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Cutting a client loose

When should you fire a client?

June 03, 20242 min read

Firing a client is a serious decision and should not be taken lightly. However, there are situations where it might be necessary for the health of your business. Here are some key reasons to consider:

1. Chronic non-payment:

  • Late payments: If a client consistently pays late, despite reminders and attempts to resolve the issue, it can significantly disrupt your cash flow and create financial strain.

  • Delinquency: If a customer has a significant outstanding debt and shows no intention or ability to pay it back, it might be time to cut ties.

  • Do not delay I know this is hard, but there are times when you MUST have that difficult conversation and discuss mutual options.

3. Excessive demands or unreasonable expectations:

  • Constant demands: Some clients may be excessively demanding, requiring unreasonable amounts of your time, resources, and attention. This can drain your team's productivity and negatively impact other clients. Avoid this in the begging when setting boundaries and ensure you both follow them.

  • Unrealistic expectations: If a customer consistently sets unrealistic expectations for services or results, leading to constant dissatisfaction and conflict, it might be better to part ways.

4. Misalignment with your values or services:

  • Changing business focus: If your business is evolving in a new direction and a client no longer aligns with your target market or service offerings, it might be time to move on.

  • Ethical concerns: If a client’s practices or values clash with your own, it can create a conflict and potentially damage your reputation.

  • Client focus changes: It is possible their focus or business is no longer aligned with yours. That’s okay and parting ways is a good way to preserve the relationship.

Important considerations:

  • Always exhaust other options: Before resorting to firing a client, try to address the issue through clear communication, setting boundaries, and offering solutions. Do not do it because you are frustrated with them. A decision like this is not to be made lightly.

  • Document everything: Keep a detailed record of interactions with the customer, including any incidents of abuse, late payments, or unreasonable demands. Be respectful when discussing it with them.

  • Be professional and respectful: Even when firing a client, maintain professionalism and respect. Explain the reasons for your decision clearly and offer a smooth transition, if possible.

Terminating a relationship with a client is the last resort but not out of the question. Discuss it with a trusted source such as a Peer, Networking group or a trusted friend. Ensure your decision is clear and

David Baughman is the consummate Operating professional, who has brought P&L leadership experience to a broad range of sectors, stages of growth, and business environments. His experience includes aerospace, automotive, industrial, and oil & gas. In every engagement, David has dramatically, and profitably accelerated the company’s growth through his deep grasp of all functions and leverage points. Equity participants see virtually immediate acceleration of the topline, gross margin improvement, and EBITDA margin gains. Those quantifiable measures are his keys to unlocking shareholder value.

David is a trained Lean Champion by the Lean Enterprise Institute consulting group and holds credentials for Positive Management Leadership from the Columbia University Emerging Leadership Development program. He resides with his wife in the Fort Worth area, and enjoys reading history, working outdoors, and golf.

David Baughman

David Baughman is the consummate Operating professional, who has brought P&L leadership experience to a broad range of sectors, stages of growth, and business environments. His experience includes aerospace, automotive, industrial, and oil & gas. In every engagement, David has dramatically, and profitably accelerated the company’s growth through his deep grasp of all functions and leverage points. Equity participants see virtually immediate acceleration of the topline, gross margin improvement, and EBITDA margin gains. Those quantifiable measures are his keys to unlocking shareholder value. David is a trained Lean Champion by the Lean Enterprise Institute consulting group and holds credentials for Positive Management Leadership from the Columbia University Emerging Leadership Development program. He resides with his wife in the Fort Worth area, and enjoys reading history, working outdoors, and golf.

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