Firing a Client

Marcia Bagnall, SBDC Director
While it’s uncommon for a business owner to fire a client, sometimes it’s the best long-term solution for the business.
There are good reasons why some clients just aren’t worth your time and energy. Deadbeats who won’t pay up and have continually revolving balances (and excuses to go with them) may cost you more than they’re worth. Ditto for someone who eats away at your time, frequently changes meetings, stands you up, and needs endless attention (and still can’t make a decision). Some clients are overly demanding, belittling or abusive to you and your staff. And then there are the clients who ask you to behave in unethical ways (lie, forge documents, cheat vendors, etc.). Good riddance to these folks, they’re not supporting your business.
Here are some steps you can take to distance yourself from a client you no longer want to do business with.
  • While a phone call is more personal, a letter is a better option. It gives you a chance to carefully choose your words and have your say without being argued with, yelled at, threatened, cajoled into changing your mind, etc. You can respectfully lay out your rationale for the decision and give the client next steps. 
  • Carefully write a business letter (standard business letter format) that is polite and firm. Resist the temptation to make accusations. Don’t use sarcasm or profanity. Take an apologetic tact that expresses regret that you will no longer be able to do business with this client. 
  • Clearly list the top reasons for your decision but phrase them in a way that is tactful. If a client takes way too much time you could suggest that this client “…needs a higher level of service than we can provide…” You don’t need to create a long list of reasons, just pick the most important ones. And if possible, suggest alternative providers to give the client a next step.
  • Remember to clearly list any issues that the client caused, breach of contract, problems with vendors (after they cancelled orders at the last minute), missed meetings that cost you travel time, etc. These details will help you substantiate the client’s wrongdoings in the case that they try to take you to court. 
  • Don’t claim things that simply aren’t true. If you’re not going out of business or moving to another state then don’t claim that you are. They’ll figure it out soon enough and you’ll both be embarrassed. Same goes for fake terminal illnesses, made up family issues, etc. 
  • End the letter with a polite wish for luck in their future endeavors. Then go back and make sure that the letter is perfect in its spelling and grammar. Have someone else look it over as well, it’s too important to just dash off and hope for the best.
  • You may get an apologetic response from the client asking you to reconsider, but don’t give in! There are good reasons for terminating this relationship, stick to them. You may also get an angry response. Be calm but firm in your resolve.
  • Be sure to keep all records of this client along with this letter in a secure place. You may need to refer to them again. Then resolve to remain silent about the issue, no badmouthing this client to colleagues or family. You don’t want to set yourself up for slander or libel claims.