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Performance & Growth

4 Types Of Clients Your Growing Business Can’t Afford To Work With

It may seem counter-intuitive, but firing certain types of paying customers could actually help your company grow.




You’ve probably heard the saying “cash is king” 10 million times. Well, that’s because it’s a true statement – and it applies to businesses of all shapes, sizes and ages.

But, for young businesses in particular, every dollar that comes in the door is especially vital to your long-term survival. According to new data from CB Insights, “ran out of cash” is the second most common reason startups fail.

With that in mind, growing your roster of clients isn’t just important – it’s exciting. When people are willing to pay for the product or service you worked so hard to create, you don’t just feel validated; you also form a special bond with each client. These are your early adopters, and they hold a special place in your heart.

But, what will you do once one of these first clients becomes a problem child and begins monopolizing your team’s time, resources and sanity?

To save or to sever?

When you’re trying with all your might to grow your revenue, cutting ties with a paying customer is probably the last thing on your mind. Instead, you’ll do everything in your power to salvage the relationship, because if the client leaves, so will a hefty chunk of your revenue.

I used to think the idea of “firing” paying customers was preposterous, but I quickly changed my tune after seeing one too many of them kill my margins and spray the internet with inaccurate negative reviews about my company.

Related: How to Get Clients When You Hate Asking for Business

To help you avoid my mistakes, here are four types of paying clients who could be doing your business more harm than good:

1The bully

This customer thinks he’s the most important person on the planet. Every time he calls with a question or complaint, he demands to speak with a manager – or worse, with you. If your reps push back and refuse to transfer him to your personal line, he’ll yell and scream and curse – and maybe even threaten legal action.

Bullies cause workplace stress, and the longer you force your team members to tolerate them, the more likely they are to quit their jobs. According to research from Monster, 42 percent of U.S. workers have changed jobs at least once, to escape a stressful work environment.

Given the high cost of turnover, you’re probably better off keeping your great workers and firing your bullies. Each time I have made this difficult decision, several employees have come to my office to thank me for having their backs.

2The time-sucker

Right after launching my property management firm, I began working with an accountant to make sure all our finances were in order. I paid him about $100 a month, and I definitely got my money’s worth. I constantly called and visited his office to pick his brain – until one day, he sat me down and said, “Mike, I like you a lot, but unless you start paying me more, we’re going to have to part ways.” As a small startup, I couldn’t afford to pay him more, so he ended up firing me.

At first, I was furious – but after thinking about it, I realized he taught me a very important business lesson: Be wary of small clients who eat up large amounts of your time.

When you devote too much attention to overly needy, underpaying clients, you end up neglecting your larger, more significant relationships. If you’re not careful, you could lose happy clients who didn’t feel like they were getting the attention they deserved.

Don’t let this happen to you. Proactively reach out to your largest, happiest clients. Ask them how you can better serve them, or just thank them for being loyal and easy to work with. Simple thank-you notes can go a long way. In fact, as one charity found, notes make people 38 percent more likely to donate again down the road.

Related: How To Entice New Clients By Using Your Own Personal Brand

3The nickel-and-dimer


Some clients will treat your company like it’s a vendor at a flea market. They’ll try to bargain every time you send a quote or invoice. This isn’t just disrespectful; it’s dangerous. Remember: Cash is king.

A healthy partnership should allow for occasional wiggle room on pricing, but once price breaks become the norm, you’ve reached unhealthy territory. You’re probably better off replacing this client with a new one who will recognise the true value of what you have to offer.

In another scenario, perhaps you’ll come across a client who always drags his heels when it comes time to pay his bill – or maybe he’ll just stop paying altogether. Unfortunately, this happens much more often than it should. Last year, Atradius found that 47 percent of B2B invoices were paid after their due dates.

To avoid getting stuck with a partner who doesn’t pay the tab, create an immovable policy.

After a set number of days, cut off all communication and service until payment is no longer delinquent. If you keep working and let the invoices pile up, you are much less likely to collect what you’re owed.

4The online complainer

If a client would rather complain on the internet than collaborate with you to resolve an issue, he or she is putting your company in serious jeopardy. Your online presence is vital to secure new customers. According to BrightLocal, 92 percent of consumers consult online reviews before making a purchase. Further, Cone Communications found that four out of five consumers surveyed said they’d reneged on a purchase decision because of a negative online review.

