Jake and Gino of Wheelbarrow Profits invited Garrett Sutton, Esq. on their show.
In this episode you will learn how to:

• Identify toxic clients
• Finally understand if the customer is always right
• Who’s at the highest risk for toxic clients
• How to listen for toxic clients
• Strategies to avoid toxic clients
• Strategies to deal with toxic clients if you already have them
• How to identify the “freeloader”
• Instincts
• Mental health
• “Entitlementia”
• Toxic employee’s
• An so much more!

Want more from Jake and Gino?

Transcript:

welcome to the wheelbarrow profits podcast where you get multi-family
0:04 investing a real learn from top players in the real estate investment world as
0:09 they share their secrets with you and discover proven strategies on apartment
0:13 investing actually work to learn more about wheelbarrow profits visit jake and
0:19 juno.com your one-stop shop for everything
0:23 multi-family now to your host Jake and Gino
0:27 hello everybody this is jake stanziano host of the wheelbarrow profits podcast
0:31 here with my co-host the multifamily mentor the coach the chef the father of
0:35 six the best-selling author the GD g no Barbra Jean how’s it going
0:39 she loved the great how you doing always making it happen big man
0:43 hey today’s guest is garrett sudden Garrett is a nationally acclaimed
0:47 corporate attorney and asset protection expert who has written a number of books
0:51 guiding entrepreneurs and investors Garrett has written many bestsellers
0:56 including books for Robert Kiyosaki’s Rich Dad advisor series and most
1:01 recently the book toxic client Garrett has over 30 years of experience in
1:07 assisting individuals and businesses to determine their appropriate corporate
1:12 structure limit their liability protect their assets and achieve their goals
1:17 wow that’s that’s a long list right there and I cut a bunch of it
1:20 so without further ado Garrett welcome to show Thank You Jake it’s a pleasure
1:24 to be with you today hi Karen how are you good i Doan genome as you can see
1:29 with big fan of yours as the butcher first book back into one and I told
1:32 Elizabeth I said why he hasn’t changed at all in 1516 years looks just as good
1:36 he did 15 years old you gotta give you gotta give me a secret when we’re off
1:39 the phone okay i will do that and so so Garrett tell us a little bit about
1:44 yourself and how you transition from corporate attorney two best-selling
1:47 author and top business advisor
1:50 well I grew up in the San Francisco Bay Area and went to the University of
1:54 California Berkeley studied Business Administration went across the bait is
1:59 Hastings law school in san francisco that’s the University of California’s
2:04 law school in San Francisco and I practice law in San Francisco and
2:08 Washington DC and just got tired of the traffic and all in the bay
2:13 area and moved up to Reno I’d spend my summers at lake tahoe I like skiing in
2:17 the mountains and it was a great move and when I came to reno I became
2:22 acquainted with some people who were friends with robert kiyosaki and one
2:27 thing led to another and i was just you know chosen to be the rich dad advisor
2:33 for corporations and asset protection and that has been a great experience
2:37 I’ve traveled all over the world with Robert and his team of two weeks ago we
2:42 were in Australia with events in sydney and melbourne I talking about rich dad
2:48 poor dad and how to advance your your financial standing so it’s just been a
2:53 great experience to to work with Robert and you know one of the tasks i’ve been
2:58 assigned with his writing these books which are really law for the layman
3:02 they’re not a technical legal book there are more books involving case studies
3:07 real things that people go through and then applying the legal principles
3:12 through the story so that’s been very enjoyable and not just it’s just been a
3:18 great run into meet and work with guys like you and help educate the public
3:24 certainly they’re not teaching this in school so you gotta go get it yourself
3:28 and for all your listeners congratulations i mean you need to get
3:33 this information yourself because they’re not teaching in schools so it’s
3:38 really important that we get the word out there that you can still do well in
3:43 the United States you just have to not pay attention to what you learn in
3:47 school and that is fantastic
3:50 amen and his that’s coming from someone with a lot of schooling too so it’s not
3:54 can I do that we just barely passed their abs and just got a really yeah you
3:58 know I want to pivot into the two books you sent me and I read both of my months
4:03 I’m halfway through this one this is a great book for anybody but we want to
4:06 focus on a toxic line today so let me show you in the book great book toxic
4:09 line like I told garrett before I felt a little queasy as i was reading it
4:13 because it hits home and a lot of my you know a lot of the deals I’ve been doing
4:17 I’ve been in business for over 20 years I’ve dealt with terrible tenants . of
4:21 great tenants 142 the terrible ones always stand out even if it’s like the
4:25 five percent of the two-percent chickens
4:27 and there I stick with you that your soul right yeah because you have 70
4:30 units have 700 attendance if you have one percent of them being bad that’s
4:34 still a significant amount of seven or eight her that are there so I want to
4:37 jump in a few questions about the book number one who is a toxic client would
4:41 you define a toxic like being a toxic client is more than just a mere nuisance
