If you own a business in the independent consulting world, you’ve undoubtedly been in the situation where it is crystal clear that you need to fire a client. The reasons for such a split vary widely from company to company, industry to industry, so we won’t delve too deeply into that. But we will share a few tips and best practices on how to fire a client. Because let’s be honest, it can be a really, really hard thing to do.
First, Understand the Financial Element
The very first question you need to ask yourself is whether or not you can afford to fire a client. Understanding how the given client plays into your monthly revenue will help you figure out what the future would be like without them. Without the income from this client, how would your expenses—and your ability to cover them—be impacted? Review your overall accounts receivable and accounts payable reports as well those for the individual client. Understanding whether or not you can afford to fire a client—regardless of the reason—is a critical first step. If you determine that you can’t, you might need to consider alternative courses—like keeping them.
Honesty is the Best Policy
If it’s determined that you can fire your client, there is one singular policy you should adhere to: honesty. Prepare to have an honest conversation with your soon-not-to-be client. There’s no point in coming up with a stretched reason for why you need to say goodbye, so why do it? Be forthright, frank and transparent. And let’s be real: the “it’s not you, it’s me” rationale probably applies! Explain to your client the reasons why this working relationship just isn’t a fit anymore. Maybe they’ve outgrown the profile of companies you normally work with. Maybe their business has shifted into a focus area you’re not interested in. Whatever the reason, be honest. And speaking of “it’s not you, it’s me…”
Break Up in Person
Thinking of breaking the news via email or over the phone? Think again. An email lacks context and can (read: will) be misinterpreted. A phone call is an easy way out. Moreover, addressing this issue face-to-face is simply the right thing to do. (Of course certain geographic and financial circumstances will determine how you fire a client, but when at all possible, own it face-to-face.)
Pro Tip: Before you make your move, consult the agreement you have in place with your client, specifically, the termination clause. You want to be sure you follow it in order to prevent any unnecessary situations. When in doubt, discuss with your lawyer.
Do Not Make it About Your Skill Set
If referrals are important to your pipeline, you do not want a former client thinking you walked away from them because you couldn’t do the work or provide the strategy. They’ll never refer you because in their mind, they’re not going to put their reputation on the line for someone who couldn’t get the job done for them. So do not make it about your skill set.
What if They Beg You to Stay?
This can absolutely happen. If you’re amazing at what you do, there’s a good chance your clients will come to rely on you quite heavily. Life without your will seem unfathomable to them. (That might be an exaggeration, but you get the point.) If they ask you to reconsider, you have a few options. First, you could stick to your guns. (This is probably what you should do because you’re breaking up for a reason.) Second, you could back down because you feel bad. Third, you could agree to stay, but only if changes are made (i.e., new parameters of the relationship, more money for you, new policies and processes, etc.). That last option, while tempting, needs only to be explored if the underlying issues for the original break-up are addressed. If they aren’t, they’ll still be there in the future.
Figuring out how to fire a client isn’t easy. But if you’re honest, thoughtful and employ a little foresight, you can let them down gently and still maintain a quality relationship.
Special shout out to our own financial guru, Wendy Rose, for her input on this post!
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