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Many small business owners—especially those just starting out—find it difficult to take the plunge and fire a client that may not be working out as expected. And in this economy, it’s even more difficult to swallow the idea of letting go of revenue.
But sometimes it’s absolutely necessary to part ways, for both your sanity and your bottom line.
1. There’s constant pressure to cut costs.
Laura Posey, CEO of Dancing Elephants Achievement Group, a sales consulting and training firm in Richmond, Va., drives a hard line when it comes to cutting costs. “Occasionally clients ask for reduced prices. I’m happy to comply in exchange for reduced services,” she says. “I let them know my prices are firm and we’re worth every cent.” She may refer clients to lower-cost providers, but won’t sacrifice her own services.
2. The client no longer fits your target market or objectives.
Businesses inevitably grow and change—yours will, and so will your clients’. But if a client no longer fits into your business model, it may be time to move on, says Alistair Leyland of Toronto business consulting firm Silver Lining Ltd. “Some of our clients grow rapidly and still want to stay on as clients. But their business needs at $2 million-plus are different than at $100,000 to $2 million,” he says.
3. The client doesn’t respect you.
Suzanne Meyer of The Welcome Committee, a local advertising service in Mooresville, N.C., has fired three clients for the same reason: “These clients would call my sales staff on their cell phones late in the evenings, on weekends, even during one of their daughter’s ‘sweet 16’ birthday parties on a Saturday night,” she says. “They had no respect for my staff’s personal life or mine.” The clients were let go for refusing to be more respectful after friendly reminders and formal warnings.
4. Your advice is continuously ignored.
Rob Bedell of Santa Monica, Calif.-based Bedell Media & Consulting was hired by a grocery store to help it attract shoppers. “The store had only used coupon ads in the past. I developed different campaigns for them, all of which they said ‘no’ to,” he says. “I finally figured out they wanted to use what they’d always used, but get different results. It cost me more in production than I was getting from them, so I cancelled our agreement.”
5. The scope of work and client goals are a moving target.
As sole proprietor of More Than 925, a virtual administrative support provider in Vancouver, Phyllis Murphy has said goodbye to a client that kept moving goal lines. “It seemed every time we talked about the job, additional paperwork was required to satisfy the client. But the client expected that all this extra paperwork would not be billed to them,” she says. The client was upset when Murphy cut ties, but she has never regretted the decision.
Related Resources: Top 5 Reasons to Pass on a New Business Opportunity and How to Deal with Difficult Customers.