No one goes into a relationship, business or otherwise, planning how to end it. Firing a client is an unfortunate necessity when things go terribly wrong. The first thing to determine is your last straw. This client may be:
- consistently asking for services beyond the scope of the contract.
- pushing back on everything they're paying you for.
- difficult to work with.
- not paying you for all of the work you've already done.
Now that you know you've had enough, do you know what to do next?
Here's what to say and do when you're firing a client.
Step 1: Decide To Fire The Client
If there's hesitation, you may need to settle on this decision. Ask yourself these questions:
- Is the client the problem or the project?
- Can you resolve project scope or communications challenges?
- Are you losing money by keeping this client?
Try not to make the decision lightly or out of anger. Think clearly before moving forward. Maybe it's time for you to raise your rates or address out-of-scope requests. Perhaps there's a personality conflict. Is there someone else on your team that would be a better fit for your client contact?
Communications challenges can be tough but they may not be a reason to fire your client. Do you need to communicate more or listen better? Try to resolve these challenges before making a decision. If you've tried everything, then move on to the next step.
Is your client not paying or unable to pay what they agreed to pay? Then it's definitely time to have a serious talk and possibly let them go on their way.
Step 2: How to Say, "You're Fired."
You are now positive that this client needs to go. How do you say that? And what do you do if you have a signed contract with your client?
First, let's address the contract. If the client is holding up their end of the deal, you may have to wait until the contract expiration. If the contract is month-to-month, it's time to give 30-days notice that you will not be renewing. If you're uncertain if you can get out of your contract, have an employment lawyer look at the agreement.
Now, let's talk about the tough conversation you're about to have. You're going to have to settle your nerves and your mind before doing this. Have a plan for what you're going to say so that you don't get off track. Here are some suggestions on how to let them go:
- It's not you. It's me. "I am not sure that my business can suits your needs. Here are some suggestions of others that can."
- I'm cutting back my hours. "We're re-evaluating the amount of time we devote to certain tasks. This restructuring doesn't work for your needs so we will have to refer you elsewhere."
- Our business model is changing. "After some analysis, we have determined that our current business model isn't effective for our long term goals. We will no longer be taking on projects or work such as yours."
- Due to non-payment, we have stopped work on this project. "After several attempts to collect, we are unable to continue working on your behalf."
- We will not be renewing your contract. "Since we are unable to agree on goals or methods to get there, we have decided not to renew our contract with you. Here are some competitors that may better align with your business needs."
There are several ways to cut ties with your client but it doesn't hurt to do it politely. Make suggestions for alternate business partners that could help. If any of these other businesses are colleagues, give them a heads up to let them know that you're sending a potential problem their way. They may be more up to the task than you are.
Step 3: Getting Paid What They Owe You
When you've fired a client for non-payment, that doesn't mean that they get away with it. You still have a right to collect on the work that you've done. This important step needs to happen immediately:
The longer an invoice is outstanding, the less likely it will be paid.
You may have already attempted to collect on their past due invoices. You may have already written off their account as bad debt. You can still work with a collections agency to get paid!
Gather all communications of this client - contact information, emails, notices of past due payments, invoices, contracts and any other attempts to collect - to help the collections agency get started. They will chase it down and do any appropriate research to get you paid. Why will they work so hard for you?
Because they don't get paid unless you do.
Learn more about B2B collections and let us know if Enterprise Recovery can help!
