Inside Secrets to Having Friends as Clients
Posted: Friday, February 05, 2010
by Nina Kaufman
Ask The Business Lawyer
In the early stages of a business, friends can be a great asset. They are willing to refer others to us as they know and trust us.
But what happens when a friend makes a referral . . . and the referral is the friend herself? The dynamics of your friendship can change radically, and often not for the better. [I know -- I've "been there, done that," and got the tatters of a couple of friendships to show for it] Here are some inside secrets to making sure that both your business and your personal relationship with this friend stay happy and healthy:
2. Make clear what your fees are: You are benefiting no one if you discount your products or services for your friend, and later become resentful when you end up making no money. This was the problem Elaine faced when she agreed to help John, her neighbor, with a web design project. She agreed to design the layout with basic graphics, and only charge any out-of-pocket expenses. Elaine bought a new piece of software for simple graphics at her preferential rate (thus benefiting John as well), but unfortunately, the vendor sent her the wrong program. Thus, she had to spend much time sorting it out. Further, John decided to change the focus of his website, and required more graphics work than was originally explained. At the end of it all, Elaine put in far more time than she expected and earned nothing from the project. John on the other hand was upset that the graphics software did not quite work out for his needs and never recommended any clients to Elaine. Not the kind of win-win situation both had envisioned at the start.
3. Write it all down. Friends tend to do business with each other on just a handshake. Not always the smart thing to do. In the case of Kirk and Sharon, Kirk, an accountant, agreed to help Sharon, his former classmate, with working out her tax software. He agreed to sort out one year of taxes for her so she would have a template from which to work with. Once he started, Sharon then asked him to work on the taxes for her business as well. Had Kirk written out his fees and job scope in an agreement, he could have asked Sharon for more money without her getting upset by the request.
4. Find someone else to say "no". If your friend calls up with a business request that may prove problematic for your firm later, do not ignore the warning signs. These could be the onset of a migraine, a sudden tensing of the neck and shoulders, or a bad feeling in the stomach. If you find yourself unable to say "no" to your friend, find someone else in a position of authority to do so. You can ask your business partner, the firm's accountant or the division manager. This person will deliver in a no-nonsense manner a breakdown of the firm's fees and what is expected of the client in terms of fees and payment. This may not be the smoothest of solutions, but gives everyone the opportunity to bow out gracefully, without risking the friendship.
Having a friend as a client can be awkward because it changes how you interact. Your business has to come before the friendship, and that is often a tough line to enforce. In some cases, the best thing you can do is to direct your friend to someone else, as a way of helping your friend and preserving the friendship.
Copyright (c) 2010 Ask The Business Lawyer
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Nina Kaufman, Esq. demystifies legal mumbo-jumbo to save small businesses time, money, and aggravation. She's an award-winning business attorney and columnist/blogger for Entrepreneur Magazine online. Get your copy of her free Contracts & Collections Info Kit and learn more about her user-friendly business law resources at GreatBusinessLawResources.com.
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