Take the example of a small web company that discovered their client had pulled the rug - or in this case the business name - right out from under them.

"ABC Services" [pseudonym] signed a contract under its business name. Since there was no "Inc.", "Ltd." or other corporate marker to indicate that this was a corporation, the web firm thought they were dealing with a sole proprietorship or partnership, which would make the owners personally responsible for the debt.

When bill payments began to slide and collection proceedures began, the web firm was suprised to discover that the name "ABC Services" had actually been registered to an numbered Ontario corporation. What's more, using a shell-game tactic, the shareholder of the corporation deregistred the name, only to have a close relative register it a few weeks later to a different numbered corporation.

The business kept operating for the entire time under the same name, but the new shareholder claimed that all debts were the responsibility of the original corporation, which had been left as bankrupt.

ABC Services' responses to normal collection proceedures were, to put it lightly, less than respectful.

Bullying took the form of talking down to the web firm's employees, using a loud voice to overpower people in discussions and trying to force the web company to make significant cuts to its bills. Threats were also thrown around, like "If you try to take this to small claims court I will make sure to tie you up in court for years and you will never get anything." The client even claimed that shutting down a web hosting account for non-payment was illegal.

In the end the web firm settled the account for a small reduction of its fee to avoid the time, stress and cost of going to court. The unfortunate reality when dealing with these extremes of behaviour is that is is often less costly to find a way to extract your company from the situation than to fight for every penny you are owed.

Not all bullies use direct aggression

Business bullies come in many forms.

Some might be fairly pleasant in their interactions with you, but use passive manipulative tactics to try to get more than they are paying for. This may be intentional, but in extreme cases it is core to the person's personality.

For example, some clients will pretend that they did not understand what they had purchased. They point blame at vendors and try to use this burden of responsibility to get more than what they paid for or to reduce their final bill.

Others may be the most ridiculing, sarcastic or aggressive people you have ever encountered, yet give you no problems when it comes time to settle outstanding debts.

The real gems are those who are a combination of both: they are rude and unpleasant and collecting payment from them is like pulling teeth.

As a small business, you need to be able to protect yourself against such clients in the case that you cross paths with them. But how can you do this?

Behavioural strategies for managing bullies

Margaret Ross (http://kamaron.org/blog) is a workplace and education relationship expert, president of the Kamaron Institute and an award winning author and television host.. She has written extensively on workplace and business bullying.

"Sometimes what happens to the bully that was on the playground or on the school bus with you when you were 12, some of them socialize very well, and others are sitting across the conference table from you," says Ross.

"These kinds of behaviour have worked for them, and so they still do them. It's almost no more complicated than that."

Even though we would rather avoid taking on clients who exhibit these behavioural tendencies, turning down a potentially lucrative opportunity in a competitive market doesn't make sense economically. Ross believes that because you will likely have to deal with client bullies as a small business, it is important to be able to adjust how you react to them.

"If you've been in business for more than two years, chances are you've already had to face a client bully. What can you do about them? Not a whole lot. But you can sure change the way you react to them."

Fighting fire with diplomacy

According to Ross, the majority of people who have encounters with client bullies tend to react in one of three ways:

1. Fight: Fighters are people who "fight fire with fire." If the client yells, they yell.
   
2. Freeze: People who freeze are those who will disengage when confronting a client bully.
   
3. Flight: People who flee are those who instead of facing the confrontation will give in and become submissive. This doesn't mean they physically flee the room, but emotionally that's what they are doing.

Any of these three natural reactions are unhealthy, says Ross. They do nothing to improve the business relationship or change how encounters might transpire in the future. Rather than succumbing to one of these three reactions, we need to learn to adapt behaviourally.

"What we need is the necessary behavioural skills to deal with [client bullies]. We need to adjust what's in our behaviour."

How to adjust your behaviour

Controlling the instinct to fight
Because fighters tend to become defensive and match the aggression and emotion of the person they are confronting, if you fall under this category then adjusting your behaviour requires a fair amount of self- control.

"If you're the kind of person who if a client is going to be aggressive and yell, you're going to yell right back...it's best if you say to yourself: 'OK, how can I have a calm demeanour this time?' It's about what we want to accomplish rather than what we think about the client's personality," says Ross.

"If you're a fighter, you want to de-escalate the situation: that's you're number one goal. You want to de-escalate the emotions to get the conversation back on track. Bring it down a notch, bring it down ten degrees, and focus the conversation back to whatever it's supposed to be about."

Controlling the instinct to freeze
People who tend to have this reaction will often times completely disengage, which Ross says doesn't accomplish anything. If you disengage when facing a client who is a bully, the way they interact with you will never change.

"You just kind of sit there, thinking about something else and hoping that they go away soon. You might be sitting there taking notes going 'uh-huh, uh-huh' but you're really not paying attention. You can't do that," says Ross.

"If you freeze, they're never going to change on you. You need to stay engaged and try to keep everyone focused on what needs to be done instead of turning things into a mudslinging session."

Controlling the instinct to flee
People who flee will often have a very difficult time with clients who are bullies, particularly because they tend to submit rather than confront conflict. If you fit into this category, preparedness is key.

"If you know that the client is likely to try and start a conflict, you can take steps to diffuse the situation before it even occurs," says Ross. "If you tend to flee, you have to decide in advance that you're not going to roll over and give in."

Like those who freeze, flight people need to stay engaged and focused. But they also have to move beyond past behaviours and encounters with the client and commit to moving forward.

"All you are going to deal with is whatever the item, issue or behaviour is today. That's all that exists. You need to ask yourself, 'how can we move forward.'"

Perhaps the most pivotal thing for this type, however, is to not condone the client's behaviour by submitting.

"You can't condone their dramatics. Don't buy into the yelling, the aggressiveness, the posturing. If they are interrupting you, say 'please let me finish what I'm saying' or 'let me recap where we are on solving this issue,'" says Ross.

"If you're a flee person you have to work this all out with the back of a mirror before it happens again. That's really important. You have to do it all in advance because when their voice is raised either over the phone or across the table from you, you absolutely have to know what you're going to say."

Ross concedes that adjusting your behaviour to better deal with client bullies is no easy task. It is likely that you're going to experience resistance from the bully as you attempt to change your behaviour, but if you continue to stay committed and react consistently, they will eventually have no choice but to accept it.

This is the first half of a two-part article on bullies in business. Part 2, which will look at how to manage bullies from a legal standpoint, will be published in our October issue.