How to Fire a Client: Why, When, and How to Do It Professionally

To run a successful business, you need clients who appreciate what you do and compensate you appropriately. Unfortunately, some clients won’t fit the bill. And while it’s always a good idea to do what you can to repair the relationship, sometimes you simply must make the tough call and let them go.

No matter how frustrating or infuriating a client can be, firing a client is rarely easy. To help you out, here are a few tips on why, when, and how to fire a client professionally.

When It’s Time to Fire a Client

As a business owner, have likely put a lot of time, effort, and money into networking and marketing to grow the client base for your business and into keeping your existing clients happy.

Before firing a client, consider whether better communication, managing expectations, or leveraging technology to make it easier to work together can turn the relationship around.

Set up a meeting with your problem client to reset the relationship with a new contract or new processes. Explain the situation diplomatically by saying something like, “I’ve been reviewing what is and isn’t working, and here’s how I believe we can work together more efficiently.”

If better communication and a relationship reset don’t work, you’ll at least know you gave it your best effort.

3 Types of Nightmare Clients to Let Go

These clients can end up harming your business. It’s probably time to end the client relationship if you find you are dealing with:

1. Clients who are dishonest
2. Clients who cost more time and effort than they bring into the business
3. Clients who are abusive to you or your team members

Whatever you do, never fire a client when you’re angry. If you have a heated conversation with a difficult client, sleep on it before making any rash decisions.

How to Fire a Client the Right Way

Once you’ve decided a client isn’t worth keeping, why does it matter how you give them the ax? One big reason is that people talk. According to an American Express survey, on average, customers tell 9 people about good experiences they had with a business. Yet, they tell nearly twice as many (16 people) about a bad experience.

So being rude to a client—even one you hope to never deal with again—can inadvertently tarnish your reputation and prevent you from getting opportunities with other, better clients later.

Here are a few considerate and professional ways to end the client relationship:

Finish Any Work in Progress

Whenever possible, don’t leave a client in the lurch. When your contract is up for renewal, or you’ve completed the agreed-upon deliverable, this is the perfect time to wind down the engagement.

Then, if they need further assistance, refer them elsewhere.

Put It in Writing

Normally, it’s best to have tough conversations with clients in person or on the phone. But when it comes to firing a client, email is usually the way to go.

Email serves two purposes: it doesn’t put the client on the spot, and it puts your decision in writing so the client can’t argue about what was said later.

If you’re not sure what to write, adapt the sample scripts below to fit your situation.

The Polite Bow-Out

This script is honest and polite, for when it’s clear that you and the client agree that you’re not able to meet their needs.

Dear {Client Name},

I’ve really appreciated the opportunity to work with you over the past 6 months. Unfortunately, after giving it some thought, I’ve concluded that we’re not the best business to meet your needs.

This wasn’t an easy decision, but I believe it’s important that you have the best partner for you, who is on the same page with your vision and expectations.

If you’d like, I can connect you with someone in my network who might be a better fit.

The Excuse

Use this script when a client is a pain to deal with, but it would be rude to say so.

Dear {Client Name},

It’s been an honor to work with you for the past two years. Unfortunately, I’ve been evaluating my business over the past few months, and I’ve decided to move in a new direction.

As a result, I need to let go of a few clients, and I will no longer be able to serve you as of {date}.

I appreciate your understanding as I embark on this new phase of my business. I’d be happy to help you find a new partner who can give your business the attention it deserves.

The Collection Letter

Use this script when you’re firing a client because they’re not paying their bills.

Dear {Client Name},

I wanted to let you know that as of {date}, I will no longer be able to continue serving you.

Before we part ways, I will wrap up the project we have on the schedule for this month. Attached is an invoice for your final balance.

I appreciate the opportunity to work with you and wish you all the best in your future endeavors.

Follow Up with a Phone Call

Give the client a call after your email to make sure the client read it and understands that you won’t be working together anymore.

This is also a good opportunity to discuss the next steps, such as returning any necessary files, collecting an outstanding balance, or referring them elsewhere.

How to Avoid Bad Clients

The best way to deal with a problem client is to avoid working with them in the first place. The longer you’re in business, the better you’ll get at recognizing problem clients and winning your dream clients.

In the meantime, these tips should help you avoid them.

Consider Whether You’re the Problem

“It’s not you, it’s me” isn’t just for romantic breakups. Take an honest look at how you’re dealing with clients to see if something you are doing (or not doing) is setting up your client relationships for failure.

If you’re disorganized and struggle with timely communications, check out tools that can help you get a handle on your workflows.

For example, you can organize your client deliverables in a good project management tool like Asana or use FreshBooks to get your invoicing in line with friendly and regular payment reminders, easy payment options, and the ability to view proposals and collaborate on projects.

Create Client Acceptance Criteria

You can’t be all things to all people, so get clear about whom you want to work with and only take on clients who fit your “ideal client” criteria. For example, you might only want to work with clients in a certain niche or those with gross revenues over a certain amount.

Watch Out for Red Flags

It can be easy to overlook red flags when you’re focused on winning new business. But beware of clients who aggressively haggle over your fees, seem disorganized and unresponsive, or are rude and demeaning before you even begin working together.

Clients who treat you poorly before officially hiring you are unlikely to improve their behavior later on.

Rank Your Referral Sources

Have several difficult clients come from the same referral partner? If so, one of your competitors may be referring all of their problem clients to you! Consider whether you want to accept any new referrals from that source in the future.

Provide Clear, Upfront Communication

Have a good client contract that clearly outlines your scope of work, fees, and what happens if the client doesn’t hold up their end of the bargain. Explaining your processes and expectations to the client before signing the contract ensures you’re on the same page and prevents a lot of misunderstandings down the line.

Every business has to deal with a difficult client from time to time, and firing a client is never easy. Still, it’s better to get rid of a problem client than to waste time you could be spending serving good clients or networking to find new clients who do value your services.

Better clients are out there, so fire the clients who are holding your business back. It will benefit your business in the long run.