When Is It Time to Fire a Client?

If you’re an entrepreneur, I know you’ve had to do hard things for your business and one of those hard things might have been firing a client.  

Maybe they were always late paying their bills (if they paid at all)...

Maybe they were hard on your staff..

Or maybe you just grew tired of how your stomach would flip whenever you’d see their name pop up in your Inbox.

Whatever the reason, if you own a business, I know you’ve dealt with a challenging client.

So, what’s the fix, you ask?  Well, there really isn’t one definitive answer.  

Client relationship management is far more of an art than a science.  

But when you’re at the point where you’re ready to fire a client, it is an excellent opportunity to do some big picture, strategic thinking:

1- Who do I actually enjoy working with? Get really specific here. Hint: it’s probably the opposite of the person you just fired.

And then ask yourself: 

2- What would I need to change in my marketing, positioning, pricing, boundaries, or referral network to attract more of those people instead?

It’s a super simple exercise, but I’ve seen it work, time and time again:

A business owner gets clear on who they really want to work with, they clean house and get rid of the less-than-ideal “C” and “D” clients, there’s a bit of a cash flow dip, and then eventually revenue recovers - often with fewer clients, but better margins, smoother operations, fewer AR issues, and significantly less day-to-day stress on the entire team.

In my experience, problem clients are rarely just an interpersonal issue… they’re usually operationally expensive too.  As the saying goes - 5% of your clients cause 95% of your headaches.

And often, those 5% clients quietly (or not so quietly) consume the energy you actually need to serve your best clients really well.

This has been true in my practice too.  As someone just coming up on the 5 year mark of running my own firm (and 16 years as a CPA!), I’ve drastically improved my client screening process over the years.  

Now, my clients are people I genuinely enjoy working with, they're respectful towards me and my collaborators, and project invoices are paid on time and in full.  

That’s not always been the case, but it sure is now.  I’ve absolutely had to part ways with some clients because the operational and emotional cost simply outweighed the incremental revenue.  It hurt in the short term - for sure - but it was absolutely the best decision for me and my business.

Sometimes the best move an owner can make isn’t chasing a shiny new client: it’s letting the wrong ones go.  

And over time, I’ve found that the quality of my clients has an enormous impact on the quality of my business and my life.