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Salt Lake City Bookkeeping Blog

Firing a Bad Client and Refusing New Business

Posted by Matt Roberge on Jun 8, 2011 10:22:00 AM

Have you ever had to fire an existing client or refuse new business from someone that wanted to work with you?  It may seem crazy or even foolish to an entrepreneur starting out to refuse any business.  However, doing business with every potential client you meet may become a big problem down the road.

Define your target market

If you are a small business you probably have some sort of focus.  It could be a specific industry, business size etc.  Try and define your target market from the very beginning of the life of your business.  Make sure you are analyzing your sales data to look for shifts in sales trends to make sure you are staying on track.   

Know what your perfect client looks like

This is a little bit different from your target market; know what your perfect client looks like.  How do they behave?  What are they looking for?  What are you looking for from them?  Your perfect client is the home run.  You have what they want and they fit your sales focus perfectly; it is the perfect fit for both parties.  Target and look for these clients and realize when you are sitting in a sales meeting with the perfect client. 

Stay true to your business plan

Once you have defined your target market and also what your perfect client looks like you need to stay true to the plan.  It is so hard to refuse business when a client wants to work with you and give you money.  Likewise, it is difficult to fire an existing client that is already paying you.  The thing to realize is that a client that doesn't fit the mold may become a huge problem down the road.  First, you may be trying to service a client that you are not capable of making happy.  Second, time spent dealing with problem clients may interfere with servicing your current clients that work well for your business.  You may lose some of your existing clients because you can no longer offer them the same level of service that you once did.  When you make a sale to a bad client you may think you are taking a step forward, when in fact you may be taking a step backwards.

Firing an existing client and refusing new business can be an incredibly hard thing to do.  It is hard to identify these clients during the sales process or while you are servicing them.  It is even harder to turn down sales for your business.  However, by establishing a sales plan and sticking to it your business will be better off in the long run.

Have you ever had a problem client you had to fire?

Ever refused business from a potential client that wanted to work with you?

Was it a good or bad decision to turn the business away?

Topics: Business Efficiency, Business Ideas, Sales Advice