When and How to Fire a Client

Businesses need clients to stay operational. That’s obvious—but what isn’t obvious is what to do when clients cost more resources than they bring in, or what to do if a client is so challenging to work with that you’re not confident they’re worth the money they bring in.

When you have a client that takes up more time than your other clients, demands more work than what was agreed upon for no extra pay, or isn’t living up to their responsibilities but blame you for poor performance, it’s time to consider letting them go.

You must make sure you can legally do so, or you might end up paying fees for breach of contract. If you don’t have a contract, it’s easier to fire them, but if you want their business, a contract will prevent murky situations and is highly recommended.

There’s also a chance they’ll negatively affect your reputation, costing you more business in the long run. Here are some tips to mitigate the damage, or even end your business relationship amicably.

Tips to End Business With a Client Amicably

Set Clear Expectations

The first step is to set clear expectations as to your business agreement. If you’re publishing content for them, they might get one free revision that they have to sign off on before publishing. If they request any additional revision, you can ask them for additional funds for that task since that’s an extra service.

Explain that you’ve met your obligation and they accepted the initial work. If they insist you make further revisions, you need to insist on charging more.

If you need access to certain information or system login credentials to provide service, but they haven’t given you what you need, you’ll need to be clear that you can’t do anything for them until they provide what you need. Don’t let them blame you for this either. You can’t run their social media campaign if they don’t give you access. You can’t manage a property if you can’t get in the building.

Another major point of contention is the price of service. What was agreed upon is what you need to charge unless stated in your agreement. If costs go up, you can add that into the next contract. If they insist on the old pricing, you’ll have to explain that your quality of work depends on the increased price. If they’re not willing to increase, you don’t have to renew.

You might also restructure your business and no longer offer a service that they relied on. In this case, the easiest thing to do is give plenty of notice and be clear about why you’re no longer offering that service.

Be Prepared

Once you determine that your expectations are clear and you’re unable to work with them, you need to begin severing your relationship. Here are some steps that you should take:

• Make sure you are right to terminate your services: It helps to talk it over with your business partners and others who work with the client. Others may provide solutions you didn’t see, or might be willing to take over managing that client. If everyone agrees that it’s time to sever ties, you can begin that process.

• Make sure you can legally do so: If you designed your contract in such a way that you can terminate service for any reason, you’re in the clear. If there are conditions, make sure those are met and document everything. A lawyer will be helpful here.

• Be tactful: This is tricky and can have the most significant impact on your long-term reputation. It’s easy to play the blame game, but that isn’t going to help. Prepare your explanation and try to keep it related to business. You don’t want to tell them that they’ve been unreasonable, but rather that you can’t provide the service they expect at the price point they want. If you know of similar companies that can help, send the client away with their information. This shows that there’s no bad blood and they’re not left in a panic to find a solution.

The Next Step

After you give your client the boot, it’s essential to make sure you’re not going to make the same mistake with the next client. Take stock of what you learned from your fired client and apply that to any future client you have.

You might want to add wording to your service agreement to make sure that you’re able to ask for more money when they want additional services. Maybe you can charge the client for the cost of the tools you’re using, plus the work you’ve done. Whatever the case is, you’ve learned something, and you’ll want to make sure you don’t repeat the mistakes that led you to fire your client in the first place.

If you’re a property manager and you want to know what you can do to help grow your business, contact us with the link below. From property management automation to organization or marketing, we can help. Contact us for your custom Game Plan and grow your business today!