - they have a very precise mission - "Not service like it used to be, but service that never was. A place where service is an act of faith."

Second, determine what makes a client profitable and at what point they become a cost to your business. Your clients can be classed from A to D, with A's and B's being profitable and C's & D's being a cost. Your A & B clients are enjoyable to do business with, pay well, and really understand the value proposition your business offers. C & D clients are just about the opposite. They consistently pay late, change their minds or appointments, expect miracles in turnaround times, haggle for discounts and ultimately create far too much stress. As a rule of thumb, you should end up with about 20% of your client base being 'A' grade, about 30% being 'B' grade, 30% being 'C' grade and 20% being 'D' grade.

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