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When to Fire a Client and How to Do It with Integrity

Ever had an indecisive client who doesn’t know what they want? Ever had a bullying client, or one who doesn’t get you the information you need on time? Or maybe you’ve changed. Have you outgrown your clients? Maybe some of them aren’t a good fit for your business model anymore. What do you do when this happens? What are the right reasons, and the wrong reasons, for firing a client? 

My first bookkeeper fired me! He let me go because he got so busy it only made sense for him to work with large businesses who paid him thousands of dollars a month. He couldn’t keep doing my small new business’s simple bookkeeping for me at a $100 a month. It wasn’t where his business was going. Yet, when we ended our business relationship, it was a positive experience because we did it for all the right reasons. 

Good reasons to fire a client 

Ever had a client who doesn’t pay, or doesn’t pay on time—even if they do, eventually? Don’t pay the price for a poor paying client.

What about clients who treat your staff poorly? No client is worth losing your own staff over. I’m speaking with someone I may hire for my team. She’s leaving her job because the business owner won’t address an issue that has come up with a co-worker. How people look after people matters.

What about when project timelines blow out because the client is disorganized or indecisive? Sometimes this happens when there are misaligned goals and different ideas about how to get there.

Ever heard of the PITA factor? (Stands for pain-in-the… you get the idea!) In some situations, you just don’t seem to be able to do anything right, the client isn’t responding well, or seems reluctant to get on board with your advice.

And what if you’re turning away profitable, higher-priced work because you’re at capacity with legacy, albeit lovely, clients?

If you’ve tried everything, yet working with a client remains difficult, unproductive, or unprofitable—even when they are very nice people—it may be time to reassess your future working relationship.

Benefits of firing clients

Firing clients enables you to open up space for potential new clients. These clients may be more aligned with your business direction, better payers, easier to work with. 

Intentionally managing your client base enables you to keep levelling up. It forces you to curate your client list to suit what you do and choose the types of people you want to work with.

Working with the right clients means you’re far more likely to enjoy your work, stay in it for the long term, and grow a successful business.

Working with better clients affects your whole life, make no mistake about it. Imagine the peace of mind you’ll regain once you let go of THAT client…

What prevents us from firing clients?

Money, right? Often, we stick with the client because they’re paying us and it’s an important revenue source right now. In fact, firing a client is a pretty serious leap, and it’s not the step to jump to the minute any kind of conflict arises.

So yes, it’s better to resolve any issues if you can. Try to work out any personality conflicts. Try to reset expectations and get the relationship going in the right direction. Firing is the last resort.

Ask yourself whether you have a challenging project or a challenging client? How can you work through the issues? Can you reset expectations, have honest conversations, and wipe the slate clean?

And when you realize working with this client is not the best use of your time and you have a gut feeling that this just isn’t a fit? Now you’re looking at a more permanent alternative outcome. So, are you willing to do the hard thing?

What are early warning signs to watch out for? 

It’s easy to overlook red flags at the beginning of a relationship. Yet ignoring them increases the chance of failure down the track. Some red flags to look out for with potential clients include:

  • Looking for discounts right away and/or having an unfeasibly low budget
  • Unrealistic expectations around what you can do for them
  • Speaking ill of  vendors they’ve worked with before (how might they talk about you in the future?)
  • Not following through on agreed actions about next steps
  • High maintenance behaviors, e.g., not respecting boundaries

Have a strong and focused marketing and sales process in place to attract the right clients. And before you work with a new client, look out for some of the telltale warning signs early on. Ignore them at your peril.

Firing with respect

Sometimes, though, you really do just have to fire the client and this can always be done respectfully. Rather than saying:

“This relationship isn’t working out.”

Instead, say:

“We don't seem to be able to provide what you’re looking for. Maybe it’s time you find another vendor better suited to your needs.”

Avoid getting into the why, how, and ‘who did what’ as that could become a fight. For your own sake, maintain a file of documentation of what happened, but you don’t need to lay it all out and explain it all in great detail unless they ask. 

Ideally, this conversation happens in person, and if that’s not possible, at least address it in a respectful phone call. If the discussion could get heated or emotional, then sometimes it can be better to articulate your decision in writing instead. Use your judgment.

Follow up with a letter or email confirming what you discussed. If you can, express appreciation for something positive in the relationship. Include clear steps and timelines about what happens next. This provides clarity to all involved, and it provides a useful paper trail. It means everyone has the same record about what you agree to do.

You may be tempted to give a white lie about changing niche, business model, or offering. Be careful about twisting the truth, even if it is to protect people’s feelings. If you can’t back up what you’re telling them, it could harm your business down the track. Provide a legitimate reason with care, courtesy, and professionalism. Then move on.

Key takeaways

When your gut is saying it’s wrong and you know it’s not going to work out in the long term, don’t drag out a flailing client relationship. Ignoring the issues and doing nothing won’t serve you or your business well into the future. 

Be prepared by having a solid process in place to deal with clients you need to move away from.

Just because you don’t have a business fit anymore doesn’t mean you hate each other. Stay on good terms, but let each of you find a better future for each of your businesses. It’s not personal, it’s business! 

Want more guidance around processes and support for your business?

You don’t have to figure out business dilemmas like this by yourself. If you’re interested in learning more about implementing good business practices and systems, I can coach you through my signature process. Grow your business for long-term success with custom one-on-one support.

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