Related: 6 Tips For Converting Leads Into Clients

We once had a non-paying tenant post more than 50 negative online reviews about our company. He would call to scream at our reps about anything he found unsatisfying, and immediately after hanging up, visit a dozen websites to repeat his complaints. There was literally nothing we could do to make him happy, and even though his long ramblings didn’t make much sense, the multiple one-star ratings he gave us definitely deterred potential customers.

Don’t wait for the situation to get out of hand like I did. Proactively pull the plug if one of your clients becomes a serial online complainer – and also ask your happy customers to post about their positive experiences. Today, I’m proud to say we maintain a 4.5-star rating on Google.

It may seem counter-intuitive, but firing certain types of paying customers could actually help your company grow. Working with bullies, time-suckers, nickel-and-dimers and complainers will result in unnecessary turnover, lost revenue and missed opportunity.

By cutting ties with these clients, you can use your newfound freedom to keep other clients happy and pursue new business.

This article was originally posted here on

Mike Kalis is the CEO of Marketplace Homes and one of Crain’s Detroit Business’s “Top 20 in Their 20s.”

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Performance & Growth

Alan Knott-Craig Answers: How To Build A Debt-Free Business

It’s tempting to go the debt route when building your business or asset base, but be careful — debt can kill your business just as quickly.

Alan Knott-Craig




I’ve been offered debt secured against my shares. I can use the debt to buy a house or buy more shares in my company. I really believe in my company, it’s growing fast. What should I do? — Bob

There’s no such thing as free debt. It always has a catch. In this case, the catch is that if you don’t pay back the debt, then you lose all the shares in your company that you’ve worked so hard to build.

In other words, if your share value doesn’t go up, then you will lose the shares you have.

Maybe you don’t think that’s possible, and maybe you’re right. But you never know what black swan is swanning your way. The president could be assassinated. Russia could declare war on America. North Korea could send a nuclear missile to Japan. There could be another credit crisis.

All of these things would have massively negative impacts on the economy and sentiment.

The economy affects your profits (sales drop). Sentiment affects your ability to sell your shares (no confidence = no buyers).

Suddenly you find yourself staring down the barrel of a debt repayment deadline, and BOOM! You’ve lost your company and your wealth.

That’s not to say you should never take risks. When you’re young you have to gamble a bit. Roll the dice. Just beware of debt. Debt kills.

Related: Dealing With Debt As An Entrepreneur

The only legitimate reason for taking debt to buy shares is if your partner wants to exit the business. Maybe she’s met the love of her life and wants to move to Tahiti, and if you don’t buy her shares then someone else will and you’ll find yourself in bed with a stranger.

If you don’t have the cash then you need debt. Fair enough. But be very careful. Debt kills. I can’t emphasise this enough.

It’s best to live life imagining the shares in your company are worth nothing. That way you won’t live beyond your cashflow. And you won’t take debt against your shares.

If you’re still tempted to get debt, ask yourself, “Do I love what I do?” If the answer is “No,” then definitely do not take any debt. Debt will simply yoke you to something you don’t love. Debt will make you a slave.

Generally speaking, debt is driven by greed. Greed, greed, greed.

And greed always ends in tears.

I want to build a property empire, but every time I buy a new property I’m forced to sell my existing property because the bank refuses to give me two bonds. At the moment I’m struggling to cover my bond repayments with rental income. Advice? — Phumlani

First thing first, read Rich Dad Poor Dad by Robert Kiyosaki. This book will tell you everything you need to know.

In summary, it’s about using the bank’s money to make you rich. Borrow money, buy property, use rental income to pay off mortgage, you’re left with asset and income stream. Boom! What could possibly go wrong?

Here are some rules of thumb:

  • Buy commercial property. A tenant that relies on his premises to generate income will look after those premises more than a simple residential tenant. In other words, you’ll spend more money maintaining your residential property.
  • Location, location, location. Pick an area with low risk of property prices failing. It might be more expensive but your first priority is always “Don’t lose money.”
  • Yield is everything. Divide the annual rental income by the property value. If more than 7%, go for it. If less, don’t. You want the yield to be close to prime rate.
  • Don’t take more than 50% debt. You never know what will happen. If the tenant misses her rent for a few months you want to have a safety cushion so you don’t get caught short of cash when your monthly mortgage repayments are due.
  • Never sell. The transaction costs for buying and selling properties will eat away your profits. Buy to hold. Never sell.

