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Business Sense

When to Break Up with a Client (and How to Do It Nicely)

No doubt, breaking up is hard to do.

Ending any relationship presents challenges. When it involves a business client, it can carry some unique risks. Yet there are ways to navigate the potential pitfalls, and, hopefully, break up in the most amicable way possible.

When to Know the Magic’s Gone

Business relationships ebb and flow. That’s perfectly normal. But when do you know you’ve reached the breaking up point? The most obvious red flag is a client that habitually doesn’t pay on time, or worse yet, not at all.

Then there are clients that repeatedly don’t return calls or are no-shows at meetings, making it stressful and challenging to get your work done.

Personality conflicts are another breakup trigger. Yes, the client is paying you. No, that doesn’t give them a free pass to be condescending, nasty or downright abusive. Everyone has a bad day now and again, but consistent poor treatment is grounds for a split.

Weighing the Pros and Cons

For most small business owners, it’s hard to walk away from money, particularly if the problems you’re having with a client aren’t financially related. Yet, it’s important to consider the big picture, and the potential upside of calling it quits.

For starters, the relationship is likely the source of considerable stress that could spill over to affect your work with other clients. Further, difficult clients tend to be needy clients, so it’s important to consider the added bandwidth you will regain to serve your other clients or drum up new business.

Be Prepared

The breakup is much easier if you have something of a prenup agreement well ahead of any conflicts.

Having a signed contract with your clients that spells out roles, responsibilities and includes reasons why the relationship can be terminated can provide you with an important paper trail if your relationship sours.

Always consult with a licensed lawyer with small business experience to develop the right contract language specific to your business. If you’re looking for some general information, Northeastern University publishes several small business contract templates that provide some good direction.

Breakup Best Practices

There’s an art to the breakup that can help make it as painless as possible. Before you drop the bad news, it can help to consult with legal counsel. A lawyer can help you review any contracts or agreements – even informal ones – to make sure you’re following any obligations or regulations that might apply to your line of work. 

Wondering where to start? These four tips can help. (Note: This is not intended to provide legal advice.)

  1. Write a script and practice it. Rehearsing with a script will help you build the confidence you need make the break calmly and reduce the chance of creating more tension. Winging it can create an emotional response during this difficult conversation. Elements of the script should be a quick summary of your initial agreement, an honest explanation of why you’re ending the relationship, and a clear statement of the final actions you intend to take to wrap up the engagement smoothly. Practice ahead of the conversation to ensure you stay on script.
  2. Give sufficient notice. No one likes to be blindsided. Aim to give your client sufficient notice, and, if possible, offer your services for a limited amount of time so they can transition to another option. If you had an existing contract or agreement, make sure you review the terms to comply with any timing requirements (for example, 10 days’ notice for breach of contract or 30 days’ notice without cause). You don’t want to burn a bridge that someday might re-open—and you do want to get paid for work completed.
  3. Get it in writing. Afterward, it’s a good idea to confirm the conversation in writing with your client so you have a time-stamped record of what you discussed. This could be as simple as a follow-up email. However, some contracts might specify that you reach out by certified mail to a specific person at a specific address. Read over any contracts or agreements you’ve signed to understand your obligations, and consult a lawyer if you need legal advice.
  4. Prepare for the worst. Some clients don’t take rejection well. The reality is that a vindictive client could clap back and attempt to damage your reputation. Stay professional and polite.Consider finding a business mentor who’s been through something similar and can provide sound advice.

Yes, breaking up is hard to do… even under the best circumstances. Yet by taking the right steps, you can focus on growing your business with the clients you love, not the ones that give you headaches.

Your business assets and ambitions evolve over time. Stay in touch with your local ERIE agent to ensure your business insurance protection stays current and continues to meet your needs.

It’s normal for business relationships to ebb and flow. But when do you know you’ve reached the breaking up point? /blog/how-to-break-up-with-a-client Erie Insurance