4:45 client that this is a client who set you back like you were saying Jake a minute
4:51 it touches your soul you remember these clients forever
4:54 I and they they set you back I they hopefully provide a lesson so that you
5:01 never treat a club a client the same way again you don’t get into situations
5:05 where toxic clients appear and and create havoc but the other thing that is
5:12 important to know is you know if you’re the boss of the organization your staff
5:17 may be dealing with toxic clients and you have to support your staff if
5:21 someone comes to you and says this guy is really hard to handle
5:26 I and you say all it’s important we need every client we can
5:30 that’s not the right way to handle I think you’ve got to support your staff
5:33 your staff is more important than any one client and listen to your staff and
5:38 and perhaps the the only way to deal with this type of person is to let him
5:42 go or or you know not having to climb fire them as a client so that i
5:48 recommend that throughout the book as well what what are the implications to
5:52 the employee if you don’t stand by that employee and you say no look we just
5:56 need to go get the money from this person and you continue to let them be
6:00 beaten down by the toxic client
6:03 well we offer strategies on how to get paid but if you’re gonna keep that toxic
6:08 client as part of your stable clients uh you know your your employee morale go
6:15 down
6:16 I you know people need to know that you have their back and if this person is
6:20 causing stress unneeded stress on your employees I think you have to factor
6:26 that in into the whole business you know too many of these toxic clients you know
6:32 we’ve all heard the 80-20 rule where eighty percent of your revenue comes
6:36 from twenty percent of your clients well it also apply
6:39 to the toxic line eighty percent problems come from twenty percent your
6:44 clients i’m gonna be nice to get rid of that twenty percent and focus your
6:48 efforts on the good client so you get along with that you know whose values
6:52 you agree with and you know that your your staff will be willing to work with
6:58 without going home at night dreading coming in the next day that’s thanks how
7:03 did you come up with those stories in the book you know Gino as a lawyer I I
7:07 deal with people who need asset protection you know if you operate as a
7:12 sole proprietor you can be personally sued lose everything and so one of the
7:16 reasons that you would set up a corporation or an LLC and the stories
7:21 I’ve heard from my thousands of clients is these toxic clients one of the
7:25 reasons you want to have a corporation or LLC is that these people can be
7:30 vindictive and vexatious they tend to sue a lot more than others and so I in
7:37 in talking with my clients I’ve learned that a number of the had toxic clients
7:42 and that’s the reason they’re incorporating and so it just seemed like
7:46 almost a public service to put a book out there warning other new business
7:51 owners especially new business owners who don’t have the track record and
7:55 experience to identify these people right up front to to just provide a
8:00 guidebook for how to deal with this percentage of people out there that can
8:05 really make your life miserable
8:07 well you know it’s but what’s cool about it was cool as I think everyone has to
8:10 have one or two toxic clients hopefully the only get one then they’ll pick up
8:14 your book and go wow
8:15 because it’s really hard to read the book sometimes to say well that’s not
8:17 gonna happen to me well hopefully it happens you early on in your career and
8:20 you can shed that instead of happened inside of me letting you go on and go on
8:23 if you read written a book ten years ago I might have avoided a lot of that pain
8:27 in my life you know
8:28 yeah i was just saying it could be the toxic employee as well right
8:32 yes absolutely yeah but Gino is funny talking you before we got on the show I
8:37 mean you in reading the book you identified clearly with some of the
8:41 situations for when in the book and I have that reaction from a lot of people
8:46 they go man
8:48 I have that client
8:51 it’s so true you know and it’s a way to is is the customer always right in your
8:55 mind
8:56 no I right about that the customers certainly not always right away right
8:59 when they won’t pay you are they right when they show absolutely no gratitude
9:03 for all the effort you put in the customer is certainly not always right
9:08 we want to deal with the good clients we want to treat our good clients is always
9:12 being right but this idea that you have to deal with people who are miserable
9:17 types of people and and make sure that everything is right for them is nonsense
9:22 if someone is not the right client I fire them move on
9:28 do not let them damaged or your business
9:31 Garrett one of the things that I’m struggling with now going forward as the
9:33 internet and people getting on and writing an addictive because of the
9:36 problem with the internet is if you love the person you’re not gonna get a
9:39 referral
9:40 but if you hate him you’re nine out of 10 * gonna write something so how do you
9:43 deal with that because we’re in the business we have a lot of clients for a
9:45 lot of tenants we’re trying to service everybody but i wanted to bad can leave
9:49 a terrible review and leave a mark on you so how would you deal with something
9:51 like that you know i think that you have to take those negative reviews with a
9:55 grain of salt i think most people realize that competitors write negative
