When to Fire a Client

[KarenB]

I believe there comes a time when one has to fire a client in order to preserve the financial integrity of one's own business and permit it to grow and flourish as it should.

A couple of years ago, as a new virtual assistant (VA), I tended to accept pretty much anything and everything in terms of work. During that initial period of establishing myself, I had a misguided sense of gratitude and/or loyalty to a certain client just because they were with me from the very beginning—before I really got my feet off the ground.

Because this client felt they had offered me mentorship and training in their business while I was green, they also felt that going forward, my work for them should have be done gratis (for free) for the most part. For many, many months, I continued to contribute to their business without any thought to my own business. Their time was valuable—mine was not.

After about a year working with this client, I realized that 90% of my time was being spent on them, yet they only contributed to 10% of my income. That’s when I realized that one must truly recognize and value oneself in terms of how much they contribute to the success of others.

I finally made the decision to stop working with this client. Since then, my business has gone through the roof.

I finally learned that it wasn't actually the client who was holding me back...it was *me* all along.

Karen

[cbscreative]

I suspect almost every business owner goes through this or somethng very similar. The ones that don't are being mentored or learning from others in some way and taking it to heart. Every new business owner needs to be aware of this, so that's a great post.

[KristineS]

I think firing a client is one of the hardest things for a businessperson to do. When you think about it though, it makes a lot of sense. You need to spend your time on the clients who are easiest to work with and who generate the most income.

I think, for a lot of people, the idea of turning money away is scary too. There is probably some concern that firing one client will take away income that may not be able to be replaced. Still, I'd say getting rid of an annoying, time sucking client would be worth a little uncertainty.

[cbscreative]

The other thing that is lacking in situations like this is respect. Clients who treat you this way do not respect you, and worse yet, allowing yourself to be treated this way means you have not gained enough respect for yourself. Without that mutual respect, there will be unending frustration. You will feel used, and they will keep using. Since you cannot be your best under this situation, it's best for both sides to fire the client unless you can establish the necessary respect (which is a tall order if things have gone too far).

[orion_joel]

I believe that this is one of the things that many business owners almost fear to even consider. it comes to a fear that i think especially for small business owners, the thought that all people are potential customers and when someone does become a customer they should not be let go.

This thinking is what i think leads to many people in small business (and to some extent larger business) get to a point of high stress levels. The need to fire clients that either a. take a lot of your time or b. make you little money compared to the time required, are potential for being fired.

There are a number of stories, both on the internet and in books that i have read, that really show how firing some of the most time consuming clients can really give your business so much more then you may think you are losing.

Every business owner that thinks they are spending a large majority of their time on a single client that is not producing a comparitive return on this time invested, should look hard at if keeping that client is going to be a benifit to them.

[GreaterVisibility]

Back when my wife first got into cleaning houses, she had several clients that were very nice and respectful to her. They were hiring her as a professional to take care of the home, and realized that she knew what she was doing and just let her take care of it. She then got one lady that was absolutely just a bad experience to work for. She only wanted her home cleaned every few weeks, and a week after it was cleaned would call to ask if my wife dusted this or that, things that were clearly done initially but after a week or so went by got dusty again. Cleaning something once doesn't keep it forever clean. The lady would tell her that she just didn't feel my wife was spending enough time at her home. My wife would ask her for extra things that she would like done, since the lady could never point to anything being deficient in particular, and the lady couldn't come up with anything.

A couple times when my wife was cleaning she would see other contractors at the home doing painting, or remodeling rooms. They had the same problems, this lady was never happy but couldn't really tell anyone definitively what she really wanted. Everyone was apparently supposed to read her mind. I felt sorry for her poor husband, a really genuinely nice guy that got bossed around by her like a little kid.

That was the first client we ever really had to fire. I told my wife that if the lady was making her feel like she couldn't do anything right and it was an uncomfortable working situation, then get rid of her. We told her that we obviously couldn't meet her needs since she always had a complaint, and that despite our greatest attempts things just didn't seem to be working out. So, she was free to find someone that would meet her needs and we would spare her from having to let us go eventually by doing it for her.

We didn't like losing the money, but no job is worth being disrespected every time you work for that client. There are plenty of jobs out there if you look for them, and people that truly appreciate what you do for them.

[Paul Elliott]

There is only one word for such clients or customers . . . "Next!"

[orion_joel]

GreaterVisibility, this sort of client is what i think turns a lot of people off running a business. They get a client like this, and it really makes them think do i want to have to deal with this, and unfortunetly there are to many people that do not take the inititive like your woife did to fire them as a customer. But rather they either live with the pain of having to deal with it and are miserable in their own business, not wanting to grow for fear of more customers the same, or they close up shop thinking the same thing i dont want more customers like this.

This is truely one of the good examples of when a customer needs to be fired.

[vangogh]

This is a great thread that everyone starting out in business needs to read. I've never really had to fire a client, but I have done something similar.

Like a lot of people in the beginning I felt I had to do anything I could to take on anyone who showed interest in wanting work done. That led me to take on a few people where I greatly under priced myself and often spent 5 hours working to get paid for one. I would also spend long amounts of time writing proposals for people again spending time I generally couldn't recover.