Remember, there’s nothing wrong with growing without debt. Many property moguls never ever used debt to grow their empire. It’s slower, but safer.

Debt is a shortcut. Sometimes it works, but most times it ends in tears.

Related: 7 Ways To Be Debt Free For The Rest Of Your Life

Read this

13-rules-for-being-an-entrepreneur-coverAlan Knott-Craig’s latest book, 13 Rules for being an Entrepreneur is now available.

What it’s about

It’s easy to be an entrepreneur. It’s also easy to fail. What’s hard is being a successful entrepreneur.

For an entrepreneur, there is only one important metric of success: Money. But life is not only about making money. It’s about being happy.

This book is a collection of tips and wisdom that will help you make money without forgoing happiness.

Get it now

To download the free eBook or purchase a hard copy, go to  To browse Alan’s other books, visit 

Ask  Al

Do you have a burning start-up question?


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Performance & Growth

South African Investors And Entrepreneurs, The World Needs You

With governments and corporations across the globe constantly on the lookout for innovators and entrepreneurs, time is most certainly against those who remain constricted by their limited citizenship portfolio.

Amanda Smit




Citizenship-by-investment (CBI) was once seen as something only reserved for the ultra-wealthy, but it is now also becoming the new normal for business investors and entrepreneurs wanting to expand their reach. We live in a highly globalised world where the flow of goods, people, and ideas means that the freedom to move and do business internationally has never been more important. With governments and corporations across the globe constantly on the lookout for innovators and entrepreneurs, time is most certainly against those who remain constricted by their limited citizenship portfolio.

How can citizenship-by-investment benefit South African investors?

First of all, entrepreneurs with multiple passports or residence permits are able to take advantage of the benefits and best practices of all the countries to whose jurisdictions they belong, while also being less vulnerable to a single country’s risks, shortcomings, and unexpected changing fortunes. The more jurisdictions an investor can access, the more diversified their assets will be and the lower their exposure to both country-specific sovereign risk and global volatility. By acquiring a higher quality nationality, one obtains greater global access and is better prepared for an uncertain future.

Nations within the EU, for example, offer citizens and residents access to all 28 member states, as well as to a number of other countries associated with the EU’s freedom of movement charter. In addition to expanded global mobility and a reduction in sovereign risk, alternative residence and citizenship also offer individuals access to career, educational, and cultural opportunities on a global scale.

Related: Funny Thing Happened On The Way To Global Expansion: We Met Our Doppelgänger

The benefits to governments and citizens of host nations


It would, however, be misguided to think that the advantages presented by citizenship-by-investment are for investors alone: for the governments and citizens of host nations the benefits are substantial. For governments, the inflow of extra capital reduces pressure on the treasury and protects national sovereignty by helping to mitigate the need for loans. Indeed, the establishment of a transparent, well-managed CBI program is not dissimilar to discovering a sustainable source of oil within the confines of a country’s national borders. Both scenarios create an immediate injection of new funds into the national treasury, which ultimately leads to greater long-term prosperity for the country and its people.

Successful applicants also bring intangible benefits to receiving countries, such as scarce skills and rich global networks. They add diversity and they uplift host nations through their demands for improved and novel services, which can create new opportunities for local communities. In Malta, for example, the establishment of a CBI program was as much about attracting rare talent as it was about generating much-needed capital in the aftermath of the 2008 financial crisis. Four years after the launch of the Malta Individual Investor Program (MIIP), Malta has one of the highest GDP growth rates — and one of the lowest unemployment rates — of any EU member state. In 2017, the country also reported a record-high budget surplus, with 90% of the gains attributable to the MIIP.

For smaller economies that face increasing trade and industry competition on the global stage, such an outcome can be transformative. Take the Caribbean nation of St. Kitts and Nevis, for example. Three years after relaunching its CBI program in 2007, the program accounted for around 5% of the country’s GDP. A year later, this figure had doubled, and after the sixth year, the figure had doubled again to 20%. By 2014, the St. Kitts and Nevis CBI program was responsible for approximately 25% of the nation’s GDP.