10:00 review I i think that most people realize that a certain percentage of the
10:06 population is never going to be happy no matter what you do and so I take
10:11 negative reviews with the grain of salt
10:13 I’m you can’t really go out and prevent them right and they’ve done studies
10:20 where if you have a negative review on your site your credibility goes up
10:25 yes we know people accept that there are negative reviews out there and if you
10:29 leave them on there and especially if you make an effort to try and resolve
10:33 them but you leave them on there and and show people that you’ve attempted to
10:38 address these issues
10:39 um I i think that’s the best you can do mhm that makes sense why are so many new
10:45 business owners at risk with these toxic clients
10:47 well again they don’t have the experience you know they they just
10:51 haven’t seen the patterns that are out there every industry has a you know
10:56 different patterns of toxic clients and as you get into business and real
11:01state or in sales or whatever you’re in you’ll start to see the pattern of
11:05deception that some clients will put you through I and as we discussed in the
11:11book a lot of clients say they like to do business with new businesses you know
11:17they they feel like they’re doing a favor there helping a young guy out but
11:21a certain percentage of those people know that they can take advantage of a
11:26new business and so you have to be on the lookout for that and you don’t have
11:30all the instincts right up front it takes a while to develop those instincts
11:34but by reading the book you will see that these these are common patterns
11:40throughout any industry trade and you just have to be aware of it up front
11:44that these types of people are headed your way you talk about active listening
11:49in the book
11:50how is that so important well too many of us Gino are distracted by our cell
11:55phones were texting we’re looking at emails and if we don’t listen carefully
12:01we can miss some of the queues of a toxic client so especially that first
12:05interviews if you can meet in person that’s all the better because a lot of
12:10people will give off their true colors by their body language you know the
12:15rubbing themselves all the time and that’s because they’re not square with
12:18their subconscious
12:19mhm I’m if you’re just on the phone you just you need to focus on what that
12:25person is saying because in many cases they will tell you right up front that
12:29there are toxic client for example a client that always says you know i have
12:35had trouble with real estate brokers the last three brokers I’ve had should be in
12:40jail for fraud that’s not a good client you going forward but that client is
12:46going to be bagging on you next
12:48so you don’t listen to the ques they’re there right up there front and center
12:52for you you focus on strategies for dealing with angry Korn clients what do
12:56you do that well some people will get angry and some of that anger it may be
13:05justified in a sense that the person feels wrong
13:08and by listening to them and allowing them to vent and off
13:14for you allow that balloon of anger to deflate and by listening to them and
13:18offering don’t don’t apologize but offer ways to resolve the matter
13:24you’d be surprised how many people can can be turned over back to your side
13:29just by listening now some people are so irrational that listening may not be the
13:36answer and in in that case you have to take other measures but I think at the
13:41start you really should listen to that client let that balloon of anger deflate
13:46and ask how you can help them how you can make it right and it may be that you
13:52you can accommodate them and you can give them a referral to to someone else
13:56that’s that’s a solution that you can look at but we want to at least listen
14:01to them because you know with regard to negative reviews a lot of those are
14:06because the business never really listened to them they wouldn’t return a
14:10call it wouldn’t listen to the anger and I think you have to listen to the anger
14:14to get through and in many cases you’ll be able to solve the problem
14:18mm you have a whole chapter on line clients
14:23why is that that’s that it’s a lot of time dedicated people lying huh you know
14:27they’ve done surveys and and people in regular discussions lie all the time
14:33I mean people are just lying you know tens of times per day and so I it was
14:40interesting that they did a survey and the only people that were better off
14:45than the general public at identifying Liars not even cops are judges the only
14:51people that are good at identifying Liars is the Secret Service and other
14:56than that everybody else just can’t identify a liar so you just have to be
15:01very aware that there are many liars amongst is so hard
15:06yeah you know weird you know our talking to the pages about employees we had some
15:10employee theft going on in one of our offices and the person was great they
15:14became that a nice corporate background they’re performing really well and you
15:19just how do you pick that out let’s give you that I don’t know stuff but that’s a
15:24tough 1i mean all I can suggest is we
15:27just have checks and balances I mean basically you can’t trust you can’t
15:30completely trust anyone right but what’s funny about it though is that the way
15:36the theft is it was only a few hundred dollars and I think people who lie i
15:40think they really convince themselves that they’re not lying aka the whole
15:43political system
