How to Fire a Client

Every entrepreneur will eventually fire an employee or severe a relationship with a supplier or vendor. These are the most common scenarios we associate with pink slips and the practice of doing business. However, there’s another we don’t often think about, or, only privately suffer because it’s difficult to own-up to a mistake. In this particular situation, you’ll have to fire a client and it can be very difficult to face. You must consider the financial impact, and, the dynamics [read: pain point] it will unleash on your business in the aftermath. You might be confronted with a negative review, an unpleasant back-and-forth, or even a total disruption of your business workplace.

Ways to Fire a Client

With the new year fast approaching, you’ve probably begun to focus on your personal and professional resolutions. One of them could very well be to purge toxic relationships, which include bad clients. These can be individuals who love to demand rather than delegate, micromanage work to the point there’s no real point someone else does any of it, insists on rushing which compromises quality, or other detrimental behaviors.

When you are just getting started with your business, you’re probably willing to work with any and every client who comes your way. However, not every client is a good one. The emotional, physical, and mental drain caused by a bad client relationship can keep you from enjoying your job and negatively impact the work you do for other clients. At times, the best way to grow your business is to let go of those clients who are holding you back. —Forbes.com

It could be a well paying client who has a penchant to promote pandemonium, one who expects deep discounts but superior work quality, wastes your time without remorse or even any acknowledgement of it. You know who he or she is because you dread any contact and even the sight mention of his or her name is enough to make you cringe. Still, you put-up with their bad conduct because you feel a sense of loyalty.

So, how are to you end such a relationship? Start with some genuine, introspective soul-searching. Is it something that you’re taking offense to that’s more about your personality? Are you contributing to the chaos with your own behavior? If you’re honestly not part of the problem, then try to resolve the situation first. Approach it subtly, but earnestly, and see what happens. If this doesn’t work, there are ways to fire a client and depending on the situation, one will probably be the best solution:

Inform the client you are refocusing your efforts. Every new entrepreneur will accept any type of work when first starting out, even if it’s not a strong-suit. At this early juncture, revenue flow is a top priority. However, it undermines and erodes the relationship over time. Use this to your advantage and explain how you are not serving his or her best interest. Point this out and gracefully bow-out.

Announce to the client you have to raise your rates. Money is a big deal — make no mistake about it. You know it to be true as does the professional who’s always espousing the healthy attributes of professional relationships, giving back to the community, good will, and the like. While those are indeed wonderful things, money is a practical part of business and announcing you’re raising your rates might just be the nudge which sets you free.

Give him or her options for other service providers. Explain you are moving in a direction to serve a specific subset of your clientele. Along with it, give him or her options, recommending different competitors.

Manage his or her expectations by providing actionable steps. Some clients will resist ending the relationship at nearly any cost. They’ll make promises about changing their behavior, bringing you more business, or other saving graces. Since you want to sever the relationship cleanly and permanently, provide a list of actionable steps he or she can take without your assistance.

If you aren’t necessarily dealing with a problem client, just one who is no longer profitable, but still pays on-time and is good-natured, speak with less expensive, alternative service providers and give them the business. This creates a win-win scenario for all parties.

In my past businesses and as a business consultant and coach, I have experience in each of these circumstances with customers and clients. I have found that the best approach is an honest approach with a strong dose of caring and encouragement. So, what customers will you fire or have that crucial conversation with in 2016?

Want to find out about what a business coach can do for you?

[shareaholic app=”follow_buttons” id=”26833294″]

Like this article?

