I work in a law firm, and we get clients of all types in our office. Though most of them have legitimate problems and are very appreciative of the attorney’s help, every once in awhile we see unpleasant people that want something for nothing.

Some think that they know every law applying to their situation and try to tell the attorneys how to do their jobs, without a day of law school. Others insist that they are the only clients we have and that we must drop everything to appease their every whim. And there are some who just absolutely refuse to make any sort of payment on their increasingly outstanding bills.

And, typically, the attorneys I work for will only put up with so much before they withdraw from the case, tie up loose ends, and gracefully let the client go. I honestly believe this is one of the many reasons why the firm is so successful. As every business owner should, they realize that there is no need wasting time on clients who don’t appreciate you and the service you provide.

The basic principal is that bad clients = less profit. Even a client who is paying, but demands far too much of your time dips into your profits because you are not giving other clients the attention they deserve and, therefore, are not earning as much as you could be.

Are your profits being hindered by deadbeat clients?

Here are examples of bad habits by clients you should strongly consider cutting loose:

Non-paying or Low-profit Clients
If they’re not paying you for your services, then they are obviously not worth working for. There is, of course, an exception to this rule. If a client is generally appreciative and can’t afford their entire bill, make payment arrangements that work for both of you. If they still won’t pay, even after you’ve given them a break, then drop them (and, if it’s worth pursuing, sue them for the unpaid balance – after all, you gave them a chance).

You also might want to determine a minimum profit you’re willing to make and cut the clients who don’t meet the quota. If they have potential for growth, great! Consider hanging on. But if things have just gone nowhere for a long time, you may consider putting that effort into the clients who profit you most.

Clients Who Require Justification
The clients that you always have to justify your prices or time to are just not worth having around. We see that sometimes at the law firm because many of our clients are billed at an hourly rate. Occasionally a client comes along who disputes the attorney’s time on their case. These are the sort of clients who want your services, but aren’t appreciative enough to compensate your time.

Time Wasting Clients
Clients who are unprepared for meetings, aren’t sure what they want from your business, or are just unwilling to heed your advice are not worth the headache. You’re the expert in your industry and they are not, otherwise they wouldn’t have come to you in the first place. If they aren’t willing to hear what you have to say now, they likely never will be. It will be a constant battle and stress. No one needs that hanging over their heads or their business.

In the end, it all comes down to your personality and business ethic – just how much you are willing (or able) to put up with. However, if you’re business is struggling, regardless of how nice you are, I strongly urge you to examine your clientele. Some of them may be part of the problem.

Related Reading:
• Entrepreneur.com: Fire Your Bad Clients

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One Response to “Fire Bad Clients to Increase Profits”

1. Mighty Bargain Hunter » Welcome to the Carnival of the Capitalists says:
   

   […] Fire your deadbeat clients to increase your profits. Elaboration on the Small Business Buzz. […]

   Posted February 6th, 2007 @ 11:31 pm
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