15:44I’m really truly think that these people are lying really believe what they’re
15:48saying I think they’ve just been I it just becomes part of them upon becomes
15:52in me and they don’t know what the heck the truth was anymore so whatever
15:55they’re spewing is basically alive so that that’s that’s difficult to deal
15:58with that’s a tough one that’s tough to deal with
16:00that’s a good point you know because it you know when it becomes pathological
16:04they they see themselves as being I not lying is as being true to themselves and
16:10that’s important you gotta get rid of right i mean you can you cannot deal
16:13with something like that because he said she said I mean you have communications
16:16and all but then all of a sudden it breaks down whatever they said you have
16:19no credibility left with these people are all correct right right and so you
16:24have to try and put the systems in place but know that it’s not going to be
16:28perfect and and and people will lie it’s an unfortunate part of our our workplace
16:34now that there are people out there that live frequently and I think part of it
16:38is you know in college they’ve been cheating on tests you know there’s no
16:42consequence for really cheating on a test anymore and so it just carries over
16:47into the workplace and you just have to have the systems in place to it to
16:51accommodate the the number of hairs that are out there
16:55very true you’ve touched on in the workplace you’ve touched on going on
16:59you talk about the word freeloader in in the book that adult i write what we just
17:03walk my he described a freeloader is and how that affects you
17:06well the freeloader is someone who is ethically challenged you know it’s not
17:11someone who needs money need someone who thinks they can get away with not paying
17:16and they can be the richest people out there we have a story in the book about
17:21a dentist who just had an opportunity to cheat a house painter and did so of
17:26course he could have paid the house painter but he had an ethical problem
17:29and was willing to take advantage of the situation so that he could get away
17:36without paying
17:37and so the fact
17:39did someone comes into your office and they’re wearing a nice suit and they you
17:44know appear to be upright doesn’t necessarily mean that they’re not going
17:48to try and take advantage of you which means you have to have systems in place
17:52that will get paid so that you’ll get paid up front you won’t do any more work
17:57until payments are made on time and again back to trust you can’t trust
18:01anyone
18:02so you need to have these systems in place and like you when I talk to people
18:07who dealt with toxic clients they said they seem to think say that every time
18:11they make an exception on payment terms is when they get screwed
18:16yeah and so you have to hold tight to these payment requirements because the
18:21the freeloader out there will will surprise you at how well-off they are
18:27but they are willing to take advantage of you if they can save some money
18:31the story with the dentist was trick in the book isn’t the dentist who went on
18:35vacation and he left the painter and equal to pain that I wanted them this
18:38way and the painter did it that way but since he’s probably pathological liar he
18:42doesn’t remember what he said and then you put my reloading a top-of-the-line
18:45he comes back
18:46the paint is like I’m Johnny’s like he wanted that way you want it that way so
18:49he’s stalking a free painting and thats it thats a difficult one to deal with
18:53because i think the patron did almost everything he was supposed to document
18:56everything
18:57maybe he should’ve waited till the guy came home and half the job done and had
19:00half the money at least that would have been the solution for the dentist to say
19:04no for the painter to say it if you don’t want to pay me the next payment
19:09i’ll wait until you get home to a number of color
19:13yeah what yeah what happened yeah and I was even thinking what I’m reading it
19:16maybe the painter could be skyping him or FaceTime him on facebook and say
19:19listen this is the colors are we good with this you’re going to continue if it
19:23is I got a paypal account hit me up on the paypal account and out and I’ll get
19:26this thing done because i’m trying to think of us going forward how we have to
19:29deal with these guys and there’s always communications now you can always learn
19:32that communication now but I felt sorry for the paint exactly feel it through
19:37I feel Jake is you have your crew out there get your money after you do the
19:40job you know you did you perform really well with the guy said and at the end of
19:43the day the guys like not want to pay you like really I mean you know you can
19:46fix it once it’s done it’s impossible to fix that job and I gotta start from
19:50scratch you know it off like it was a true
19:53key situation and that was the the whole point is to make you feel sorry for the
19:56painter uh who acted in a responsible manner but the thing is it was the one
20:02time that he deviated from his standard payment practices and the wealthy Dennis
20:07screwed him so I think in all our dealings I the fact that someone appears
20:14to be able to pay should not be the standard it should be you have payment
20:18standards that you are here to add here too no matter who the client is you talk
20:23about instincts a lot and we talked with the painters instincts they felt why
20:26they so important how long do you think they take to develop you know in that
20:31that’s a good question Gino instincts
