September 24, 2014

Is It Time to Fire That Client?

There’s a natural lifecycle for any freelancer’s business. When you’re just starting out, you indiscriminately look to attract as many clients as you can to build your business. But inevitably, some clients won’t be the right fit.

fired

Whether it’s an overly-demanding client who’s prone to instant message you any time of day (or night), an indecisive client who’s sole feedback usually entails “that’s not quite it,” or the client who’s perennially slow to pay, some clients just aren’t worth the business. An extension of the Pareto Principle says that 20% of your customers probably account for the majority of your time and trouble.

Most of us strive to avoid conflict and stick with the mantra that clients are good for business. However, staying too long in negative client situations can take a significant toll on your job satisfaction, emotional wellbeing, and business.

If your attempts to actively manage the negative aspects in a client relationship ended up hitting a brick wall, it’s time to cut the cord. Firing someone may not come as easily to you as Donald Trump, but here are some ways to make the process as pain-free and professional as possible:

Take emotion out of the equation: When deciding to fire a client, don’t act rashly from frustration or a bruised ego. Take a few days to consider the situation before acting. Although, if you find yourself going through this process multiple times in a month or year, it’s time to listen to your gut.

Review the contract: Before approaching the client, go through every line of your contract and check for loose ends. If you don’t have a contract, gather any documents you have (including initial emails) that define the project scope and expectations. Make sure you have completely lived up to your obligations. If a client has already paid for certain parts of the project, make sure you have delivered on them. If you’re concerned the client may fail to pay what they owe, consider how to minimize the damage. This could mean waiting until they have paid before telling them your intentions.

Meet face-to-face: As tempting as it may be, firing a client doesn’t mean you just stop answering their emails or calls. Meet your contact face-to-face (or over a phone call if you’re a web-based contractor).

Keep it brief: No doubt you have a billion reasons why you don’t want to continue working with this client, but you only need to offer one. And it can be as simple as, “I no longer think my services are meeting your needs.” The more details you provide, the more you open the door to an argument.

Give sufficient notice: If a client relies on you for regular work, give them time to find a new contractor or vendor. This could be 30 days, the end of a major deliverable, or whatever works in the context of your relationship.

Offer alternatives: Unless the client was disrespectful or a major problem, help them find a new solution by referring a colleague who could meet their needs. If you don’t have a specific person in mind, you can still offer guidance on the type of provider who might be a better fit such as, “Your needs have grown, you may need to consider a full-size agency.” Or, “Why don’t you look for someone who specializes in x.”

At the end of the day, firing a client is never easy. Yet the difficult conversation will be over soon enough and you can move on to more restful nights and bigger and better things.


Fired Photo via Shutterstock

14 Comments ▼

Nellie Akalp


Nellie Akalp Nellie Akalp is CEO of CorpNet, her second incorporation filing service based on her strong passion to assist small business owners and entrepreneurs in starting their business. Free guides, advice and videos on small business legal topics are available at her Small Biz Corner.

14 Reactions

  1. Thanks so much for this, Nellie. It’s a difficult topic, and one we don’t often hear discussed. I think it’s particularly important to always make sure that YOU have a way out of your contracts if down the road, things go bad. Clients always have the option to cancel with notice, etc. after a period of time, but what about YOU, the service provider. I began adding an “escape clause” of sorts to my contracts for this very reason. I haven’t had to use it yet and I hope I never do, but I’d rather know I have the option.

  2. This is a great post, and definitely worth thinking about. A lot of business owners keep a careful eye toward sales alone, and increasing that magic number, but they tend to forget how that balances with employee salaries. If you’re paying people to spend time on one difficult customer when they could be spending that same amount of time on 5 new clients who aren’t as difficult, you’ve got a serious issue.

  3. @Alex – It’s my absolute pleasure and thank YOU so much for reading my post…I am
    glad to know that this is a topic of interest for people. Please feel free
    to reach out with any questions.

    @Sarah – Thanks so much for reading my post and for you great insight. I am glad that I was able to be of service with this contentJ. Please feel free to reach out with any questions.

    :)
    Nellie

    • Nellie, I LOVE the title of this post! Over on Twitter lots of people were having fun with it — because it resonates with those who have clients. Eventually you are going to have a client who simply won’t work out, and you will need a way out. :)

      – Anita

  4. Amen. This is a topic that is WAY under-discussed in small business circles. I think firing clients should happen more often than it does – I think it’s pretty rare. I launched my business three years ago and during that time, I have fired three clients. The first one, I did a bad thing…even though she was a nightmare to deal with, I chose the chicken route and just stopped billing and stopped communicating. VERY unprofessional. BUt as most self-employed people know, we are so very hard on ourselves – I told myself I’d never do that again. The second time was because I learned the client was wrapped up in all kinds of bad stuff – drugs and what have you. I was uncomfortable going to their office, so I separated with a simple email. The last time was interesting… The client and I agreed to meet for a beer and discuss things. We had a really open and honest discussion. He re-hired me with some very strict terms that prevented all the tension that caused me to fire him in the first place.

    Anyway – I’ve learned some important lessons and Nellie, you hit on the most important one: be professional and do what is best for your business.

    Thanks for this…

  5. Interesting read. I always get a little suspicious when business owners in my own industry refer their clients to me, be sure to do your homework :-)

  6. @Harry – I am so glad that this article hit home for you. Im glad that I’ve been of service and took upon wrting this article as I’ver a lot of great feedback. Please feel free to reach out with any questions at any time. Thanks again! – Nellie

  7. @Anita – thanks so much for the shout out. I’m ecstatic with the results of this article and have had a lot of feedback on it. I’m actually thinking of coming up with more topics like this for the future…I have had a couple of my own clients this week that are are on there way out…LOL!!!! Thanks again for all of your support and the continued oppty for writing on SMBT…Hugs and Kisses and looking forward to seeing you soon!J xoxoxo

  8. I would not do a referral – too many people send “referrals” that are problem clients, so in some ways, it’s passing on a problem rather than resolving one. If the receiving business is a cherished partner, what message are you sending to that partner if you send only the “worse” clients?

    Every relationship is not perfect, but I would be careful of being the one who always sends a problem client – that’s not a fair partnership to have. And given the extension of partnerships these days, it’s more critical to vet the situations as best as possible.

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