Know when to break up
Small business owners go into business with the mindset of finding new customers and keeping them. As an independent contract or small business, sometimes you have to know when to do the opposite. Firing customers is a challenging decision and one that many small businesses fail to recognize as an option. Toxic relationships in business can damage a company’s ability to grow and destroy morale. Let’s talk about how to recognize when to move on.
What qualifies as “Bad Business”?
Let’s start by talking about what makes for “bad business” and then we can share some examples and possibly share a few solutions.
As a business, your goal is to make money. If you’re defining your business in some other manner, you may want to step back and reevaluate what you’re really doing. You’re not a charity, you go to work to earn a living and to support yourself and probably a family. Bad business doesn’t always mean that you’re doing work for people that don’t pay or don’t pay enough. Sometimes it means doing work for customers that are toxic or that dominate your time to such an extent that it harms other business relationships.
I had a customer for a while that wanted me to serve as an advisor. Normally, I would say trusted advisor but this customer proved to me time and again that trust was not involved. Over the course of several years, we had countless meetings where my input was requested, and then explicitly ignored. This may sound odd as I was being paid to serve in a consulting role, but it happened time and time again.
So why is this bad when the customer is paying? There are a number of reasons. First, there is a lack of respect and trust. Of course, you don’t expect your advice to be heard 100% of the time. But when you serve in a consulting role, you anticipate being heard at least a good portion of the time. This time of situation undermines your credibility, leads to frustration and can result in a loss of confidence. This was a toxic relationship and it was one I wish I’d walked away from far sooner than I did.
In another situation, I was contracted to perform work for a company under a monthly service contract. The amount they were offering was far too good of a deal to walk away from, even though I was skeptical of them as a business partner. Over the first several months, my check began showing up later and later. A conversation with the customer would resolve the issue for a short time only to have a recurrence of the situation in short order. This is a bad business situation if there ever was one.
Finally, I had a customer that was so friendly it was almost painful to be around them. They paid promptly and enthusiastically. Every time we showed up they had a smile on their face and often met us at the door with cookies. The problem was that they had never-ending problems we couldn’t resolve. The issues were never large and often consisted of unplugging a printer and moving the cable or resetting wireless passwords. This isn’t a toxic relationship, but it is bad business because you are unable to generate the level of revenue you need to keep an office open and pay employees. You would be doing this person a disservice by billing them the true amount it would take to justify continuing to do the work.
So what do you do?
This is where it gets really tough to run a business. At least it was for me. Delivering bad news or dealing with conflict is something I absolutely hate. I avoid it and often find myself letting situations fester. I have grown enough as a business person to recognize that after all these years, but that doesn’t make dealing with these types of situations any more fun.
First, build relationships and make sure you have great lines of communication. In the first scenario, I actually confronted my counterpart at the company about my feelings and received an assurance that they did indeed value my opinion. So much so that they kept paying my monthly support contract. When it became apparent that nothing had changed, I terminated the relationship. This is difficult, especially when a customer is paying you well. My recommendation is to value your own mental health, shift the relationship to a co-worker if that is a possibility and to walk away if you have to. Remember, if you don’t take care of yourself, you can’t take care of anyone else.
Secondly, walk away from bad business, no matter how enticing it may be to stay. Don’t allow someone to beat you, walk on you or cheat you. At some point, that bad customer is going to burn you. Over the course of 20 years, I dodged more bullets than I can count and only ate bad debt a handful of times. If you stick around with an abuser, you’re going to eventually lose. My advice is run, don’t walk and never look back.
Finally, when a customer has the potential to be a good customer, help them to be one. Teach them proper etiquette, set boundaries and determine what is a reasonable (and profitable) way to interact. Maybe you have them bring the issue to you or pass the work to a junior technician that you’re mentoring. Perhaps you require them to build lists and exceed a certain number of problems before you will engage. The key here is that you can’t step over dollars to pick up loose change, no matter how shiny it is.
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