Blog | Entrepreneurship

How a Toxic Client Could Be Ruining Your Business

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Learn how to avoid working with one ever again

When I left the Marines I had to decide which father’s advice to follow. My real father— my poor dad—wanted me to go back to school and get a good job with a big corporation so I could “climb the corporate ladder” as an employee. My best friend’s father—my rich dad—advised me to “build my own corporate ladder” as an entrepreneur.

I’ve started many businesses. The one I write about most was my first big hit, my nylon-and-Velcro surfer wallet. I write of this company so much because of the painful lessons I learned about patents and protecting your intellectual property. I failed to do that with my nylon-and-Velcro surfer wallet company and ultimately lost everything to competitors stealing my idea.

But I’ve also had a seminar company, real estate investment companies, and of course The Rich Dad Company. Today I want to tell you about a lesson from my seminar company. This company was very different from the wallet company as it was more service based as opposed to production or manufacturing.

In manufacturing you work with a few clients who buy your product wholesale and then turn around and sell your product to their many customers. In service, you tend to work directly with your end-user-customer. If you are successful you will have a lot of these customers. And while that sounds great it can be one of the biggest traps you fall into as an entrepreneur.

What I learned is that about eighty percent of my good business came from twenty percent of my clients. And eighty percent of my problems came from another twenty percent. If you can figure out which clients are the twenty percent problem creators, then you can fire them and spend most of your day growing your business.

The trick is, of course, identifying which clients are the problem clients. My Rich Dad Advisor, Garrett Sutton has a saying, “like pollution or a disease, Toxic Clients are destructive to your business and your health.” As a lawyer, Garrett has seen his fair share of “Toxic Clients.” He’s seen so many that he has created a strategy to spot them and avoid them.

Are Bad Clients Ruining Your Business?

Get your FREE chapter of Garrett Sutton's Toxic Client.

Garrett says, “A Toxic Client is a person that sets you back in a significant way. More than a mere nuisance, they are a distinct detriment to you, your team and your company’s morale. In terms of time, money and effort the Toxic Client is a drain on resources and a drag on revenue. The damage wrought by a Toxic Client can be severe. These are not people who simply bother us. These are people capable of poisoning and contaminating entire organizations”

If your business is going to succeed you must learn to recognize problems, or Toxic, clients before it’s too late. You must understand why such clients are toxic, learn how to extract yourself from a current problem client and, ultimately, avoid working with a toxic client ever again.

There are a lot of people chasing dollars to start a new business or launch a new product. The biggest problem most of them have is that they personally lack experience or they have no team behind them. If the team is weak or lacks experience and a track record, they are much more likely to become victims to the Toxic Client.

I strongly encourage you to download this FREE chapter Garrett has agreed to share with the Rich Dad community. You learn the first secret in identifying, and engaging with these business killers.

As an entrepreneur and business owner you are an optimist. You see the positives and plan for the successes. You must also be a realist. You must plan for the inevitable challenges associated with running a business. You must be aware of all the dark corners. And when it comes to darkness, one of the biggest challenges you will face is the problem client. But once you learned to identify and avoid such clients your team will soar, you business will soar and your businesses won’t be a job, it will become your freedom.

Original publish date: August 07, 2016

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