Sack Your Worst Small Business Clients Now!
You have probably seen this advice before haven’t you? So called business experts tell you that you must sack your worst clients and then the void of the income that they used to provide you with will be fuelled by much better clients who will pay more for your expert services. Well, what a load of poppycock I say! I don’t know what they are thinking when they send out that advice, or type that blog. It is like the experts who tell you to think about the lifetime value of a client when spending your marketing budget. Don’t worry about making a profit from the first transaction with your client, wait until the third or fourth transaction and then you will really be in the money. Again, what a load of poppycock! By the third or fourth transaction most small business owners will have gone out of business. You need profit from the first transaction! Every marketing activity you undertake must pay for itself. This is the real world not some lovely cotton wool world!
I am from the real business school. My marketing advice is based on the school of real businesses run by real people. These people have a mortgage to pay and household bills to finance. If they sack all of their demanding and difficult clients before replacing their income, yes they might be highly motivated for a few weeks to replace this income, but if their motivation subsides before they have replaced the income they are doomed. Their business will just be a sad and sorry statistic to go along with the many others who have failed, and the experts that fed the diatribe of rubbish advice will carry on doing the same to other business owners out there.
My advice is based on real experience. My advice is based on the understanding that when you run your service business, you need to pay bills every single month, not just occasionally. My advice is based on having a mortgage company, who whilst I was growing my business, still demanded payment of my mortgage every month, not just when I felt like it.
Whilst I agree with the sentiment of the advice to sack your worst paying and most demanding clients, my advice is that you should only do this once you have already replaced their income. Put in place marketing activities, systems and processes to replace their income to your business before you sack them. Add a new marketing system to your business to replace the need for their money before sacking them. Then, when you have removed the need for their income, take great pleasure in telling them that your business is now much more successful and they will need to pay four times as much for the service if they want to continue working with you.
Then, and only then, you can go home at the end of your working day knowing that you have made room for more profitable clients in your business life.