Small Business

Grow Your Business by Breaking up with Bad Clients

Posted by Factor Funding Co. on September 25, 2012

If you're a self-employed business owner, the thought of dropping some of your clients may seem like bad business sense. However, if you're in a situation where you have more clients than you can handle, you may be able to actually grow your businessby walking away from bad clients. The key to doing this successfully is taking your time when you're evaluating your current client base so that you retain the most valuable customers.

Think About Dropping Some Services

One way to easily trim your client base is to stop offering select services that these clients use. For example, if your goal is to perform more profitable work, you may consider eliminating your low-priced services to encourage your clients to either pay more or find another place to patronize. Even if you're trying to get rid of some of your clients, it's still a good idea to send them an email or a letter explaining the shift in your business strategy and offering alternative services that may be a good replacement.

Make Your Good Clients a Priority

When you're trying to trim the number of clients you have, it's always smart to do what you can to hold on to your high-paying customers. If these clients call and request work, you should accommodate them as quickly as possible to let them know that their needs are a priority for your business. You should also follow up with them to find out if they are satisfied with your work and to advertise additional services they may be interested in purchasing.

Increase Your Prices to Weed out Low-Paying Clients

What can you do if you have several clients that only pay for the least expensive services you offer? Consider raising your prices significantly. Before you do this, though, take a good look at your sales. If these low-priced services make up the bulk of your monthly sales, you may not want to risk taking this approach because it may alienate some of your other consistent clients.

Use Your Work with Other Clients to Drop Poor Customers

As a last resort, you can always use your work with your better clients to help you sever your business relationship with bad clients. Talk to one of your major clients and ask for permission to use your working relationship as a reason to streamline your interests. When you contact your poor clients to tell them you'll be unable to continue servicing them, you can explain that your work with your major client is keeping you occupied so that you need to cut back on other customers.

While many entrepreneurs are concerned with finding as many clients as they can, it's only helpful to your business if the clients offer consistent work and pay well. If you have a few too many customers to service, it may be time to grow your business by breaking up with bad clients.

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