Clients that Can Kill Your Cashflow
Stay away from or at least be prepared for the clients who can be bad for your bank account!
A People Pleasing Reality Check…
In my earlier post about the causes of the “starving artist” mindset, I mentioned how codependency and people pleasing can be significant factors as to why so many artists, educators, and other service providers in the arts and in “passion” professions can struggle as entrepreneurs. Many of us are caring, compassionate, and generous people who genuinely want to help people in need.
In this post, the “Cashflow Killing Clients” I’m going to elaborate on what I’ve found to be the four most common kinds of clients who could be more likely to take advantage of our generosity, particularly in our capacities as private teachers, mentors, and other professional services. Sometimes, this is intentional on the part of the client, and sometimes it’s unintentional or happens on more of a subconscious level, so they may not even be aware—and you may not even be aware! This post is about helping you become aware.
It’s important we at least be mindful of the deeper reasons or circumstances behind why some people can be difficult to work with, especially when it comes to paying us for our work. My goal in writing this post is to not only empower you with ideas and insights to help you navigate your sales or negotiating conversations, I also hope this helps you get clarity as to when and where you can develop healthier boundaries with your inherent desire to be charitable for those legitimately in need.
Cashflow Killer Client #1: Someone who is new to adulting!
On the one hand, our younger generation includes some of the smartest and brightest in history. But there are a number of people—really of all ages!—who seem to have yet to mature into being fully self-sufficient, responsible adults.
And don’t worry… if you’re reading this, I’m likely NOT talking about you!
I’ll be the first to admit I can speak from experience on this. After racking up a lot of debt at a private out-of-state college, I returned home to Michigan to live with and take care of my father as he was recovering from cancer. Even with a full-time job as I worked on my Masters degree, I was certainly guilty of allowing my dad to keep on paying for certain things, e.g. utilities, car insurance, etc. Since my own paychecks often came every other week from my father’s, I was at least able to do my share of helping him in return as we both were living paycheck to paycheck.
When you are used to your parents, your financial aid, your employer, or some other resource footing the bill, it can take time to get used to taking personal responsibility and doing it yourself. I’ve had my moments of letting certain bills lapse! Many of us are simply dealing with 10-20 years of subconscious programming in which there is an instilled habit of not having to be responsible. Hence, I often ask:
“Are they entitled to someone else paying, or are they just conditioned to expect someone else to pay?”
OR I may ask:
“Are they entitled to it being cheap or free, or are they just conditioned to expect it to be cheap or free?”
All that being said, it’s also no secret too many younger people are struggling economically no matter how hard they work. Many also don’t earn as much or don’t have nearly as much discretionary income as their parents. When the cost of living keeps rising, but the entry-level jobs after college are scarce or don’t pay close to enough, it’s not responsible to simply blame any internal sense of entitlement. The people who most love to inflict shame onto others for supposedly not being financially responsible need to also take responsibility for their role in enabling our societal circumstances. We’re all in this together, whether we like it or not!
I don’t have all the answers, but one contribution to the solution I’m making is helping more people actually earn more as entrepreneurs. And if you do serve clients who may fall into this category, be sure you have firm boundaries in place so you don’t unintentionally assume any kind of surrogate parent role. Be sure you are regularly demonstrating the true value of what you’re offering, teaching the seriousness of meeting their responsibilities—especially if they want to emulate your career success!—and helping them find ways they can earn more too. The more you can help them avoid any kind of victim mindset or helplessness, the further ahead of their competition they will already be!
Cashflow Killer Client #2: Someone who is new to modern-day or realistic “real-world” prices.
It’s no secret there are people who expect to pay for some things like it’s still 1984 instead of 2024! And there are still others who believe pay for artists and teachers should be optional like it’s still 1954 when most were supposed to have husbands who already earned enough! Almost every professional service fee today should be at least double, if not triple or more, from what it cost around the end of the previous century.
One part of this problem ties into how wages, especially in professions dominated by women, have simply not kept up with inflation for far too many. And it’s even worse for teachers, who now on average earn 26.6 percent less than comparable college graduates. We can at least anecdotally infer that professional services by artists and educators in the arts likely have lagged even more.
Another less spoken part of the problem for artists and educators in the arts, which I alluded to above, is how many people simply haven’t had to get accustomed to paying the full price from their own wallets for their artistic and educational experiences. Schools, government agencies, foundations, corporate sponsors, and other private or public third-party entities often foot a significant part of the bill to make more things accessible.
Thus paying a small business owner full price for the first time can be comparable to the sticker shock you could have if you go to the doctor and pay without insurance. However, unlike say music lessons, you’re less likely to forgo medical care over the price. And unlike say a volunteer treasurer at church who longs for the “good old days,” no one in their right mind would ever say to a doctor, “You’re supposed to have a day job!” or “You’re supposed do it because you love it!” to rationalize not having to pay the stated fee in full.
If you’re running a boutique business, there’s no shame in having a formal scholarship fund so you can afford to help people who are legitimately in need. If someone tries to criticize you for it, ask them to contribute to the fund. Just tell them it’s no different than a university accepting donations for their scholarship funds, or you can point to many examples of other organizations who do likewise.
