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Firing Your Clients – Part 1: 5 Signs That it is Time to Part Ways January 30, 2013Business Tips1 Comment

For small business owners it can be a very difficult psychological process letting a client go – after all, they are our lifeblood and allow us to stay in business. We feel obligated to provide services for our clients. If Joe wants to buy from us, we must deliver. It is easy to fall into a mentality that you must do business with anyone who is interested. This can be a catastrophic mistake for some, as an unfortunate friend of mine found out when he was sued recently!

But how do you know when it is time to part ways with one of your clients? And how do you tell them you no longer want their business?

If any of your clients is exhibiting any of the following behaviors it can be a deal-breaker:

1. They Pay Late or Not at All

This one can be very tricky, as a client can be delinquent on payment for a number of reasons. If you own a service-based business where your client is expected to pay a percentage (or, heaven-forbid, the full amount) at the end of the project you can run into a lot of trouble here.

In general, someone who consistently pays a bit late can be far better in the long run than a client who pays extremely late or not at all just one time. This is because with someone who is habitually tardy, though far from ideal, you know you are getting paid for your work. Sure, you might need to break a few kneecaps to see the money by the due date, but you aren’t getting stiffed.

I like to use the rule of “two” here. I give my clients two chances.

If they are significantly late one time but they do eventually pay me, I will talk with them about it, try to find out what happened, and usually will give them another chance. If they are extremely late again it is usually worth letting them go.

If a client stiffs me entirely they are no longer welcome to do business with my company, and in certain circumstances I will reverse the work I performed for them if it is on the web. (For freelance web designers/developers/software engineers: be careful in this situation – sometimes you can get in a lot of legal trouble for taking a website or product offline without permission. Make sure there are clauses in your contracts!)

2. They Call You All the Damn Time

It is completely understandable when a client is learning the ropes of your product or service that they might be a bit confused and have some questions. It is also within the realm of “normal” when a client has small requests here and there, such as that you send them more of those awesome bubble-wrap containers that you used to ship their decorative eggs. For a fee of course.

What is not understandable is when they call you at 1:00 in the morning on your home line asking why their website is slow. Or when they send you 21 e-mails throughout the morning demanding that you used the wrong paint color on their basement walls and sent the wrong guy in to do the work.

Some contact from your clients is expected. This is a huge reason why running a service-based business is a demanding process – we are expected to be available for our clients’ many needs. However, there is a happy medium. If you find that your client is asking the same questions over and over despite your answers, that they are calling you routinely after business hours and/or they are flooding your inbox at all hours of the day it is perfectly acceptable to refer them elsewhere. This is especially true if you have many other clients that are far less demanding of your time.

3. They Don’t Understand the Meaning of the Word “No”

Some people are unbelievably demanding.

They feel that they are above others, and that the rules and policies you set do not apply to their situation. These are the clients that will ask you for a free chocolate ice cream cone in addition to the three vanilla cones they purchased because you were running a buy 3 get 1 free special four weeks ago and they just read the calendar upside down.

Sure, people make mistakes. And to stay in business you will want to give your clients a bit of leeway – I like to give my “elite” clients some perks. If I’ve been working with someone for a long time I will often comp them an hour of work, or give them a free 15-minute tutorial on how to use a new website widget. This is because I have a long-time relationship with them and I value their business.

I don’t value the business of a client I have barely worked with who refuses to listen to my company policies and makes unreasonable demands.

And if you ever have someone tell you that they are going to write a complaint about you because you aren’t giving in to their unreasonable demands, not only is this a deal-breaker but you can actually sue them for slander if they make good on their threat.

Good times 🙂

4. They are Nasty, Mean, Rude and/or Just Make You Uncomfortable

There is never, and I repeat, never a good reason for a client to call you names, yell at you or threaten you. This type of abuse should be grounds for immediate firing of a client, even if it only happens once. If someone is having a bad day, barks at you over the phone for 5 minutes, and then later on apologizes and explains that they were just having a bad day and missed a dose of their meds, is this really someone you want to do business with in the future?

Nobody is twisting your arm forcing you to keep a client like this. But your mean client sure as heck is twisting yours.

5. Their Business is Less-Than-Reputable

I make it a strict policy never to work with a client who is engaging in business practices that are questionable. This includes potential plagiarism, stealing others’ ideas, illegal activities, questionable products and other potentially destructive practices which could make me on the hook as well if my client was ever prosecuted.

This is often a gray area and is very difficult to know when to walk away, but I always err on the side of caution.

If you are not sure exactly what type of business your client runs but you have even an inkling that what they are doing is potentially illegal or fits into one of the categories above, get out while you can. Just tell your potential client that you are not available to work within that industry and wish them the best.

You will sleep much, much better for it.

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