Break the chains

Dreamstime.com

Firing a client is one of the most difficult decisions a business owner will ever make. And when push comes to shove, few actually do the deed. Firing clients goes against everything a business owner knows. Clients keep the business going. Clients put food on the table. Clients spread the word and bring in more clients. So, when you consider firing one, it feels like you’re purposely harming your business. It’s a hard, uncomfortable conversation to have. And that’s why so many business owners never do it. They just hope the bad clients will eventually go away.

But bad clients hurt your company a lot more than they help it. And often, getting rid of them frees you up to do so much more productive work toward building your business, and cutting that one terrible client loose means you can bring in several other better clients.

Here are six rules to follow when firing a client:

Firing a client should not be a quick decision. If you’re angry, cool off before you even think about having this kind of conversation. And when you do it, avoid using the words, “You’re fired.” Create a plan, including what you’re going to say. Think about when it’s best to do it (will a project be coming to an end soon?), where it’s best to do it (should you go to them or meet in a neutral location?), and how it’s best to do it (what will you say?). Then do it quickly, succinctly, and move along.

Choose a new client. Then, sit your old client down and say, “We’ve recently begun work with a new client and due to time constraints will no longer be able to continue our work with you. We recommend that you reach out to [insert competitor].”

Explain that you’re taking the business in a different direction, and as a result, you’re transitioning away from certain projects. Bring any projects you have with them to a closing point and then opt not to renew the contract.

If you can, give them a time frame. For example, “In three weeks, Project X will be complete. At that point, we must devote our time to other clients. We wanted to let you know now so that you’ll have plenty of time to find another vendor.”

If a relationship with a client has been especially contentious, the best route may be directness. You might say, “I think you’ll agree that our working relationship has become strained. I don’t feel that my company can satisfy you. As such, I believe it is best if we cut ties. [Insert competitor] provides similar services to ours. I recommend that you reach out to them for your ongoing needs.”

Clearly state how you’ll be bringing your work together to a close. If any of these details are unclear, you run the risk of drawing the separation process out, which won’t be pleasant for you or your client. Tell them what duties you’ll fulfill and give them a hard end date. Meet those fulfillments and stick to your deadline.

It’s not uncommon for bad clients to suddenly realize just how wonderful you are as you’re showing them the door. They might start to promise that this time they’ll really change, offer to pay more, give you a bigger chunk of their business, and on and on. Don’t give in. Let them go and focus your time on clients who appreciate you and your company from the get-go.

Michael Houlihan and Bonnie Harvey are coauthors of The Entrepreneurial Culture: 23 Ways to Engage and Empower Your People and The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. For more: www.TheBarefootSpirit.com and www.TheBrandAuthority.net.