If you have been in business a while, you have probably already have faced this problem. If you are a recent startup, this question might have crossed your mind. So, what is the answer? Is firing a client a bad move for your business? Some of you may be thinking, why would you ever fire a client? That’s refusing income!
Believe it or not, firing a client can be a good and wise decision. There are cases where this action is even necessary:
An unsuccessful partnership. Sometimes, it is necessary to end a relationship with a client simply because some people do not work well together. In order to continue to be on pleasant terms, sometimes the only option is to end things before they become ugly. A good relationship should fit easily, naturally into the scheme of things.
A customer grows to be too big. It is possible for a customer to become too large, outgrowing your services. Why is this? If a customer becomes too large, it means that their needs will also grow which results in both an increase in revenue and risk for you. For example, if you currently have a client that accounts for more than 10% of your overall revenue, this is a risky client to have.
The difficult customer. Then, there are clients that are just simply impossible to work with. They are a pain to deal with. In fact, they are bad for your business. Ending such a relationship is a wise business decision.
There are obviously concerns over firing a client. In doing so, your business’ reputation can be tarnished by the negative reviews you will most likely receive – something a small business cannot afford to happen. If you have been placed in this situation, the key is to remain professional, end the relationship as smoothly as possible and do so quickly in hopes that things will end on good terms.
Ideally, to never place your business in a situation where its reputation can be tarnished, you should only work with the clients that are the best fit for your services. While this does involve research on your part, the information will prove to be invaluable in the long run.
Are you concerned about the risk involved in running your business? You might find that applying for a merchant cash advance is another wise and safe business decision. With 1st American Merchant Funding, a merchant cash advance involves funding from your merchant account as well as flexible payback and fast approvals. As you build your business in both clients and funding, make sure that you are making wise decisions that will prove profitable in the long term.