Do you worry your associates may be stealing clients? It’s a common concern for anyone building a service business.
If you don’t take on associates or sub-contractors you may limit the potential size of your business and your income.
But if you do won’t clients and associates be tempted to cut out the middle (wo)man and deal directly with each other?
You need to have a strategy to take care of this. Here are some top tips.
Do your clients want to be stolen?
No-one and no law can force a client to do business with you. If your client works exclusively with your associate and does not see you as adding much value they are going to be tempted to offer to work directly with the associate to save costs.
- Make sure you use more than one associate wherever possible by introducing specialist associates for specific tasks.
- Reserve some tasks to you if you are still at that stage in your business
- Have regular pre-planned check ins with your client to make sure you are in the loop
- As long as your client perceives you as adding value they will not be easily tempted to cut you out.
Make sure your client contracts (ts &cs) contain clauses that allow you to recoup to the cost of recruiting and training up a replacement if they do poach your team member. Have you calculated what this is?
Are your associates thinking of stealing clients?
Many associates like working as associates. They don’t have to worry about finding the work, pitching for it, invoicing it and credit control and a lot more besides.
For many people this is an ideal way to work – self-employed and flexible but without all of the stresses and strains that come with having to do all of the business process.
But some associates look at the difference between the rate they are paid and the rate they are charged out at. To some it can look as if you are taking unfair advantage even when you definitely aren’t.
Some are just naive about how businesses and finance really work while others really do have a positive eye on building their business using your clients as a starting place!
- Make sure you find out how much work your associates needs and what they need to earn. If you are keeping them ‘hungry’ they are going to be more tempted than if you are giving them what they need.
- Make sure they are not the only associate on your team with the skills to service their main accounts. Mixing and matching for holiday, sickness, and specialist skills sends a powerful message to all concerned as well as improving continuity of cover.
- Make sure your associate contracts (hiring agreements) contain everything you need to protect confidential information and stop them from working for your clients for a reasonable period after they stop working for you.
Contracts work differently B2B
You will hear a lot of people saying that you can’t enforce clauses that prevent your associates from working for your clients. A lot of that is based on a half understanding of how employment contracts and ‘post termination restraints’ work. Even they can be enforceable if written correctly and you are not greedy about how far you go.
But in the world of B2B, where your associate genuinely has a business of their own, you have a great deal more flexibility to protect your growing business and confidential data.
What’s your strategy for client ‘stealing’?
Sometimes having a word about the financial effects is enough to head this off. On other occasions you may be happy for the client and associate to work together directly if you are withdrawing from a particular area of service provision. With the right contracts in place you can effectively ‘sell’ the release of the restraints.
You may sometimes want to give your blessing to such a change. But it is important that you get to choose.
You range of options will be considerably greater if you have got the right contracts in place ‘end to end’ starting with the client and going right through to the associates. Don’t leave it till trouble starts to try to put them in place!
KoffeeKlatch contracts are all about keeping you in the driving seat and getting those ducks in a row. Find out more about our associate contracts here.