20:33some people have the instincts right off the bat they don’t trust anyone
20:38I and others are too trusting and yeah me included as we talked about in my
20:45first case you know you you trust people and then you’re not rewarded by offering
20:51that trust and that helps you develop your instincts
20:54I we we quote a German proverb in their mistrust carries one much further than
21:01trust and so by being mistrustful by making sure that people pay on time I I
21:07think you’re going to be better off then being too trusting and someone getting
21:13into business in many cases learned that the hard way but hopefully it’s only one
21:18or two clients not a slew of clients before you learn that lesson because
21:21eventually be out of business if you’re too trusting
21:24well you know my problem is I’ve been learning different life coaching and I
21:27was saying it like energy attracts so I’m always guilty saying that happened I
21:31do something wrong tracking this negative energy in this toxic line so i
21:34always put upon myself for saying why is this guy in my life
21:37how am i dealing with him so sometimes i take it upon myself unlike it’s my
21:41mistake it’s my fault and I think that’s why people sometimes don’t work on their
21:44instincts as much as say this guy’s not as good so I mean how do we how do i
21:48actually handle that situation because like i said i want to trust people I
21:51want to do business with people and give them the benefit of the doubt but a lot
21:55of times they don’t deserve it you know what I mean right right well that’s half
21:58the battle you’ve identified the problem least right and so I think that you have
22:04to when that new client comes
22:06in I sure you can say that it may be your problem but you can’t make it your
22:12problem in the future and so I think you have to hold hold firm to I steps along
22:18the way whereby the new client reveals himself to be worthy of your time
22:23because your time is valuable and that client who is not willing to pay you for
22:28your time
22:29I is never gonna pay you for your time and so it’s better to just let them go
22:33on their way I right off the bat rather than getting in too deep with them
22:38mhm you had a couple stories in the book by mental health and there was one that
22:42the lady went to the petitioner the salon and kept going back and kept going
22:46back and as a business owner like could you please leave and the sort that he
22:49tried to leave you know how does mental health come into play in this whole
22:53situation with toxic clients you know that’s a great question because of a
22:58certain segment of the population does have mental health issues in the
23:03National Institute of Health says it eighteen percent of the population
23:07I at some point we’ll need to be treated for some form of mental health issues so
23:13they’re out there on a lot of our clients are high functioning clients but
23:18they do have certain mental problems and we need to be certainly understanding of
23:24that but at the same time as we discussed you have to protect your staff
23:29that someone is going to be disruptive in the business even you know physically
23:35threaten people that’s not your job to provide a service for that kind of
23:39client so you have to think of your staff first you have to think your
23:43business and you may have to let that person move on now some of these people
23:49have issues associated with dementia or whatever and there’s an effort to try
23:55and help businesses deal with clients that have dementia and I think it’s a
24:00great program state of Minnesota is leading the forefront in providing ideas
24:07for how to deal with clients with dementia issues because they know
24:12certainly deserve services but they have their challenges but people who have
24:16even more severe challenge like challenges
24:19and are threatening your staff you have to deal with them and let them go
24:24you have to protect your staff first and foremost it’s very difficult because i
24:29was in the restaurant business for over 20 years
24:31I one replace my brother he still owns it I delivery staff going on 16 17
24:35year-olds going out the to poems delivering food I mean one time I
24:39delivered food to some guys house guys in his underwear
24:41I’m like dude really i mean like you know like that kind of mental I couldn’t
24:44make it up so I set them house no one’s going there ever again yes these young
24:48kids going into you know and you know that they come into the restaurant they
24:51start young at these young kids I mean is it their fault that the food was well
24:54done or that the other order took forever so it’s a difficult thing when
24:58you’re dealing with you know your staff is specifically young in our case 15 16
25:0117
25:02they’re just getting into the workforce and you really as an owner have to
25:05protect them and really have to get rid of that client as soon as possible and
25:08it’s easier said than done because we’re in a small town so it’s hard to cut that
25:13client but I mean you’re right together the quiet as soon as possible on the
25:17best strategy to take care of that you know yeah and i think your strategy for
25:22you know redlining that that place a bit you know that residence is the right one
25:27I mean you have to protect your staff and your uh your employees first and
25:33foremost that’s right i have a responsibility because I know about it
25:38now I religion because i actually went there for you if I didn’t know about it
25:42I’ve got a crazy things you go deliver house they have dogs coming out of the
