7 Lessons I learned from building, growing and selling my IT business | Lesson 3: Fire Rotten Clients

lesson 3 fire rotten clients

If you’ve read my first 2 lessons (Lesson 1: Find a Niche, Lesson 2: Sell, sell, sell), you are probably asking yourself, “Why would I fire clients that I’ve worked so hard to get?  Isn’t getting rid of  clients counterintuitive to growth?”  At first glance, these questions would seem justifiable.  However, let me explain before you send over the guys with the straight jackets.  (I already have a padded room.  It’s Orange of course.)

In July of 2013, I was in Nashville attending a quarterly mastermind training.  One of the presenters was there to talk about his book, “The Pumpkin Plan.”  (Pumpkin…Orange… I was naturally intrigued.)  His name is Mike Michalowicz (pronounced mi-‘kal-o-wits).  During his presentation, I learned that, in order to grow my business, I had to “Assess The Vine” (my clients), and do some pruning.  Pruning meant I had to fire rotten clients.  I thought the same thing you are right now, “ This guy is nuts!  There’s no way I’m getting rid of clients.  I need every dollar I bring in.”  After I stopped hyperventilating, I began to really think about this concept.

Up to this point, I was operating under the mindset that quantity is what I need in order to grow.  I already had a documented sales process, and knew how to sell.  Getting more clients was the answer, right?  Nope.  I had to shift my mindset away from the quantity game, and stop killing myself for scraps.

We had a few clients that literally made my blood boil every time they would call or send in a support request.  You know the ones.  The ones that don’t really respect what you do, rarely take your advice, and then want to haggle over pennies every time you present a solution to help them grow their business or upgrade their 10 year-old Windows XP computers.  The ones that send text messages on Sunday morning because they can’t get on Facebook.  The ones that you’ve done a ton of extra work for and never billed them.  The list goes on and on.  99.9% of the time, these are the same folks that you made concessions on your initial recommendation just to get their business.  A win is a win, right?  Oh how wrong I was!

Mike’s presentation literally changed everything for me that day.  The second half of his presentation involved evaluating all of our clients by completing an Assessment Chart where we graded our clients on a variety of areas.  By the way, the clients that bring in the most $$ aren’t always your best clients.   I quickly figured out who our best clients were, and who had to go.

I could not grow my business until I pruned the vine.  Every time I said Yes to these rotten clients, I would being saying No to the good ones, or worse yet, saying No to better new clients.  This became my mission for the next few months following Mike’s presentation.  Fortunately I only had a couple to prune. It was a difficult process, but I can honestly say that once the vine was cleared of these rotten clients, my life improved dramatically.  I no longer had to dread calls, texts or emails from people who just didn’t respect me or my profession.  I could now focus all my time, effort and energy on the clients that I loved.  The ones that were an absolute joy to work with.  The ones that I wanted more of.  (Look for more on this topic in Lesson 6)  Phew!

Here are my brief takeaways on this:

  • Bad, rotten clients distract you, drain your resources and cost you money.  (Please re-read that last sentence)
  • You’re much better off having no clients than bad clients.
  • More is not better, better is better.

The Pumpkin Plan is an awesome book.  There is obviously a lot more to this process than what I’ve outlined in this post.  The book gives you much more detail on the process as well as many other strategies for growing your business.  I would definitely recommend picking up a copy.

One of my favorite quotes from the book:

Mike has since become a friend of mine, and his advice allowed me to sell my IT business last year.  He has two other books, The Toilet Paper Entrepreneur and Profit First.  You should really check them out.  Just my humble 2 cents. (Full disclosure: I don’t make a dime for recommending these books.)

Lesson 4 will cover what I call, Ruthless Productivity.  I’ll be giving away my secrets and tips for getting the most done with the fewest resources possible.

As always, I welcome any thoughts or comments below.  Until next time….

Comments

comments

Leave a comment

Your email address will not be published. Required fields are marked *