Here are a few good reasons to determine who is an unnecessary client and drop the hammer on them. As obvious as some of them are, many business owners still feel reluctant to do it. Hopefully reading them on this post a few times will make the decision a little easier.
It’s All About the Price- If you have the same “discussion” every time you’re asked to work for a client that revolves around lowering your price or doing free work or something out of scope, drop them like a hot potato. To make yourself feel better, seriously look at how much profit you are making from them. If you know what your prices must be (and I truly hope you do) to break even and also make a profit and you add up all the work you’ve done for them this year, are you actually losing money? If so, your top line revenue will go down by firing them but your profits will actually shoot up and you will free up time to get and work with good clients.
Chronic Late Payers- In a rough economy some clients are going to need a break here and there. But if they don’t ask you for it and just decide to not pay you on time, that’s not a sign of a good relationship. Every day they are late; it costs your business money. Get them on some kind of EFT or autopay setup or get rid of them. They’re not helping you by sticking around.
Complaining, Whining & Insults- If you find yourself cringing or in a foul mood when even hearing the name of a certain client, it may be time to give yourself and employees a break and make it so you never have to hear them again. Some people are just on power trips and like to play mind games. If mutual respect for your business (including you and your employees) is not possible, why put up with it? I would suggest that you try and work out issues if they are a profitable client and it seems you are just not on the same page. But if they cause you a ton of pain, don’t value what you do and don’t make you money, it’s better to free yourself from that hell and use the time wisely to find a good client.
Ethics Issues- For some of you this will sadly ring true and I hope you open your eyes to how bad this is. There are clients that will get a little too comfortable with you and show their true colors by asking you to do something on the dark side (i.e. illegal). Not only should you not entertain them, but run away fast. Anything but a no will not only get you in potential trouble but now they shouldn’t trust you as much as you don’t trust them.
Clash of Standards- Sometimes you will just never be on the same page. It’s their way (which makes your company’s job very difficult) or the highway. I say get on the highway and forget about them. Other times they have such a poorly run business that no matter what they are paying you to do, you just can’t possibly get it done. This is a real problem if delivering managed services or project work as you will lose time and money no matter what. Figure this out fast and if a frank conversation can’t straighten out their ways, you are never going to be able to help them.
In some cases, such as the complainer situation, taking the opportunity to jack your prices to something that will make it all worth the effort actually works out. If they don’t take the new fees, you win. If they do, you win and they might be a lot nicer to you since they took the price hike because now they see your value and what would happen if you leave them.
In other cases, if a non-emotional, fact based conversation will not clear things up, then the talk will end up as a very professional bowing out of the work now or when the contract is over. All depending on the situation.
The key is to be professional as much as possible to avoid a true bridge burning experience. But remember you are running a business and there is no reason to deal with people or businesses that will hinder your success.
Shedding a client is not an easy thing to do. But just like the pain of removing an anchor employee that’s sinking your ship eventually goes away, in the end you, your employees and your business will be much better when that weight is lifted off of your shoulders.
To Your Business Success-
George Sierchio
The Consultant’s Coach
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