Running a business involves constant challenges and opportunities. While many entrepreneurs believe every customer adds value, not all clients are beneficial. Some can drain time, resources, and energy.

Many business owners learn this through experience. When starting out or facing slow periods, it is common to accept every enquiry. Over time, issues such as late payments, excuses, or disappearing clients can arise, resulting in financial loss and stress.

Successful businesses focus on the right customers, not just any customers. Knowing when to decline business is essential. Martial Arts Australia Insurance Services (MAAIS) helps owners protect their operations from risky clients and provides peace of mind.

This article outlines five customer types businesses should avoid, key warning signs, and how MAAIS can help safeguard operations against financial and legal risks.

1. Customers With Bad Credit Histories

Customers with a history of late payments or non-payment present significant risks. Even clients who initially appear professional may later delay or avoid payments, requiring staff to spend excessive time following up on outstanding invoices.

Why It’s Risky

Late payments disrupt cash flow, making it difficult to pay bills, staff, or suppliers. For businesses dependent on steady income, a single late-paying customer can trigger broader financial challenges.

How to Spot Red Flags

• Ask industry peers: Other business owners usually know who pays on time and who doesn’t.
• Request trade credit references: Check with previous suppliers or clients about payment history.
• Check credit reports: Agencies like Equifax, Illion Express, CreditorWatch, and Experian provide business and personal credit insights.
  
  

How MAAIS Helps

MAAIS understands the cash flow pressures faced by business owners in martial arts, fitness, and sports. They advise on trade credit insurance to protect against non-paying clients, ensuring operations remain secure and owners can focus on growth.

“Any contracted items that are not fulfilled by customers can hit businesses hard, especially if it is an unexpected disruption.”

2. Customers Who Prefer Verbal Agreements

Ah, the handshake deal. Friendly, personal, and seemingly trustworthy—but risky. Many businesses hVerbal agreements may seem friendly and trustworthy but are risky. Clients who avoid written contracts often cause disputes over deliverables, timelines, or payments. Without signed agreements, businesses may face costly legal challenges and wasted time.t value.

• Ambiguous deliverables create tension for all parties.
  
  

How to Protect Businesses

• Use written contracts or standard terms of trade.
• Include key clauses: parties involved, contract duration, deliverables, payment terms, insurance, indemnity requirements, and termination clauses.
  
  

How MAAIS Helps

MAAIS brokers, led by Graham Slater, offer guidance on professional indemnity and liability insurance. These policies protect owners if clients refuse to pay or dispute services. MAAIS also advises on contract structuring to ensure agreements address potential gaps, keeping businesses protected from the outset.

3. Customers Who Make Excuses and Avoid Communication

Some clients frequently provide excuses for delays or lack of communication, which are clear warning signs. Pursuing these clients often results in lost time and reduced productivity.

Why It Matters

Poor communication usually signals:

• Late or missed payments
• Disputes over deliverables
• Frustration and wasted time for staff
  
  

How to Handle It

• Set clear expectations upfront.
• Document agreements in writing.
• Give clients a chance to prove themselves—but don’t tolerate repeated delays.
  
  

How MAAIS Helps

MAAIS provides specialist brokerage services for gyms, fitness clubs, and martial arts schools. They help owners identify insurance coverage that protects against client disputes or unpaid obligations. Management liability insurance can cover financial losses resulting from such disputes, offering peace of mind.

If customers can’t communicate clearly from the start, it’s unlikely they’ll improve later.

4. Customers With Payment Irregularities

Even when clients pay, irregular payment methods such as partial payments, dishonoured or post-dated cheques, or payment only with new orders may indicate underlying financial issues and signal potential future problems.

Why It Matters

Payment irregularities can destabilize cash flow, making it difficult to pay staff or suppliers on time.

How to Spot Warning Signs

• Failing to meet agreed credit terms
• Slow account payments
• Requests for extended credit
• Dishonoured cheques
• Disputes over invoices
  
  

How MAAIS Helps

MAAIS reviews insurance and risk strategies to ensure financial exposure is minimized. Their insurance health checks identify gaps in coverage, ensuring client payment failures don’t spiral into financial disasters. By advising on public liability and professional indemnity insurance, MAAIS provides a safety net, letting business owners focus on growth rather than chasing payments.

5. Difficult Customers

Some clients are particularly demanding, frequently complaining, requesting discounts, or insisting on multiple revisions. These customers can consume significant time and staff resources, detracting from service to other clients.

How to Handle It

• Know when to say no to protect time and energy.
• Exit gracefully to maintain professionalism and reputation.
• Ensure lawful termination to avoid disputes or discrimination claims.
  
  

How MAAIS Helps

MAAIS specializes in fitness and martial arts insurance, covering combat sports, CrossFit gyms, and personal trainers. If client disputes escalate, MAAIS can leverage insurance to protect businesses. This includes coverage for event cancellations, property damage, and liability claims, allowing owners to walk away from difficult customers without risking operational stability.

Protecting Businesses

Despite best efforts, some problematic clients may still affect your business. Insurance remains essential for all organizations.

• Public liability insurance: Protects against claims from injury or property damage caused by business operations.
• Product liability insurance: Covers legal costs and compensation claims.
• Event cancellation and equipment insurance: Protects investments even if clients cancel or equipment is damaged.
  
  

How MAAIS Supports Businesses

With decades of experience, MAAIS provides more than insurance products; they offer consultation and advice. They help owners:

• Review policies for gaps or overlaps
• Identify appropriate coverage for blended businesses (e.g., martial arts schools with gyms, cafes, or obstacle courses)
• Access specialist cover for tournaments, seminars, and fitness events
• Protect equipment, studios, and competition prizes

By partnering with MAAIS, business owners can focus on running their operations, confident that their insurance covers all risks.

Final Thoughts

Running a business is not only about generating revenue; it is also about protecting time, energy, and resources. Identifying problematic customers early reduces challenges, though some may still occur.

Key takeaways:

1. Check client credit histories.
2. Use written agreements over verbal deals.
3. Watch for poor communication.
4. Monitor payment irregularities.
5. Don’t tolerate overlap. Take action today by contacting MAAIS Insurance Services to safeguard your business. Their tailored insurance packages for martial arts schools, gyms, fitness studios, and events provide the peace of mind needed to focus on growth.
   
   

Do not wait for issues to develop. Focus on the right clients and partner with MAAIS to ensure your business remains protected and positioned for long-term success.