Initial Clients

Advice On Finding Your Initial Clients

This information is taken from the Australian version of The Business Legal Lifecycle Book written by Jeremy Streten.
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Phase 3 – Finding Initial Clients

Once you have set up your business properly, it is time to start finding clients to pay your costs, expenses and, of course, yourself. I personally find the Initial Clients phase to be the most interesting and enjoyable of the first three steps of the Business Legal Lifecycle. This is because you are starting to put all of your efforts from the first two phases into practice.  However, finding clients can also be a daunting time because you are worried as to whether or not your business will be a success, and this is when you start to find out.

The good news is that once you get through this phase, the business will start to turn over good revenue and you can concentrate on other aspects of the business as it progresses through the Business Legal Lifecycle. During this phase I will discuss:

Important considerations during the phase of finding clients are:

Dangerous ways of thinking while finding clients are:

Identify Your Ideal Client

During this phase, you need to identify who the ideal clients or customers are for your business. For example, at our law firm, we determined that we wanted to work with small-to-medium-sized businesses (with a turnover of less than $100 million) and their owners.

We also then went through and questioned:

We then drafted a mind map that displayed each method that we were going to use to find our ideal clients and looked at what strategies we could put in place to maintain relationships with those businesses, individuals and referral partners.

This is a critical step as it will help to focus all of your marketing and other work through the subsequent phases of the Business Legal Lifecycle to target your ideal clients and/or customers. Your alternative is a scattergun approach that will not allow you to focus your marketing resources on your ideal client. I strongly recommend that you do not take on every customer or client that comes through your door.

When you are in the Start-Up phase, you naturally want to engage with as many clients and bring in all the work that you can so that you can start to make money. However, this can be a mistake, as we discovered when we started our law firm. We took on everyone that came through the door, even if the work was outside our comfort zone, just to build our client base as quickly as possible.  As a consequence, we did not focus on attracting our ideal clients and we spent far too much time on work outside our knowledge and expertise.

Find out who are not your Ideal Clients

Luckily, we quickly learnt how to cut back on clients. We identified our A-class clients (clients that pay well and give you lots of work), B-class clients (potential A-class clients but who require some work and training on how to conduct themselves in business) and C-class clients (who would never become A-class clients because their attitude to business was so incompatible to ours that we were not able to do business with them as clients). We stopped working for C-class clients, and made a decision that we would allow B-class clients a set timeframe (in our case a year) to become A-class clients, or they were going to be cut as well.

Once we implemented this strategy, we were able to work more efficiently and effectively. By not dealing with the issues that are inherent in B-class and C-class clients, it allowed us more time to work with our A-class clients.

Track where your Ideal Clients come from

What gets measured gets managed’ is a cliché but it rings true with any business. You will find it difficult to manage your business unless you track (at a bare minimum) where your clients and customers are coming from, who is paying you the most, and who is giving you the most repeat business.
There are plenty of great tools out there and if you have a business coach or mentor, you can talk to them about giving you a tool or two to assist in tracking the important aspects of your business.

Businesses Based on one Client or a Government Body

Based on the nature of some businesses, you may start with only one client, or all of your work may come from the government or a government department. If you do go into this type of business, you need to consider that you are still effectively just an employee rather than a business owner, and are at a high risk of losing the business that you put your heart and soul into.

Building a business with only one client or customer is extremely risky as the business is based on one relationship; if that relationship breaks down it could be a severe blow, possibly catastrophic, to your business. Any agreement that you enter into needs to ensure guaranteed levels of work with sufficient notice to find a new source of income if the contract ends. From my experience, this type of business is extremely risky and can place the business owner in severe financial hardship if they fail.

From the Case Files

One of our clients purchased an existing business which only had one customer and worked exclusively for them. The business was a construction business that did repairs for a larger building business to fix defective work. The client’s work for this one particular client was on a contract basis but the work was so specialised in conducting repairs for the one particular type of work that the client had no other clients. Due to the nature of the work, there were no other potential customers for the business. The previous owner who sold the business was friendly with the exclusive client. A dispute arose between our client and the previous business owner on a personal level. The business started to suffer financial difficulties, and then the previous owner ensured that the sole client gave the new business owner no more work. They did this simply out of spite, which in effect destroyed the business as it had no other source of work. Eventually the creditors of the business would no longer wait for payment and the company that operated the business was wound up and the buyer had to take a job at another company.

How and where are you going to get your clients from?

As previously mentioned, finding clients is a major challenge that all businesses face. This is not something you can put off – you need to know where to find new clients. In our case, the mind mapping exercise proved extremely beneficial in helping us to develop a variety of avenues to obtain new clients and we were able to put these strategies in place.

Avenues for finding new clients include:

Summary Of How To Get Clients

It is never too late to introduce formal processes into any business. Without the proper documentation, your business will face increasingly larger risks through the later phases of the Business Legal Lifecycle. The correct implementation of these procedures are essential for your business as timely payments of your debts will ensure that your business operates profitability and that you have plenty of cash flow.

The various matters discussed in this phase will, if properly implemented, ensure that you do not replicate problems in the future. Just remember that if you think that you are busy in these early phases of the Business Legal Lifecycle, you will find that further down the track you will only get busier and you will continue to put these considerations off. Taking action during this phase will assist you greatly in building your business and will enable you to take on employees in the next phase of the Lifecycle, which is Phase 4 – Bringing on Employees.

More Information On Initial Clients

Questions to ask before you progress to the next phase:


Have you determined who your ideal client is?


Have you determined how you are going to market your business to your ideal client?


Do you have a process to sign up clients and document the agreement properly?


Do you have debt collection procedures in place?

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