25:46kids barking and it’s just a lot of real stuff that you know that you have no
25:49control over it once you know there’s a problem you have to nip in the button
25:53like jake and i like to say you have to cut out the cancer so I think that’s the
25:55best thing to do right up here in the chapter and drugs and alcohol you a
26:00great quote from robin williams i don’t remember huh
26:03can you look at you like this on it oh gosh yeah but as a as an alcoholic you
26:09will violate your standards quicker than you can lower them I yes you know and
26:15anybody who’s dealt with an alcoholic realizes that I mean that is a that is a
26:22serious problem known throughout the United States and and these people are
26:27adapt at covering up their alcoholism and
26:31then demanding or you know insinuating themselves into situations where they
26:37want a discount they want favors from you I and and that the cover-up and the
26:44generations that they go through i would exhaust a normal person and so you just
26:51have to be aware that the alcoholic or the drug user is going to not only try
26:57and cover up their problem but take advantage of you
27:01so that they have more money to pay for their dependency that’s what it’s all
27:06about is they want to be able to get a discount from you so that they have more
27:11money to self-medicate and you have to be aware of that and you cannot they
27:16will seek small concessions they will seek you know whatever discount they can
27:23and it’s only so they can use more drugs and you have to stand up to that and say
27:27absolutely not and and do not give them any sort of leeway because once you get
27:33a little leeway they’ll take as much as they can get who I don’t even really
27:36want to admit it but all these things that you’re talking about Geno and I
27:39have direct experience dealing with it mostly employees and that’s why I stay
27:43in part to this maybe the toxic employee because we’ve we’ve had experience
27:47dealing with employees and so many of these levels and it’s unfortunate we
27:51will leave it at that but it’s definitely relate to all this
27:55i’ll give you both a good good good good story about an alcoholic guy comes in
27:58the restaurant orders food he seemed a little off and with mental so he goes
28:03outside he gets into his car unfortunately gets into the wrong car
28:06and he’s trying to start their own bench outside my moms with me I’m like mom
28:11maybe the next phone calls to the police so this guy doesn’t drive home I don’t
28:14know how he got there you don’t say so and it’s just like it’s unfortunate you
28:18know I mean he’s I don’t know how he got there not killing anybody on and that’s
28:21negligence if you know that as a business owner you see that kind of
28:24stuff
28:25it’s your responsibility I have a daughter is driving right now god forbid
28:28he gets on the phone and he kill somebody and I knew that he was in that
28:31condition are the responsibilities not even legally morally ethically going to
28:36heaven whatever going to say you have to take that you know by the rains i know
28:39it’s uncomfortable situation and I know the guy for 10 or 15 years but hey thats
28:44that’s one that’s one where
28:45where business owners have to step in well absolutely and in some states if
28:49you the restaurant owner are knowingly serving someone who’s drunk more drinks
28:53near there can be liability for the restaurant owner definitely so you have
28:58to be really careful in that situation you talk about entitlement een entitle
29:03mensia can you explain what that means in title match for the word I made it up
29:07so it’s the dementia associated with those who have had a prolonged sense of
29:14entitlement and we see that a lot in our society now people just seemed to think
29:21that they’re entitled to everything and a lot of people believe they don’t even
29:26have to work for it so entitled mention for me is kind of a serious social
29:31problem but as a business owner I you need to be aware that these people will
29:37come in and they’re either you know they’re narcissists their manipulators
29:41and they want to get the best deal possible without regard to you making a
29:47profit you know they just want to come in and they think because they’re so
29:50great and they’re so entitled that they need to get the best deal ever and in
29:56the book we talk about one story where the the car dealer just send people down
30:00the street you know if you think that you’re entitled to it a to buy a Ford
30:05here and and I’m not going to make a profit
30:08I you can just go down to the Chevy deal and then if that person comes back they
30:13charge peter pricing which stands for pain in the ass
30:16have you started executing those people because they’ve been a pain in the ass
30:21and so I I heartily recommend Peter pricing time that you like that and the
30:30other thing in within Title mention is it starts small I mean a lot of people
30:34think that means all music should be free all books should be free that it’s
30:40free you should be able to download art and music for free well you’re stealing
30:45from the author or musician that’s right . and then it just leads from there to
30:51everything else should be free and that it is a problem out there this sense of
30:56entitlement
30:57people have well I think that’s happening now with people are so
31:00entitled
31:00they’re leaving less fulfilling lives because they expecting everything to
31:03them they’re not growing and I contributing all they’re doing is
31:05sucking and then I actually and I actually adding anything to society so
