3 Red Flags You Have a Nightmare Client — and How to Cut Ties Nightmare clients can make it more difficult to build the business of your dreams. Learn how to spot the top signs early on and end the relationship, here.

For many entrepreneurs trying to start or grow their businesses, signing new clients is cause for celebration.

After all, businesses can't survive without clients, and the odds already aren't stacked in their favor: According to the U.S. Bureau of Labor Statistics, approximately 20% of new businesses fail within their first two years of opening, 45% within the first five years and 65% within the first 10 years.

Related: Don't Let Your Business Be Held Hostage by a Nightmare Client

But not all clients bring equal value to a business relationship — and some are downright nightmares that aren't worth your time.

So how can you spot the difference and set yourself up for success?

Accounting software company FreshBooks recently released its "Bad Clients" report — research that reveals how to spot difficult clients as early as possible to save you and your business a lot of headaches.

Read on to discover FreshBooks' top red flags for nightmare clients and how to deal with them if you determine you've got one (or more) on your hands.

One of the earliest indicators that you have a less-than-ideal client in your midst? When they start "making unreasonable demands," according to 41% of small business owners surveyed.

But an all-around abrasive attitude is also a clear tell: 34% of small business owners said that "meanness" is at the top of their list when it comes to bad client behaviors (and women were 50% more likely to be on the receiving end of it).

Another sure sign is when clients don't pay up on time — particularly for business owners over age 35, who are more likely than their younger peers to cite payment issues as their No. 1 complaint, even above hostile clients.

Related: 3 Customer Nightmares and What I Learned From Them

Fortunately, all hope isn't lost if you find yourself faced with a bad client. You always have the power to sever ties — and that's exactly what 35% of small business owners surveyed did.

Of course, there are a few tips to keep in mind if you go that route, according to FreshBooks:

1. Finish any work in progress, and don't leave a client without adequate notice.
2. Fire a client via email to have the decision in writing and avoid on-the-spot awkwardness.
3. Follow up with a phone call to ensure everyone's on the same page moving forward.

And there you have it: Build the business of your dreams by identifying nightmare clients as soon as possible and terminating the relationship the right way.

But remember, no matter how bad the client is; they will still impact your reputation as a business owner. Like mentioned earlier, always finish up the work that you promised them (unless they are truly impossible to work with) and try to leave on the best terms you can — as early as you can.

The reality is that you will have to face tough clients at various points of your business growth. Avoid them when you can, but if can't, try to learn something from them. Learn to identify the pain points of their experience so that you can save your next client some trouble.