When to part ways with a client (and how to do it)

It’s not a fun thought or conversation, but we all may eventually have to let go of a client. You can learn a lot working in the B2B space. Most of your clients are fantastic, bringing interesting projects that allow you to develop your skills while paying your bills. Then, occasionally, a client comes along that you find challenging to work with. They may lack trust in your expertise, pay late, or fail to communicate.

Eventually, the time comes when you have to ask, “Is the money worth it anymore?”

In this guide, the most important thing you’ll learn is how to fire a client politely and without negative fallout. Before that, we’ll discuss how to know when you’re dealing with a bad client. 

While we’re on the subject, we should also point out an important fact. Not all “bad clients” are lost causes. Sometimes, you just need to manage expectations and control the frame to steer the relationship in a better direction.

We’ll show you how to do that to…

Yes. You should move on from bad clients

Many factors play into our decision to stick around with difficult clients. We rationalize it as “part of doing business” or tell ourselves that the situation isn’t as bad as we feel now. If a client represents a significant chunk of your income, you can’t easily let them go. Is the financial cost of firing a client instead of mending the relationship or dealing with it too much? Then you may consider trying everything at your disposal to mend the relationship.

All factors aside, you should seriously consider letting go of clients that aren’t ideal.

First, bad clients cost you money. If they pay late or complain about your fees, they will interrupt your cash flow. 

If money isn’t enough, bad clients waste time. Dealing with a client that asks for an unreasonable number of changes, fails to communicate, or smothers you? Yep, that client is draining precious time that you could spend elsewhere. If you’ve recently felt like you don’t have enough time to grow your business or devote yourself to clients, this is the first place you should look.

And when losing time and money isn’t enough, bad clients can also wreak havoc on your mental health and self-esteem. Many freelancers and business owners lose belief in themselves because they believe the stories their nightmare clients tell them.

Don’t confuse challenging clients for bad clients

It’s important not to confuse bad clients with challenging clients. You see, some clients will push you outside of your comfort zone. They want the best from you, and they believe you’re capable of it. If both sides manage expectations and are consenting, then this is good.

Is it the right time to fire a client?

Hopefully, the last paragraph puts you in the mindset to at least consider firing a client. We’re not talking about making a knee-jerk decision. Instead, we suggest you evaluate every angle, starting with what you stand to lose by firing the client.

When it may not be the right time

You’re probably already considering how you’ll fare financially without the client. If the answer is “not well,” you should put more effort into improving the relationship. If money isn’t an issue, move on to the next factor. 

Oh, and this can’t be repeated enough. You are the biggest determinant of the quality of your relationship with a client. The standards you set, your mutual expectations, and the clarity of deliverables are all under your control.

They say that a person without their word is nothing. And in business, news of a bad reputation can spread like wildfire. This is why you must consider the ethics of firing a client. This means leaving them in a bind without a replacement, breaching a contract, or causing undue damage by firing them.

How to identify a bad client. Does this sound familiar?

No business relationship will be free from strife. Business issues like finances, expectations, and meddling in personal lives play a hand in creating tension. 

Here are the three biggest red flags to look out for when evaluating a client:

Poor communication

Poor communicators exist on both ends of the spectrum. It’s not ideal to work with a client who calls you at all hours of the day, wasting valuable work and personal time. Clients that go MIA for days or weeks at a time when you expect more frequent communication can also make your job more difficult.

Regular and scheduled communication with a client is important to maintain the integrity and success of a relationship. 

Many business owners fail to set proper expectations when starting a business relationship. The first thing you should do is reset the expectations on how often and when to communicate. If that’s a lost cause, you should move on from the client and apply what you’ve learned to the next one.

Demanding

Demanding clients frequently ask for too much in too little time. They have an abstract understanding of how long it takes to accomplish tasks. They also have unrealistic expectations for what benefits your work can bring them and how soon they’ll see the benefits. This client, who’s also often a poor communicator, doesn’t respect your time or process and believes you exist on this planet solely for them.

Does this sound familiar?

Again, it’s your responsibility to set expectations at the start of a contract. If you believe the juice is worth the squeeze, lay down the law retroactively to realign expectations. After that, keep a short leash and be prepared to cut ties. Did you set adequate and concise expectations? Then save yourself time and consider cutting ties ASAP.

Pays late

A client that consistently doesn’t pay on time probably doesn’t respect your worth. Pair this with a client that demands the world and asks for a million revisions, and you have a massive headache. Not only does a client paying late cost you money, but they also cost you time and stress. 

In this situation, you should discuss this with your client ASAP. If what we shared above is true, then yes, you should explain that working with them is not in your best interest. However, if you respectfully approach them, you may learn some things.

For example, they could be in a tough financial situation. Or maybe, they just need more explaining to understand your true value. Either way, you can take appropriate steps in your best interest after obtaining the facts.

How to fire a client (without burning bridges or your reputation)

Firing a client can be intimidating if you’re not the best at handling confrontation. Know that there is a way to let go of a client without burning bridges or stoking emotions. Following these best practices gives you the best chance of coming out strong.

• Stay calm: First things first, remain polite and rational. Resist the urge to engage, recall past grievances, or resort to name-calling. It’s unlikely that a client will try to make you angry, but if they do, don’t give in. Stay on the topic of business so you can move on to the next steps.
• Have a cancellation clause: Make sure you have a cancelation clause in your contract.⁣ Getting your client to agree to a mutually fair cancellation clause could save you from legal headaches and gives you the prerogative to end an engagement.
• Settle up financially: Estimate how much they’ve paid vs. how much of the project you’ve completed. Use these metrics to determine if you need to bill them or return them some money.
• Provide a reason: We haven’t touched on the fact that sometimes the client isn’t the reason you have to let them go. If your services or availability has changed, you may have to make the tough choice of trimming some fat. You can even position it as you do them a favor by pointing out that you can’t give them the value they deserve.
• Talk over the phone: If you start the process with an email, follow up with a phone call. Set up a time to chat so they have time to ask questions and voice concerns. 
• Leave them better off: Avoid leaving clients hanging and giving them ample notice. Finish the project and make the work transfer as easy as possible. If you leave clients better than you found them, you’ll leave the door open for them to give you more opportunities to work together again or for referrals.

Improve your business

99% of the people you work with will enrich your life, but occasionally, you’ll run into some people who aren’t compatible. Even more, some of that 99% isn’t the right fit. You aren’t doing anyone any favors by prolonging relationships that aren’t mutually beneficial. The sooner you can transition from saying yes to every opportunity to being more selective, your business will improve.

This blog showed you one way that saying no can improve your business. There is one way that saying yes could greatly improve your business and life. That’s by saying yes to using a tool like ComplYant to help you keep track of taxes and other essential obligations.