When you run a service-oriented business, there comes a time when you must fire a client. Most of us keep a toxic B2B business relationship open for too long.
Here’s a video showing you how to prepare for toxic clients:
There are many reasons why you need to fire a bad client. But the good news is that it’s not necessarily a bad thing to do. You can learn a lot from your experience, so use this knowledge to improve your business.
Here’s the story of one of my former clients “Tony,” who owned a chain of auto repair shops. You’d think that someone with so much business acumen would know how to behave around their business providers. But, no, not so much.
Subtle warning signs of a difficult client
In the beginning, Tony was great to work with. He treated me as part of the family. I’d even had my car serviced at one of his shops – at a massive discount – and found no complaints with the service. His employees seemed like one gigantic family.
Except it was a sham, just a veneer of what was happening beneath the surface. Tony seemed almost too good to be true. Then one day, things fell apart.
I guess he got tired of me. It was a lot like dating someone, only to find that they suddenly won’t take your calls anymore.
Reasons to fire a difficult client
Since Tony was one of my first customers at Bleeding Bulb, my services were at a significant discount. Throughout our relationship, I had many other clients. But I was counting on Tony’s business to fill in the gaps. He had the money, but he was what I’d call a cheap complainer. It wasn’t long before he was complaining about every aspect of the services I provided.
At first, I thought that we could work this out, and he had some valid points. But he quickly turned into the boss from hell. Even though he had a know-it-all air about him, he became indecisive when I asked where he wanted to focus his business that week. But my suggestions were struck down.
It came to the point where I had nothing to do one week. Should I bill for that wasted time? I did bill for a minimal amount, and he threw a fit.
There was obviously a lack of respect that escalated.
When I scheduled time for him, he arrived late. He had no respect for my time. Once, I waited for two hours at one of his shops, while his staff brought me coffee, donuts, and a newspaper. They were apologetic, but it wasn’t their fault. Some of them told me he was that way sometimes.
The turning point
At some point, you realize that you must fire your client. They’re wasting too much of your time, and you can bill for lost hours only so long before they object.
In the case of Tony, I had spent hours on his ad campaign. It went live, much to the excitement of potential customers. Within a few days, he was throwing a fit. He wanted me to take down all the unscheduled ads and have them redone. And no, he wasn’t going to pay for the time to rework them.
I realized enough was enough. I’d already cleverly billed Tony in advance, and his accountant had sent me the check. I shot off an email to him basically saying, “You’re fired!” A week later, his assistant called to ask for a few documents, but that was the end of our working relationship.
I learned from my experience with Tony and decided to take steps to prevent this from happening again.
How to develop a proper business structure
I needed to develop a proper business structure that fit in with a business agreement, also known as a contract. These needed to be in place to prevent future business deals from going wrong. Everything would be neatly laid out in a contract.
Key points to consider
• How does the payment structure work? Include how to bill excess hours and what happens in the event of late payment.
• Specify an expected timeframe. Define the response time to receive information and a time for delivery.
• What services are included in the contract, not included, and available for an additional fee?
• Provide reasons for contract termination. Specify a fee for the inconvenience.
It’s important to tell your client exactly the services included. If you’re providing marketing services but not the graphic design, then note that in the contract. Also, include reasons why certain extras involve additional fees.
Develop your business structure & fee schedule
It’s not fun considering all of the details of your business. As you work with new clients, you may experience surprises, which need to be added to the contract.
As for Tony, I ran into him again. I decided to continue using his auto shop because they had excellent service. I hadn’t expected to run into him. He was very welcoming, and it was like I was one of the family again. He even asked how business was, but I never asked him if he needed anything.
This client changed my business forever, and soon I discovered that dealing with all my customers was better. Many complimented me on how well I ran my business. Learn from my experience and set up a good structure and agreement plan for your business, too.
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