Share on Facebook
Share on Twitter
Share on Linkdin
Share on Pinterest

Related Posts

From Surviving to Dominating

How Waters Business Consulting Group has helped transform many commercial landscape companies into more profitable, scalable businesses Every commercial landscape company eventually hits a moment that defines what happens next. For some, it’s growth outrunning the systems meant to support it. Revenue climbs, but profit doesn’t follow. Labor costs creep up. Cash gets tighter. The owner is working more hours and feeling less in control of the business every month. What used to feel like success starts to feel like an endless string of problems to solve from employees, field operations, customers to cash flow. For others, the challenge shows up faster and with more urgency. Margins have already eroded. Operations are inconsistent from crew to crew. Leadership is stretched too thin. Customers expect more, and the company doesn’t have the structure or financial visibility to respond. In both cases, most owners reach for the same fix: more sales. But more sales don’t automatically fix thin margins; the exacerbate them! With fuzzy accountability, inefficient processes, or an owner who’s become the bottleneck. Usually, what the company actually needs isn’t more revenue. It’s a better business. Waters Business Consulting Group has worked with commercial landscape maintenance and construction companies across the country, including Pleasant Places, Blue Star Landscaping, Genesis Landscape Solutions, Sun Country, and Creative Environments, to find what’s really limiting their performance and build practical paths toward stronger profitability and cash flow, tighter operations, real leadership capacity, and long-term value. Our goal was never just to help these companies survive. It’s to help them build what it takes to lead and increase the the value of their business asset.   Struggling doesn’t always look small Some of the most challenged companies we’ve worked with had real revenue, loyal customers, experienced crews, and a strong reputation in their market. From the outside, everything looked fine. Underneath, the same familiar warning signs kept showing up: revenue growing while profit stayed flat, the owner still involved in nearly every major decision, labor costs nobody could quite explain, crews performing inconsistently from job to job, estimates that didn’t reflect what jobs actually cost, financial reports arriving too late to act on, managers held accountable for results they had no real authority over, cash flow swinging unpredictably, and roles and processes that were never clearly defined in the first place. These problems rarely show up alone. A bad estimate turns into a margin problem and project losses. A margin problem turns into a cash-flow problem. Weak reporting means leadership doesn’t catch it until the financial damage is already real. And without a capable leadership team in place, the owner becomes the answer to every question and the fix for every problem. Over time, the business ends up running on effort instead of systems. Our approach starts by understanding how these challenges connect to each other, then figuring out which changes are actually likely to move the needle in a lasting way … in the same way we moved the needle for Pleasant Places Landscape, Blue Star Landscaping, Genesis Landscape Solutions, Sun Country, and Creative Environments.   Clarity comes before transformation You can’t fix a business you can’t see clearly. That’s why we look past the top-line revenue number and into the operational, financial, and organizational factors actually driving performance: profitability by customer, contract, or service line; labor efficiency and crew productivity; how accurate the estimating really is; direct costs and overhead; pricing strategy; cash flow and forecasting; org structure; leadership capacity; roles and accountability; the sales pipeline; operational processes; and how dependent the business is on the owner. We’re not trying to hand leadership another binder of reports. We’re trying to find the small handful of constraints actually driving performance, the levers, so leaders can stop treating symptoms and start fixing what’s underneath them. Pleasant Places: turning rapid growth into stronger profit Pleasant Places was already a real success story by the time the company partnered with us. Founded in 1984, this commercial landscaping company had grown fast, taking annual revenue from roughly $10 million to nearly $18 million in just two years. But that pace of growth had created its own problems. Margins were under pressure, processes and procedures needed real work, accountability was inconsistent from department to department, and the organization simply didn’t have the infrastructure to operate efficiently at its new size. We worked with the Pleasant Places leadership team to strengthen the financial, operational, and organizational foundation underneath all that growth. That meant digging into historical financial trends and building a model to evaluate cost of goods sold, margins, and breakeven performance; putting systems in place to track labor hours and materials against estimates; refining pricing to hit target gross margins; implementing real purchasing controls; identifying gaps in leadership and org structure; clarifying roles, responsibilities, and who reported to whom; supporting a management transition from father to son; establishing real performance metrics; and researching and implementing an ERP system to give the company far better operational visibility. The results speak for themselves. Pleasant Places gained real visibility into projected revenue, gross margins, profitability, and cash flow. Pricing discipline, tighter labor and material cost controls, and real leadership accountability helped push gross margins up from low 20’s to an average of 42%. Revenue grew past $35 million, and the company came out the other side with a stronger leadership structure, clearer expectations, and a healthier culture. The lesson here is simple: growth gets a lot more sustainable when financial discipline, operational systems, leadership accountability, and org structure grow right alongside revenue instead of trailing behind it. Blue Star Landscaping: building profitable growth, and a successful exit Blue Star Landscaping came to us with a different set of problems. The company needed to improve profitability, tighten up its pricing, get real control over labor and material costs, develop its leadership bench, and build a clear plan for growth. The team had solid industry experience, but they needed a more disciplined way to connect strategic growth to financial forecasting, pricing, cost control, and actual profitability. We worked with Blue Star

Read More »