Eventually I realized it was ok and even beneficial to say 'no' to people. Since then I've steered some people away quickly who exhibit all the traits of being a drain on my time without providing much in return and not trying to pursue people who likely weren't planning on hiring me in the first place.

I also raised my prices and early on mention my rates in correspondence. It helps weed out the people not making serious inquiries so I don't have to waste my time pursuing business that wasn't coming.

It was very difficult the first few times I did that because there was the fear in the back of my mind about turning away money and wondering how I'd pay the rent. But since I started turning some people away and since I raised my rates I've made more money.

It allows me to spend more time working with the clients who do appreciate me and provide a return for my business. And it gives me more time to show my appreciation for them by giving them a little work free that I could have charged for. We build a stronger relationship and both sides end up being happier.

[degadar]

There is only one word for such clients or customers . . . "Next!"

I agree - I'm in business for me, so I can enjoy it. The minute a supplier or a customer stops me enjoying it there's only one easy decision to make.

[Paul Elliott]

Because this client felt they had offered me mentorship and training in their business while I was green, they also felt that going forward, my work for them should have be done gratis (for free) for the most part. For many, many months, I continued to contribute to their business without any thought to my own business. Their time was valuable—mine was not.

After about a year working with this client, I realized that 90% of my time was being spent on them, yet they only contributed to 10% of my income. That’s when I realized that one must truly recognize and value oneself in terms of how much they contribute to the success of others.

I finally made the decision to stop working with this client. Since then, my business has gone through the roof.

I finally learned that it wasn't actually the client who was holding me back...it was *me* all along.

Excellent epiphany, Karen.

A good solution for all concerned when you come to that realization is to say something like this--

"Working with you has been a great experience. I really appreciate all you have done for me, and I trust I've returned the the favor in services rendered. I will be completing my service with you as it currently exists at the end of the next 90 days (or whatever you feel is fair). This should give you an adequate chance to replace my services.

If you decide you would like to continue using my services, here are my new terms. Etc., Etc.

Please remember that I pay a 5% finder's fee for any business you refer me."

This gives you the opportunity to thank them, put them on notice that you value your services, possibly more than they do, and expect to be paid full value in the future. It gives them a chance replace you or to join in a new agreement, and invites them to refer you more buiness whether or not they wish to continue your services.

Paul

[Blessed]

I have a client that makes me cringe every time she calls. She too is one of my very first clients and has referred work back to me so I didn't feel comfortable telling her that I wouldn't work for her anymore. She has projects that need done 2 or 3 times a year and I don't have to deal with her much the rest of the year so I simply raise my rates for her in between each six month span of work - now she is paying about 25% more than everyone else and I feel like she is worth the effort.

I was hoping to passively fire her, but ended up keeping her business and the referrals she sends me and now I feel like she pays enough to compensate for the pain in the neck that she is.

[KristineS]

I've heard of a lot of business owners that take the same tack as you Blessed. If a customer is a royal pain in the neck, they get charged more. The extra income helps make up, at least a bit, for the extra stress of dealing with that particular client.

[vangogh]

I've done that with one or two clients myself. When a problem client wants a project I factor in the extra time dealing with them into the project to make it worthwhile.

Fortunately I genuinely like most of my clients. We don't always agree on everything, but I do care about them and want to see them do well and I think they feel the same about me.

What I've mostly learned is how to understand in advance which clients are going to turn into the ones I don't think I'll want to work with later and not take them on in the first place. For me the troublesome ones are mostly the nickel and dimers. The ones that want me to redo my estimate a half dozen times so they can save $5. It's one thing to reevalute a large project. It's another thing to consistently have to send new estimates for something that will only take a few hours.

In the past I did have a client where I spent more time on the estimates than I ever did on the work. The estimates I sent him started getting pricier and pricier very quickly and he's no longer a client.

[Paul Elliott]

I was hoping to passively fire her, but ended up keeping her business and the referrals she sends me and now I feel like she pays enough to compensate for the pain in the neck that she is.

There you go!! Simply see to it that she is "worth it." :D

Paul

[Paul Elliott]

In the past I did have a client where I spent more time on the estimates than I ever did on the work. The estimates I sent him started getting pricier and pricier very quickly and he's no longer a client.

Perhaps a lesson from the premium housing contractors would be helpful.

I know 2 who build upper medium to high-end custom new home contractors. They do not even submit a formal proposal until they have a contract--a binding letter of intent--in hand with the homeowner. This is much like the procedure architects use.

They simply ask the homeowner how much he or she intends on spending--in the ballpark. Then they work up a detailed proposal keeping that final figure as the target.

Their formal proposal offers certain options before finalization. Once finalized, the homeowner is allowed 3-5 changes. Any more than that are charged for at healthy rates.

These contractors have all the business they can manage even in a down market simply because they have the nerve to avoid the trench warfare with the "low bidders" and insist on doing only the highest quality work.

It's called "brand management." "Perception is everything!" (from the free "88" e-course below.)

Paul