How To Fire A Bad Client as an Entrepreneur : Under30CEO How To Fire A Bad Client as an Entrepreneur : Under30CEO
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How To Fire A Bad Client as an Entrepreneur

| May 17, 2011 | 7 Comments

Most successful entrepreneurs can point to a time when they were dealing with a client and things took a turn for a worse. A payment came in late. E-mails stop being returned. Requested materials weren’t submitted. After a period of time, there’s a realization that the client has become a handful and that maintaining the relationship is more trouble than it’s worth. The desire to keep a client (and the money flowing in) can easily overshadow the truth: the client needs to be fired.

So, how do you fire a client? The answer: Carefully and tactfully. Today I’m sharing how you can fire clients without ruining your reputation or going crazy.

Be Clear about Why You’re Firing Them: Emotions can begin to fly high once a business relationship goes sour. Take the time to think about why the business relationship needs to end. Are they chronically late for meetings? Have they consistently missed deadlines that are costing you money? Put the issues in writing and know exactly why you’re firing them before you make any moves.

Have the Conversation: The discomfort of confrontation lends itself to avoidance. Vague statements such as “This isn’t a good fit” leave the other party to wonder what really happened that led to the dismissal. In most instances, you do yourself and the other a party a favor if you clearly articulate your reasons without being accusatory. Talk with the client before ending the relationship. Your issues may be a product of a misunderstanding.

Accept Responsibility: Dale Carnegie, the leadership and relationship building legend, advised readers to point out their own shortcomings before those of others. Other people find it easier to acknowledge their part in a situation when we’re able to first point to our own issues. When you’re ending a relationship with a client, acknowledge how the circumstances or your actions may have contributed to the erosion of the relationship.

Offer Praise: Even if you’ve decided that you can’t move forward with the client, you can probably think of at least one or two things that you appreciate about them. Extend praise before criticism. It will disarm the client and create an environment that is conducive to a productive conversation instead of a shouting match.

Communicate Clearly: Thinking through your reasons for ending the relationship will allow you to communicate those reasons more clearly. Avoid vague terms and sugar-coating. Be honest without being abrasive. If ending the relationship is the goal, the other party should clearly understand that the relationship is being terminated and why.

State the Next Steps: State your intentions and offer the client an opportunity to tie up any loose ends or gain closure. If paperwork needs to be signed or property needs to be returned, state when you’ll address those things.

Put It in Writing: Send a confirmation email or letter that sums up the final conclusions and stated actions. If a contract needs to be terminated, send an official letter doing so. Be firm yet polite in reiterating the conclusions and making any necessary requests.

Many entrepreneurs are taught how to initiate good business relationships, but they’re rarely taught how to end them. Now that you’re armed with a step by step method for firing bad clients, you can manage your relationships from a place of power.

Lisa Nicole Bell is an award winning filmmaker, author, and serial entrepreneur. She’s the CEO of Inspired Life Media Group where she and her team create “media with a message™”. Learn more about Lisa and her current projects at www.lisanicolebell.com

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Category: Startup Advice

  • http://eoalchemy.com Peggye

    Definitely a part of the job that’s not enjoyable.  Love the advice!

  • Anonymous

    Great shares. I once fired a client who demand a lot more than they pay and not willing to put down their requirements in written form; worst still, they change the requirements everytime we meet.

    It turns out the decision made was right as they haven’t even complete the project up-to-date with their current service provider. I’m talking about a 6 month time just to decide what theme to use for their website. It was a horrible experience.

  • http://www.online-business-virtual-assistant.com/ Virtual Business Assistant

    Great post and firing a client is the hard part and we have to be careful while doing it. Thanks for tips given here.

    Shilpi
    Singha Roy

    http://www.obvainc.com

    Facebook fan page – http://on.fb.me/i9Oifw

  • John Knight

    It is best not to label a client as “bad” in the first place. The relationship almost always sours because the supplier of the service has not laid out (and adhered to) specific terms set up from the beginning.

    An article on how to set out clear parameters for the client would be far more worthwhile.

  • Lisa Nicole Bell

     Hi John!

    Generally speaking, I agree with your assessment. However, there are certain clients that, no matter how well you communicate parameters, end up causing major problems for a company. It’s not always as simple as a communication glitch. Sometimes it’s necessary to terminate the relationship. “Bad” is just a term used to describe the stress and drama that can sometimes come from the relationship.

  • http://grasshoppergroup.com Allison

    This is definitely more common than most people think, and entrepreneurs have to be smart with how they go about doing this.  We recently put together an infographic called, “How to Determine When to Fire a Client” http://bit.ly/ia0EFk, which is a fun take on the whole firing a client thing (which isn’t fun at all!).

  • http://grasshoppergroup.com Allison

    This is definitely more common than most people think, and entrepreneurs have to be smart with how they go about doing this.  We recently put together an infographic called, “How to Determine When to Fire a Client” http://bit.ly/ia0EFk, which is a fun take on the whole firing a client thing (which isn’t fun at all!).