How Small Business Owners Can Effectively Navigate Government Bureaucracies

For small business owners, dealing with government bureaucracies can often be a daunting task. Navigating complex regulations, paperwork, and procedures can consume valuable time and resources. However, with a strategic approach and the right knowledge, small business owners can effectively navigate government bureaucracies and ensure compliance while minimizing administrative burdens. How Small Business Owners Can Effectively Navigate Government Bureaucracies With this in mind, the following article will provide a detailed guide on how small business owners can tackle government bureaucracies efficiently and effectively so they can spend more time doing what’s most important – growing their organizations. Now, let’s get it to, starting with acquiring a firm grip on the applicable rules. Understand Applicable Regulations The first step in navigating government bureaucracies is to understand the specific regulations that apply to your business. Identify the relevant government agencies and familiarize yourself with their mandates, rules, and procedures. This will help you gain clarity on the requirements and expectations set forth by the government, enabling you to comply with them effectively. Seek Expert Advice Government regulations can be complex, and seeking expert advice is crucial to navigate them successfully. Consider consulting professionals such as attorneys, accountants, or a business coach with extensive experience. They can help you understand the legal framework, interpret regulations, and guide you through the bureaucratic processes. Establish Clear Internal Processes Create internal processes and systems within your business to streamline compliance with government requirements. This includes maintaining accurate records, filing necessary reports, and ensuring timely payment of taxes and fees. By organizing your business operations, you can reduce the risk of non-compliance and simplify interactions with government agencies. Utilize Government Resources Government agencies often provide resources, guidelines, and tools to help small businesses understand and comply with regulations. Visit agency websites, attend seminars or webinars, and explore available publications or guides. Take advantage of these resources to gain insights into the regulatory landscape and the specific requirements for your business. Maintain Open Communication Building relationships and maintaining open lines of communication with government officials can be invaluable. Reach out to the appropriate agency contacts and establish connections. Seek clarification on regulations, request assistance when needed, and proactively address any compliance concerns. Regular communication can foster a cooperative relationship with government representatives, making it easier to navigate bureaucracies. Be Proactive in Compliance Proactive compliance is key to minimizing bureaucratic hurdles. Stay up to date with regulatory changes that may affect your business, and make necessary adjustments promptly. Regularly review your business operations to ensure compliance with current regulations. By taking a proactive approach, you can mitigate potential issues before they escalate and avoid unnecessary bureaucratic entanglements. Utilize Technology and Automation Leverage technology and automation tools to simplify administrative tasks and streamline compliance processes. Invest in accounting software, record-keeping systems, and compliance management tools that align with your business needs. Automation can save time, reduce errors, and provide an efficient way to manage regulatory obligations. Engage in Advocacy Joining industry associations or business networks can amplify your voice and provide collective advocacy on regulatory matters. Collaborate with other small business owners facing similar challenges and work together to advocate for regulatory reforms that promote entrepreneurship and reduce bureaucratic burdens. Participate in public consultations and provide feedback on proposed regulations to influence policymaking. Seek Assistance from Small Business Support Organizations There are numerous organizations that offer support and resources specifically tailored to small business owners. Chambers of Commerce, Small Business Development Centers (SBDCs), and other trade associations can provide guidance on navigating government bureaucracies, offer training programs, and connect you with other entrepreneurs who have successfully dealt with similar challenges. While government bureaucracies may appear overwhelming, small business owners can effectively navigate them with the right strategies. By understanding regulations, seeking expert advice, establishing internal processes, utilizing resources, maintaining open communication, being proactive, leveraging technology, engaging in advocacy, and seeking assistance from support organizations, small business owners can overcome bureaucratic hurdles and focus on running their businesses successfully. Remember, navigating government bureaucracies is a continuous process, and staying informed and proactive is essential for long-term success. So, what other advice would you give small business owners who are dealing with government bureaucracies? Please take a few moments to share your experiences or approaches so that others can benefit from your perspective! Interested in learning more about business? Then just visit Waters Business Consulting Group to learn more about us and the services we offer.

Read More »

Imagine Selling Your Business…

How Would Your Life Change?

You didn’t start your business just to stay busy—you built it to create freedom, security, and options for yourself and your family. Selling your business can be life-changing, but the real question is whether you’re intentionally building toward that outcome or simply leaving it to chance.

Sign up below for a free consultative session to learn what your business could be worth today and in the future! 

Thank you for your interest in learning what your business is worth. We will be in touch shortly.