Related: From Local To Global – How To Expand Your Business Internationally

Moreover, other projects made possible through Caribbean CBI programs have had the knock-on effect of boosting employment and contributing to the greening of their economies. For instance, in Antigua and Barbuda an award-winning 10 MW clean-energy project cluster was realised within two years of launching its program. In addition to large-scale installations, over 50 schools and other government-owned buildings have been equipped with sustainable solar-energy systems in order to benefit from the new clean-energy supply. Such innovations were only made possible through the funds conferred by the country’s CBI program.

Thus, the inflows of funds from citizenship programs can be considerable, and the macro-economic implications for most sectors can be extensive. Just as traditional foreign direct investment (FDI) increases the value of the receiving state, bringing in capital to both the public sector and the private sector, so the benefits proffered by CBI — a form of FDI — rapidly turn the fate of a country away from debt and dependency and towards independence and stability.


In short, citizenship-by-investment is a boon to both host nations and investors alike. For South African entrepreneurs and investors who find themselves burdened by visa restrictions and red tape, acquiring a second citizenship is a simple means of expanding global reach, getting ahead of competitors, and giving something back to host nations that are only too grateful to have these talented individuals as part of their community.

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Performance & Growth

First Rule Of Securing Growth Capital: It’s Not About The Product

Paragon CEO, Gary Palmer, discusses the pitfalls facing business owners searching for capital to fund expansion.

Gary Palmer




A common mistake made by entrepreneurs looking for growth capital is fixating on which product they should choose. When looking to finance growth in your business, the decision process should be focused on longer-term strategic priorities and then finding a partner to help you access the right product to deliver on those goals.

Let’s get real

At the outset business owners need to look at their business realities and decide whether they should be looking for debt or equity financing. For example, if a business can only support debt of 2.5 times EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation), and they are already at that limit, then they will need to look for equity financing to achieve their growth goals. In many instances, a combination of both debt and equity financing will hold the key, allowing the organisation to benefit from cheaper debt funding, but ensuring that it is not overextended.

Related: Dragon’s Den Polo Leteka Gives Her Top Tips To Attract Growth Capital

Even if the growth project can be funded through debt alone, business owners face the challenge of dealing with a multitude of institutions, each of which puts emphasis on different aspects of the deal. No business owner can know the minutia of their requirements, and so working with a partner who can help you prepare your presentations is a must.

The challenge becomes all the greater when companies may be looking to finance a non-traditional project. We have a client who is looking for finance to build roads leading to his development. This is not something traditional lenders usually deal with, and so in this instance he will need to access more creative funding options not offered by the banks. Another example is when a founder is looking to buy out other partners, this too may need to go to a lending institution which is able to structure deals for out-of-the-box requirements.

Square pegs, round holes

A common frustration faced by business owners is that some lending institutions sell products rather than solutions. Too little time is spent understanding the needs of the client and designing an appropriate solution, tailored to the client’s unique requirements. These lenders are literally forcing the client’s needs into the limited number of financial products they offer.

It’s going to get more complex

Another challenge for business owners is the sheer number of institutions out there. New funds, new lenders and the plethora of fintech offerings are making it harder for growth companies to find the best offer available. In the US and Canada, more than half of the big property deals are now funded by non-banks. We believe South Africa is headed the same way. The added competition, is of course great for the market and will encourage better service and more creative options, but it does make it difficult for business leaders to keep track of everything available.

Don’t fall prey to borrower’s remorse

In so many cases, companies are in a rush to secure funding and often end up choosing a product which is not suited to their longer-term strategy. Getting out of a transaction can be exceptionally difficult. Far too often companies wake up to better options too far down the line. If more appropriate finance is found, companies will be left carrying the settlement fees attached to their previous funding, not to mention the administrative pain of changing lenders.

Related: Funding Growth

Paragon has over 150 lenders on its books and a network of angel investors which we can access to find the right deal. It’s our job to know exactly what is available and more importantly, to work with business owners to ensure they access lending which is not going to result in borrower’s remorse. The only way to ensure good results is to start the lending hunt with a partner who can help you first determine the right lending strategy, based on your business reality. The alternative could prove both expensive and painful.

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