If you’d like to contribute to my own fund to help clients who are in need, please consider becoming a paid subscriber or “Angel Investor” with this Substack!
Cashflow Killer Client #3: Someone who cares more about keeping up with the Jones’s.
Here’s a potentially controversial hot take: What if I suggested that someone trying to keep up with the Jones’s might have a much greater need for a discount, at least psychologically, than someone in a much more economically disadvantaged situation?
First, let me set this premise up by pointing out there are two kinds of customers: People who buy because they see the true value in the offer no matter the price, and people who buy just because they want the cheapest price. We’re all susceptible to falling into the latter category at times for different products and services.
At times, it can feel like there’s no shortage of people who are clearly not that broke but will try to treat boutique business owners and service providers the same way they’d treat a car salesman or store manager in an effort to get the cheapest price or the “Best Buy” possible. Going out of your way to appease what I like to call the “Karens trying to keep up with the Jones’s” too often can have a serious impact on your bottom line.
Middle-class life in particular can often feel like being stuck in between a rock and hard place though. You’re often never really earning enough to really get ahead, and then you still have to deal with shame and guilt if you spend too much or if you spend too little. The judgmental culture in our society, amplified by social media, causes many to be afraid to ask for any kind of help, even from family, and even for investing in lessons from the right teacher. “You should budget better,” “Get a better job!” or “Get someone cheaper!” are just a few of examples of what people would rather say in lieu of helping. So seeking a discount or a price match may feel like an emotionally “safer” option.
Meanwhile, someone in a more disadvantaged economic situation may have an easier time asking for help or otherwise being resourceful. They may be used to asking and are not bothered by the rejections, or they have less of a reason to care what people may think because they already have nothing to lose and everything to gain. Moreover, the actual value proposition of your offer may also have a greater positive impact, financially or otherwise, on someone less economically well-off. Therefore, they could be more likely to really respect the price of your offer and be more open to being resourceful to pay your full price.
For example, imagine your offer helps a student get hired for a gig that pays $2,500 or you’re able to help them to achieve something with a similar significant ROI. That could be a much more significant and immediately meaningful amount of profit to someone earning around $30,000 a year versus someone earning $130,000 a year. To the former, that could be a couple month’s worth of rent or a significant business investment, while to the latter, it could be just another Taylor Swift ticket.
Additionally, like with their education, their economic situation may qualify them for other forms of public or private assistance someone earning more couldn’t qualify for. So whatever the reasons, don’t always assume they can’t afford to pay; someone else who can afford it may be footing the bill anyway.
Now, let me reiterate that all of this is not to say you shouldn’t offer help if they genuinely need it and ask for it. But if you’re encountering someone trying to pass for being broke while snapping Instagram selfies in their Mercedes on their way to the Taylor Swift concert, don’t be afraid to ask them if they care more about getting the best outcome or getting the best price.
Cashflow Killing Client #4: Someone who is just an Asshole!
There’ll almost always be some people who may lie, cheat and/or steal, or they’ll simply never respect or care about you and what you have to offer. Whether they are characterologically disordered or some other factor is at play, trying to work with them is almost never worth it. There are also serious legal, financial, and other risks that come with getting into a situation that goes beyond the appropriate scope of duties for your work.
So just let them go!
BUT… do make sure you’re not just dealing with one of the many people who may come across as assholes without intending it. I’ve been guilty at times. Wake me up prematurely in startling way or interrupt me when I’m in a creative state of flow, there’s a chance I won’t react with a perfect smile. If I’m in a purchasing situation that isn’t going as expected, I might also come across as suddenly being upset, cold or calculated. Same for many other customers or clients who might not be ready for surprises or the results of the fine print they didn’t read.
If the assholes aren’t the clients themselves, and you may be dealing with a spouse, parent, or someone else your students or clients need support from, here are two ways you can deal with it:
First, be sure to stress the true lifetime value or return-on-investment of what it is you have to offer. If the outcome is reasonable and the numbers logically back it up, then even the most egregious person could eventually understand the opportunity is worth it.
Second, help the client create an empowered pathway so the lack of support by this other person is irrelevant to their ability to be your client. If they want it badly enough, they will find a way. It could be as simple as helping them setup a Patreon or Substack or something else that simply generates the extra income. More thoughts in this article:
That’s it!
Here is a brief recap of the clients that can kill your cashflow—if you let them!:
Those who are new to paying for things.
Those who are new to paying modern-day prices for things.
The “Karens” who are trying to keep up with the “Jones’s”
Assholes
The beauty of being an entrepreneur is you have the freedom to say “No!” to serving difficult people. I hope this article helps you get clarity about whether or not you should keep on keeping on with them or if you should move on. Remember there are more than 8 billion people in the world, so there’s no shortage of replacement clients waiting in the wings. If you want help getting more clarity on who you’re most meant to serve, send me a message or book a session and we’ll talk more.
Thanks for reading!
