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The risk of being too nice in business

Having good relationships with your clients is critical to overall business success. For this reason, it is imperative that everyone that you are directly associated with sees you as a ‘people person’. However, being too nice can lead to low productivity and smaller profits.

Before you call me Ebenezer Scrooge, let me remind you of some business scenarios that might be familiar to you: clients that are regularly rude to your staff, very late payment of invoices, staff being consistently late, suppliers missing deadlines, or clients that repeatedly try to receive additional advice for free or continually delay processes by changing their mind. All of these scenarios can eat away at your cashflow and efficiency if they are tolerated due to you being ‘too nice’.

I am very fortunate to work with fantastic clients, many of whom I consider friends. I have a very close business relationship with some clients that go back twenty years; I have even seen some clients children grow up. This demonstrates that being nice and friendly can improve business relationships.

However in some situations being ‘too nice’ is not worth the business. In fact, I have turned away potential clients before for being condescending and extremely rude to me or my staff as the detrimental effect it would have on morale is not worth the money. If we fall into the trap of being ‘too nice’ and put up with this sort of treatment we risk creating an operating environment or negative attitude that will affect other paying clients. It is up to you to ensure that your customers fit with the vision of your business.

Another area where we risk being ‘too nice’ is in following up late payments. Many small business owners have confided in me that they are very reluctant to chase up debts with upset clients or late payments with clients that they want to please. I believe unwillingness to pursue bad debt often results in the downfall of a business. Instead, create a system for following up payments, including a reminder before an invoice is due and an escalation process that includes a friendly personal phone call. This need not offend clients who owe your business money.

In a way, bad debt is akin to theft. If many parties are unable to pay their debts to a business, how can the business survive? Businesses, especially small ones that don’t carry large overdrafts really need to monitor their cash flow.

One of the great things about running your own business is that you can dictate the culture and work ethic for yourself and all who work for you. You can choose to be flexible and kind, but you can also choose to keep on staff who are not performing to the standards you hired them to. Choosing the latter can risk the success of your business. For example, I tend to be a very flexible, lenient boss however I will not tolerate lateness or consistent silly mistakes. I have let staff go because they have been regularly late to work despite warnings and conversations about performance. The good news is they were replaced by new staff that always arrive early and never complain. My business has benefited and I am not being taken advantage of.

Another way we can be ‘too nice’ at the expense of our time and therefore our business profitability, is by allowing clients to cost us time and money. This can happen if they do not value our time, regularly cancel appointments at the last minute, frequently change their mind, draw out processes by not meeting deadlines or approval work, or continually seeking free assistance. This is time and energy that you can be giving to new clients that will pay for what you are giving them.

This is why it is important to manage expectations and to protect your time. Many of these problems actually stem from treating potential clients in a way that you will no longer treat them once they do become clients. Be strategic in how you care for clients and make sure it leaves them satisfied without you losing money.

Being nice should not be the same as being unwise or a push over. After all, you have a business to run!

Do you agree? What do you do to avoid falling into these traps?