31:09short term it’s great to get something free if you continue to a long-term it
31:13becomes toxic to yourself and your toxic to everybody around you don’t want to do
31:17business with you anymore so I find that to be interesting
31:20you’re right that it’s important to identify toxic clients what are some of
31:23the markers that you find on toxic clients that we can tell the listeners
31:26well that you know the people who expect free services you know if you’re a
31:31graphic designer they want they want spec work done and they asked for this
31:36and they asked for that and they never they never get around to paying you i
31:39mean the client that wants all this free spec worth work rather I i think at some
31:45point you need to say look it’s time to pay the people who are resistant to
31:50retainers ore deposits you know if they’re not getting a willing to pay you
31:54up front are they gonna be willing to pay you when the works done it’s not
31:58likely
31:59um you know just the people as we mentioned earlier who are constantly
32:03running down your profession i mean the the person who says every cpa cpas ever
32:10had has been a crook
32:12you know it and you want to be there next cpa I don’t think that’s a good bet
32:16not so in the book we talk about all these various markers but the the key is
32:23that these people will present themselves to you early on in business
32:28you know as you start a business these toxic clients come out of the woodwork
32:33in part because you’re new and you will see these toxic clients over the years
32:37but as you get better at identifying them as your instincts get a little bit
32:42more home you will be able to weed them out and after a year to business maybe
32:48five years of business you will not be dealing with these people anymore let
32:52them go on to the next new business that opens up and just deal with good people
32:58that you like to work with that respect your time and energy and are willing to
33:02pay you on time in the appendix to provide three ways to collect from toxic
33:08lines let’s discuss them because i think it’s really important years
33:10stuck with one right now you’ve got to go through it how to get paid for these
33:13guys
33:14alright the first one is mechanic’s liens and so if you’re in construction
33:19if you’re a jeweler you can have a lien against the property until you get paid
33:26and in many states the lien . is 90 days after the work is performed and so you
33:33need to make sure that you lean the property very shortly after you do the
33:38work because people will take advantage of you if you haven’t filed Baline so we
33:43talked about how to get a lean then the next one is a small claims court and the
33:50courts around the country they have small informal courts where I if the
33:56jurisdiction amount is five thousand dollars or ten thousand dollars you can
34:01go in without a lawyer and argue your case show the contract bring a witness
34:06and it’s kind of fun rule the formal rules of evidence don’t apply you just
34:11tell your case you tell a story and you explain to the judge why you should get
34:16paid and again i’ve i’ve done a number of times i’ve had clients go do it and
34:21it it’s actually kind of fun because you’re fighting for justice you’re
34:24proving up your case and you get paid so if you get the judgment then you go to
34:30the court and the sheriff will collect from the person that shows you the money
34:35so small claims court is is a great way to go now in some place in canada the
34:41jurisdictional amount is $50,000 that’s great big here you know state-to-state
34:47it’s ten ten thousand five thousand the thing is most business owners know that
34:52you’re not going to pay an attorney $10,000 to collect ten thousand dollars
34:58right they know that it’s going to be expensive to try and collect that amount
35:03so by you going into small claims court where you don’t have to pay an attorney
35:07just argue your case it’s very efficient it’s a very efficient way to collect the
35:15third method of collection is the collection agency and I think everybody
35:19in business needs to have a collection agency ready to go
35:22if you don’t get paid within 90 days there’s a very good chance you’ll never
35:27get paid and so with a collection agency taking you know 22 sometimes fifty
35:33percent you know you’re not going to want to use a collection agency for
35:36every account because they’re going to get a percentage of what’s collected but
35:40at the same time you need to let your clients know that you’re not gonna
35:45accept being stiffed and you’re you know have a collection agency go after that
35:51person and in most cases you’ll get paid i think the mechanics lien is really
35:56important guys there anybody out there the toxic line knows that it’s probably
36:0090 days so he’s gonna push you off as long as possible so contact an attorney
36:04as soon as possible or read toxic line and you’ll know that that’s what they’re
36:08trying to do and just try to get that lead a mechanically not as soon as
36:11possible
36:11you know it’s really important to do that right and each state has different
36:15rules so you want a ton attorney in your state that knows mechanic’s liens law
36:21because you know the difference between Pennsylvania Maryland is huge and
36:25they’re adjoining states so you need to have local council I i just went through
36:31and and took a bunch of notes because i think you said some really great things
36:34and and right from the beginning you identify the the toxic client and it’s
36:39just that someone that’s gonna set you back but also provide your lesson I was
