When To Drop a Client

Posted by Marcel Sim under People & Relationships,
April 30, 2008

About.com Entrepreneurs: Have you ever been fired by a client? It's painful, embarrassing and even a bit depressing when it happens. It can completely throw your confidence as an entrepreneur.

And yet, it may be the best thing in the world for both you and your client.

But why let it get to the point that they have to fire you? Don't you want to be the one in charge of the relationship? Don't you want to end it on your own terms, as much as possible?

While you may feel like you really have to hang on to the client, whether for your own cash flow or out of your sense of commitment, there are several signs that it may be time to terminate the client relationship.

In some cases, the problem really is with the client, and you should just fire them:

The client is a jerk.

Life's too short. Dealing with jerks is stressful, and if you're stressed, not only will it affect your mental and physical well-being -- it will also affect your ability to serve your other customers well. It will affect your relationships with employees and business partners. And if they're that difficult, odds are that they're not going to be a good referral source for you anyway -- they may even be a liability.

The client drains all your time.

You may have heard of the Pareto Principle, aka "The 80/20 rule". In this context, it's the idea that 80% of your profits come from 20% of your customers, while 20% of your profits come from 80% of your customers. Now I'm not suggesting you should drop your smallest clients, just the least profitable ones. Sometimes it's difficult clients, but sometimes it's the nicest ones -- the ones who can talk you into doing just a little bit more, then a little more, then more, and so on. Scope creep! Try to draw the line with your client, but if it continues, you may have to cut them off.

7 Signs It's Time to Drop a Client [About.com Entrepreneurs]

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