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1 In Service Business/ Startup Life

Breaking Up With Bad Clients

Breaking Up With Bad Clients

I saved the best for last in this series regarding clients in service based small businesses. How does one deal with the dreaded break up with bad clients. This is such a tough subject matter that most refrain from discussing because you are either aggressive, passive aggressive or passive when it happens.

As a business owner your sanity matters more than your company bottom line, at times. Not all clients are going to be perfect for your company. That means you need to fire them but make it a win-win situation, if possible, like Stephen Covey talks about in “7 Habits of Highly Effective People”. 

Reason Why You Are Firing Them

This is an extremely important aspect of firing the client. Write out all the reasons why you want to fire them? Reasons such as, they are a nightmare or I don’t like her boyfriend, are not justifiable reasons to fire someone as a client. However, they are on revision 18 of the project, don’t want to pay the next fee in the schedule, or lacking communication about their vision are some good reasons. These reasons must be expounded in the letter. You will need to explain to your client that these are the reasons outlined why you can no longer work with them on said projects.

Review Contracts With Client

When you signed the client on did you put a contract in place? Amy discussed in Contracts … The Sticky Parts the importance of having one and the “kill fee” written in it for you and your clients benefit. So many business owners do not think about having contracts. They just take people at their word. I use to be one of those people when it came to business. Now, I do contracts, deposit schedules, and much more. Basically I got questions that need to be answered before I give over a dime of my money. If you have a contract in place, what does it say about terminating a project on your end? Are you liable on your part for anything? Do you have to give an explanation, reason, or notice? If you don’t have a standard contract in place create one now. Yes, it will cost you but you can use it for years to come with minor adjustments.

Communication With Client

Time for the hard part for some people and the easy part for others. Here are the steps you need to take before contact with the client occurs:

  • List of reasons why you are firing the client
  • Documentation of these reasons
  • Contracts {if you have one in place}
  • Alternative options for them
  • An open mind and attitude

These are five things you truly need to have in place before you make initial contact with them. As for the conversation it needs to take place in person, if possible. If that cannot happen schedule a Skype session or phone session. Breathe when you get to the big day of having this talk. You need to go in their focused and stand your ground.

  • Better Communication Rules
  • A different fee schedule
  • Referrals to other companies
  • Their service completed to this point

You want to present this in the best way possible. It is a better way to end a relationship vs saying you suck as a client and you’re fired. You want to end this relationship on a positive note. This might not have been the right time for them. Believe or not clients have bad days that effect them too. Be mindful of this and open.

Personally, I have had to fire clients since launching. It is not an easy thing to do and people can be very rude and harsh. Stand your ground especially if you believe it is a toxic relationship spiraling out of control.

Have you had to fire a client? What did you do and how did the client take it?

Parts 1-3: How To Win Clients and Influence ThemPlaying For Keeps With Clients & Winning Clients From The Past

SATC Imagery  // cc

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