36:42like that is you know learn from your mistakes that was fantastic
36:46you know basically you’re talking about where the stories came from and what you
36:50need to do you need to protect yourself and I think it’s all about the checks
36:53and balances that was one of the huge takeaways the customers not always right
36:57that’s definitely true and i think that you want a big theme from the whole the
37:02whole discussion was that a lot of these new businesses are just unaware they
37:06don’t know what’s good about to be coming at them and that’s these that are
37:09these toxic clients out there and just from genome and my . watch out for the
37:13toxic employee to because that is
37:15yeah we’ve dealt with that over the years and that’s been a huge thorn in
37:18our side
37:19you know you’re going to get negative reviews it’s okay it makes you authentic
37:24that was that was really impactful and the freeloaders come in all shapes and
37:29sizes just because someone’s wearing a suit and tie doesn’t mean they’re not a
37:32bad person so don’t write don’t just think you’re doing work for a doctor
37:35that is the
37:36not going to stiff you stick to your business practices just because he says
37:39I’ll get you I’ll pay you later
37:41no no we we do it this way you did seem like a guy down the street and so many
37:46so many good things that help the alcoholics
37:49I don’t know if it’s stay away from number what’s the takeaway is buttman no
37:52lie to you
37:53right thats that they’re they’re gonna lie
37:56the the markers they want you know these toxic clients want free stuff they don’t
38:01want to do the deposits they’re the ones that the haters online that the ones out
38:05there spewing hatred and then the last part was so impactful look guys the
38:09three takeaways if you’re gonna get stiff by these these toxic clients
38:13looking to put a lien on the property small claims court or the collections
38:18agency and just because we’re in the real estate business for a little tip
38:22the listeners out there we use rent collector global the one of the top
38:26performers out there they collect on average about twenty-four percent which
38:29may not seem like a lot but for the collection world is pretty good so well
38:33this has been so this is so much fun Gary I did you just adjust the ride I
38:37was just sitting there laughing unfortunately it’s not the the with some
38:40unfortunate things but it’s just you’re really entertaining i really appreciate
38:43the time
38:44well thank you take I appreciate being on the show and and hopefully this book
38:48will be a benefit to your listeners because we all face it you know
38:52everybody i talked to roll their eyes and says all my god that i have a toxic
38:57client but it’s really funny i have one client that says you know what for the
39:01next toxic client i just i’m just gonna give him the book just an assume that’s
39:05a great idea like that didn’t work during our employees your day care of ya
39:10on the way out on the way out the door right everyone listen we have some great
39:13employees I don’t want people to think that but we’ve had this couple that just
39:16did they eat your soul right that’s what and that’s the problem that’s the whole
39:20moral story Jake that one or two toxic clients just empower it just destroys
39:24arrest the relationship so my takeaway is don’t focus too much on a toxic line
39:29because it’s gonna ruin the rest of your relationships just identified try to cut
39:32as soon as possible and try to move on but you know they’re all your offer
39:36definitely most employees are great employees most part and the great
39:39employee attendance is just those couple toxic one’s really stick out you know
39:43yeah if this is not a huge percentage of the overall customer base
39:47you know it’s it’s one or two percent for most businesses but boy do you
39:52remember them and implement to garrett’s . have the systems in place treat
39:56everybody the same the same payment plans for everyone and that’s going to
40:00really prevent a lot of this stuff really
40:03hey there how cannot people get ahold of you
40:06well our main website is corporate direct.com and we set up LLC’s and
40:12corporations for people in all 50 states and importantly maintain them you have
40:17to maintain them on a yearly basis so we help people cleanup corporations that
40:21maybe I haven’t been kept up the corporate direct.com is the best way to
40:27go and you know we provide a free consultation with an account
40:31representative if you have questions about how to incorporate so you know
40:35feel free to visit the site and hopefully you’ll set up the right entity
40:40and then you’ll be able to deal with toxic clients as from a prepared
40:43protected position that’s right that gives you a little bit of a shield so
40:47right
40:47hey you’re such an entertaining guy we really appreciate your time thank you so
40:51much
40:52Garrett thank you take care okay that’s gonna do it for today if you found value
40:57in this episode please don’t forget to leave us a review on iTunes
41:01we really appreciate it also if you’d like to speak with us we are now doing
41:06two 30-minute strategy sessions every Friday you can sign up for these at Jake
41:12and Gino dot-com this has been another episode of the wheelbarrow profits
41:16podcast the only show that teaches that it’s education times action that equals
41:23success i’m jake and he’s Gino over and out
41:28we trust me who enjoy the wheelbarrow profits podcasts visit chicken genome .
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