You might wonder who has the courage to actually fire a client in these uncertain economic times.
The answer is simple: professionals and business owners who envision the long-term erosion of their business if they don’t fire them.
A colleague who was considering firing a problematic but important client said to me, “Cash flow is cash flow, and that’s all that matters.” Some months later, turnover in the business had escalated at such a rate that the owner finally had to take over the account, and only after feeling the stress of others who had managed the account before, finally fired the client.
Timing is everything
Think the firing over carefully. You should never decide to fire a client immediately after an argument or a discussion you have taken personally. Your decision should come only after documenting a series of examples of non-performance or bad business behaviour on the client’s part, the steps you took to save the deteriorating relationship, and careful consideration of the pros and cons of firing them.
Weigh the risks involved in cutting ties
You need to quickly assess whether a conflict with a client is merely a personality issue or whether it could have legal ramifications that may affect your business. If the client does small things that drive you crazy, such as occasionally being late for meetings or cancelling on short notice, they are not in contravention of your working agreement. But if their chronic lateness and failure to meet input deadlines hamper your ability to do your job and fulfill your side of the agreement, then you could be facing a legal issue.
Ask yourself what triggered the tension
Was it your behaviour and actions or your client’s that started the problem? Are these actions personality-based or do they have legal ramifications?
You need to first assess the events that led to the difficult situation. Here’s how.
- Who is responsible for the current situation
- Whether you did all you could to avert the situation
- The risk or consequences you face as a result of the situation
When ending a client relationship, it is important to be decisive and remember you are making a decision that will ensure your business’s future success, not to save face or rebuke or embarrass the client.
You need to assess the risk of the client suing you for damages as a result of withdrawing services or breach of contract. Without legal intervention, you may also risk not receiving payment for any outstanding invoices.
How do you end the relationship?
Once you are confident that your decision is legally valid and you are not at risk of being sued, how do you tell your client that, “it’s over?” The goal is to have a former client who will let the matter rest versus one who will attempt to damage your professional reputation out of spite and anger.
Depending on the client’s initial response, you may need to engage a lawyer to review the client agreement (if one exists) and itemize instances when the client did not abide by it. You can save time and money early on and avoid court proceedings by documenting events that led to your decision. So much the better if those events involve the client’s financial violation of the agreement (e.g. failure to pay on time or unduly withholding payment without cause) or missing deadlines that affect your ability to meet agreed upon goals. Where personality conflicts are concerned, things can get hazy.
If you once shared a strong personal and professional relationship, you might start the telephone conversation with, “Terry, you have no doubt noticed that our professional association has become strained of late. Despite our conversations to rectify the situation many of the issues remain. I have no choice but to terminate our professional association. If you wish, I will meet with you to share my reasons behind this decision, or confirm my intentions in writing.”
If you did not have a close relationship with the client and dealt with many people within a large organization, you or your lawyer can send a letter to your lead contact there communicating your wish to cancel the contract. Keep it brief, objective (vs. judgmental) and most importantly, clear. Briefly state the reasons for termination, the date the termination will come into effect, and any other issues that need to be resolved, such as payment of outstanding invoices or return of product or work materials (including promotional displays or artwork) to either party.
When it’s not the client’s fault
Sometimes it’s not the client’s poor behavior, dysfunctional infrastructure or deteriorating business culture that drives your decision to end the relationship. One-person business owners are sometimes asked by clients to deliver products or services beyond their area of expertise with the full expectation they can get the job done. Rather than disappoint the client with a less than stellar outcome, offer to recommend another business that can meet their needs. It’s not being lazy, it’s good business.
As difficult as it is to turn away cash flow from a client, you and your client are better off in the long run when you are honest with one another. Chances are, the client will refer you to others or give you assignments that are within your area of expertise. You’ll earn more and build all-important trust in the process.
This content was originally published on LinkedIn.