THE BLOG
03/05/2014 10:38 am ET Updated May 05, 2014

Beating Busters: How To Identify And Avoid Bad Clients

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This week's piece deals with one simple fact: in business, you're going to get ripped off.
Get used to the idea. Over time, luckily, you will learn how to spot what I like to call busters, or bad clients. Here is a list of the different types of busters I've come across over the last 15 years in business. Hopefully my bad experiences will spare you the same headache. Look out for these guys!

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Types of Busters

1. The Promoter.

The promoter is probably my favorite type of buster simply because they're so entertaining (and easy to spot). A promoter is full of energy, and everything with them is bigger than life! I think of a carnival barker: "Step right up! Step right up to the greatest design project on earth! Wealth and fame beyond your wildest imagination are just behind this curtain!" They feed off your emotions, pump up your ego and make outlandish promises. They also operate with a constant sense of urgency. They'll promise you part of their "can't­ lose" business, but there are never any contracts or lawyers, just empty promises. There is always one more problem, one more project, one more step.

Fortunately, the deposit first policy works very well with promoters. They will never give a deposit, or pay a dime. But one funny thing is that they're so damn persistent. Even after you tell them your policy ... it's likely they'll say something such as: "Great! No problem. I'm happy to pay a deposit. I just need this one little project done before I'll have access to cash
to pay that deposit!" Don't get sucked in! Stick with your policy!

2. The Delegating Entrepreneur.

The Delegating Entrepreneur is also deflected easily by a deposit policy. They are a little like The Promoter except the main crux of their pitch is that you will be a part owner of the company. They will also play on your emotions and hype the dream of "your" business. But here are the problems with these types of busters:

First, "The Company" is mostly just them giving you work. They don't do much themselves other than daydream about how amazing the company is going to be, then pile up more work on you. Second, they're not necessarily good businesspersons, they just happen to be arrogant and overconfident, so it's easy to believe in them. Third, if "your" company ever does start to make some money, this buster will surely keep it himself or sink it into other people to build the business more -- after all, he already has you working for free.

This is not to say that there aren't good, honorable entrepreneurs out there who need a business partner. But taking on a business partner is a serious undertaking. In my experience, nine out of ten people who will quickly offer you a portion of their business in exchange for free work are busters.

3. Mr. Add­On

Mr. Add­On is the first type of buster who slips past the deposit policy. He or she will pay
you for the services that they have you quote. Here's their trick. They won't tell you everything that they need done. Then at some point during the design process, they'll start asking for a little more. They try to play­down the amount of work something will take and try to make it seem like it's part of the current project. You might hear something like: "Now
that you've finished my business card, can you just slap that information onto a letterhead? That should only take a second, right?"

If the designer in your company is not the salesman, Mr. Add­On will exploit the situation by telling the salesman as little as possible, then trying to trick the designer into doing extra work for free. It's important that your staff knows exactly what's been paid for when dealing with this slippery buster.

4. The Slave Driver

The slave driver is similar to Mr. Add­On with one critical difference. Mr. Add­On is at least pleasant in his approach. The Slave Driver is merciless and hard to please. He may not add­on to a project, but he's going to squeeze every ounce of effort from you that he can. The Slave Driver is incredibly picky. He'll make you feel like you've made a mistake, done a poor job or misled him in some way. He'll lay heavy guilt trips on you. The difference between a high­maintenance client and a slave­ driver is that when you're done with the project for the slave driver you never want to work for them again.

5. The Long­Con­Artist

This type of buster has a long term plan. He's trying to get design services for free, or for a greatly reduced rate. Here's his plan: pay for services, get most of my work done, then act like something is wrong, set the designer up for failure, then demand their money back.

This type of buster starts out all sweet and loving, but the closer you get to completing his or her project the more difficult and demanding they'll become. At some point they'll start shifting deadlines or making demands that are virtually impossible to accomplish. Near the end, this con­ artist will start acting inappropriately upset, start claiming that you've somehow hurt his business. He or she will invariably ask for a refund, refuse to pay his balance or even threaten to sue you. All of this is done as a way for him or her to steal your design services for as little as possible.

I'm sure there are many other types of busters out there, but these are the most common ones I've come across over the years. It takes time and experience to know how to identify and deal with these sleazebuckets.

Good luck and stick to your guns!

This blogger graduated from Goldman Sachs' 10,000 Small Businesses program. Goldman Sachs is a partner of the What Is Working: Small Businesses section.

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