Strategies for Success When Working with Larger Clients

By Dipa Gandhi

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Securing a large contract can feel like landing the jackpot for a small or medium-sized service area business. Whether you're a roofer, plumber, or electrician, landing a contract with a bigger client often means consistent revenue and an opportunity to build your brand. But while larger clients offer opportunities, they also come with challenges that can strain a contractor’s resources and time. Managing these relationships effectively is key to making the most out of these opportunities without stretching your team too thin.

The Challenges of Working with Larger Clients

Working with large companies, or even high-profile individuals, can feel like stepping into a different world. Their expectations are different from residential clients or smaller businesses, and they likely have strict internal processes for everything from project management to invoicing. These differences can quickly lead to friction if not managed properly.

For instance, a local cleaning company in Ohio won a lucrative contract with a national retailer. Initially, the project seemed simple: provide daily cleaning services for five stores in their area. However, after starting the project, they realized the complexities involved. From adhering to strict operational hours to dealing with delayed payments from a central accounting department, the challenges quickly mounted.

Some common difficulties include:

• Extended Payment Terms: Unlike individual clients who may pay upon completion, larger companies often have strict payment terms, sometimes extending up to 90 days.
• High Expectations for Customization: Bigger clients may require detailed reporting or specific compliance with their internal standards.
• Lengthy Approval Processes: Decisions and approvals can take longer, delaying projects or leading to unexpected costs.
• Communication Barriers: Larger clients may have multiple departments involved in the project, leading to communication delays or confusion over who is responsible for approvals and payments.

Navigating the Complexities of Larger Contracts

The key to managing larger contracts is to balance the expectations of the client with your business’s capabilities. It’s essential to set clear boundaries and communicate openly from the start. Here are strategies to manage these contracts successfully:

1. Set Clear Expectations from the Outset

When entering into negotiations, ensure that the scope of the work, timelines, and payment terms are clearly outlined and agreed upon by both parties. For example, a landscape contractor could provide a detailed breakdown of services, pricing, and the expected timeline for a corporate client's multi-site maintenance contract. This clarity prevents surprises down the road and keeps everyone on the same page.

• Draft a comprehensive contract.
• Include milestones for payments.
• Specify any additional fees for scope changes.

2. Build Flexibility into Your Contract

Large contracts often come with a degree of unpredictability. One day everything is on schedule, and the next day, you're asked to make a last-minute change that requires additional resources. By including a clause for flexibility—such as a cap on the number of revisions or a fee for expedited services—you can accommodate changes without sacrificing profitability. A painting company that secured a contract with a large commercial office building built such flexibility into their contract, allowing them to stay on budget despite unexpected requests.

3. Maintain Strong Communication Channels

A large roofing company once learned the hard way how important communication is when handling large clients. They worked on a school renovation and found themselves in a nightmare scenario with multiple departments giving conflicting instructions. After several delays and costly errors, they implemented a single-point-of-contact system, where one team member was responsible for all communication with the client.

• Designate a primary contact person.
• Schedule regular check-ins to ensure alignment on project status.
• Create a communication log to track discussions and approvals.

4. Be Prepared for Extended Payment Cycles

Larger companies are known for their extended payment terms. You might finish the job in 30 days, but not see payment for another 60 days—or even longer. For instance, a plumber working on a hospital’s new wing found themselves waiting months for payment due to the client’s bureaucratic accounting system.

To mitigate this, establish firm payment terms upfront, such as:

• Negotiating a deposit before starting the project.
• Breaking the contract into phases with partial payments due after each phase.
• Utilizing third-party invoicing platforms that track and automate payments.

5. Scale Smartly

Growing to meet the demands of a large contract can be exciting, but expanding too quickly can leave you overwhelmed. A cleaning company in Florida nearly lost a large contract because they lacked the resources to meet the growing demands of a chain of hotels they serviced. They eventually partnered with subcontractors to help manage the load, but not before losing several hotel locations.

Before you agree to a large contract, assess whether your business can realistically handle the scope. If not, consider:

• Outsourcing or subcontracting some services.
• Hiring temporary staff.
• Investing in tools or software to manage multiple job sites efficiently.

Visit this article in Forbes to learn more about keeping your client pleased.

Ensuring Long-Term Success

Once you've landed a large contract, the focus should shift to maintaining a long-term relationship. Larger clients often operate on a contract renewal basis, so your ability to manage their projects smoothly can lead to years of steady work.

• Prioritize customer satisfaction by exceeding expectations, not just meeting them.
• Provide value-added services like regular reporting or maintenance check-ins.
• Be proactive in addressing any issues before they escalate.

Read about more strategies to ensure long-term success with a larger client.

One HVAC company that won a contract with a large real estate firm went above and beyond by providing quarterly equipment performance reports. This added transparency helped them secure contract renewals year after year.