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An occasional pruning of clients may be necessary for a small business to blossom fired!
By Harvey Meyer
IT SEEMS LIKE biting off your nose to spite crafting its own identity and future. stuck still requiring basic, less profitable ser-your face: a small business firing a client, even When Frances McGuckin of Langley, vices. The client’s demands were also psychi-a longtime, profitable one. British Columbia, was working as an accoun- cally draining. It was difficult, but Horowitz
But occasionally terminating a customer tant, one client was a family-run property- eventually terminated the relationship.
is perfectly logical for growing companies management company. Each family member “I probably should have done it years ear-evaluating the big picture. While hard to do, it operated an apartment complex. Financial lier,” he says. “It was the right thing to do, and
might be necessary if the business is to maxi- matters that McGuckin raised invariably I was a lot happier afterward.”
mize performance, relieve stress and forge a devolved into stressful family issues—accu- It’s easier to jettison dishonest, late-paying
solid corporate identity. sations involving missing money, girlfriends or unprofitable customers. The same goes for
“You have to look at the total cost to ser- and more. clients who are abusive or behave inappropri-vice each customer and whether you can “It became difficult because my approach ately to employees, consistently revise requests
develop the relationship to help you take was from an accounting/consulting point of ormakelast-minutedemands, wrongly finger
your business to the next stage. It should be view, but they looked at each situation from a your firm for mistakes or ask you to do some-a sound strategic fit on several levels,” says family point of view,” says McGuckin, a Costco thing unethical or illegal. But how do you fire
Beth Zimmerman, principal of Cerebellas, a member, author and now CEO of SmallBiz- otherwise good customers who are no longer
Long Beach, New York, strategic and mar- Pro.com, a small-business consultancy. “As a good fit?
keting consultancy. their property acquisitions expanded into the The first step is, don’t be hasty. It’s vari-
For survival-minded start-ups, it’s com- United States, I saw a way out. I told them they ously estimated that snaring a new client costs
mon to take on any and all customers. But as needed an accountant with cross-border expe- five to 10 times as much as retaining an exist-businesses mature, their expertise, prefer- rience and that I couldn’t do them justice with- ing one. Give targeted customers, especially
ences and efficiencies emerge. If a company out that knowledge. It was a gentle way to let small but otherwise satisfactory ones, a
doesn’t regularly scrutinize its customer list, go of the client.” chance. Explain your company’s plans and
sometimes culling one or several, the business Shel Horowitz, a Hadley, Massachusetts, invite them to assess their future needs and
risks becoming unfocused, catering to a business consultant and author, recalls a 15- how, or if, your business might help them
hodgepodge of clients with varying needs and year customer who wasn’t strategically aligned meet their goals.
profitability. Result: Clients dictate the busi- with him. As Horowitz enhanced his skills and Ideally, says Zimmerman, a small firm
ness’s operations, instead of the company boosted his rates, this longtimecustomer was should regularly engage in such strategic
ILLUS TRATION: AR T GLAZER/AR TVILLE
