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When my husband and I started our business in 1999, we had one credit card, two pizza boxes and a whole lot of hope.
We took any and every job we could get our hands on.
The words “specialty” and “focus” were not in our dictionary.
The point was to keep the checks coming in.
If someone had asked me who my target customer was, I probably would have said, “My whatsit who?”
My customer was exactly the type of customer that many small businesses start with: anyone who would write me a check.
But what we all learn if we’re to succeed is that growing is not so much about expanding as it is about pruning.
So whether you’ve cast a wide net and are wearing too many hats, are considering expanding your client base to grow your business, or have a nagging suspicion that your target has shifted, here are three very good signs that it’s time to cut your customers loose.
You’re Taking On Projects Outside Of Your Core Competencies
You’ve heard the phrase: just because you can doesn’t mean you should.
Early on, we did everything anyone asked us to do. Trial by fire, so to speak.
But after a while, one of two things was bound to happen:
Either we’d end up offering so many services that we’d never have the time to get good at any of them, or we’d burn ourselves out, produce crummy work and tread along clumsily until we went out of business.
So we chose a third option… we cut out the things we weren’t good at and focused on the ones we were.
That meant losing business.
That meant telling customers, “No.”
That meant saying goodbye completely to some customers so we could make room for others.
It’s a scary thing to say no to business. You’ve got to be pretty confident to turn work away that you know you can do, and even if it’s not the best work out there, it’s enough to satisfy your customer and get that check.
But if you want your business to grow you have to trim the excess.
If you continue to keep thinking that you “can” do everything, you will look back in one, five or ten years and realize you’ve been running to stand still all along. “Diversify” may work for your retirement portfolio. “Specialize” is what’s going to work for your business.
Instead of branching out, rein in your focus and aim to be the best at something.
Find the intersection between what you want to do and what you can do well.
You may find yourself looking into a hole. And that’s scary. When you say goodbye to customers there may be a lag before the space gets filled with new people.
Use that time to study and to perfect your skills. You are no longer a freelancer or simply self-employed, you are a specialist and you run a business. Resist the urge to fill in spaces with any project and seek out the right project.
This “gap filling” can happen even in established businesses when things get tough. Given the economy for the past few years, a lot of people are happy just to be working. In tough times, we may be more inclined to take on jobs that are outside of our specialties because we need the money.
I’m not going to be the person to tell you not to do that. When your business is threatened, you’re going to protect it.
But do so with the full knowledge that you’re doing it and don’t lose focus. Remember that there will be a time when you’ll need to trim again and that any temporary measures you’ve taken to keep the revenue coming in are just that – temporary. If you lose focus, you’ll lose your way and instead of pulling yourself out of a tough time, things will start to slide into a sludge of mediocrity and odd-jobs.
Your Values And Vision Don’t Align With Your Customers’
Sometimes you may take on a customer who seems great on paper. The job is within your expertise, the money is good, so you sign on the dotted line.
But there’s something vaguely wrong and you’re not sure what it is. Maybe you don’t really like your customer. You chalk it up to a personality thing.
But usually when you get those vague gut-reactions to people it’s based on something more real: a misalignment of vision and values.
If you haven’t clearly articulated your business values then it can be hard to pinpoint the problem. If that’s the case, it’s time to get out your pen and paper and think long and hard about who you are, how you conduct business and what your brand represents.
When you know that, it will be easier to spot the people who don’t align with you. Maybe the job they want you to do doesn’t fit with your image of your company. Maybe the way they conduct business doesn’t fit with your values.
As a web development company, we can build any kind of website for any type of industry. But there are some that we stay away from because they aren’t a good fit for our values.
There are also certain types of people we stay away from. People without a long-term vision… people who don’t believe in our shared mission… people who are perhaps not in sync with our business ethics.
I’d have a hard time sustaining a business relationship, for example, with someone who promoted get-rich-quick schemes and promised “six-figure income secrets”. Could I build that person’s website? Could I set up some social media accounts and find and engage with followers? Of course.
That’s where alignment comes in.
Some of this goes back to wanting the money. When you just want the job, you overlook a lot of these things. But mostly this is something that doesn’t get a lot of thought. We don’t want to put some wishy-washy emotional thing before profit.
But if you take on customers who don’t align with your purpose then you’re setting yourself up for a loss anyway. These types of customers will suck the energy out of your company, lead you down the wrong path and quite possibly damage the brand you’re trying to build or maintain.
There’s no right or wrong type of customer – only the type that’s right or wrong for you.
Here’s a good rule of thumb: imagine yourself telling your mother, best friend or a respected colleague about your customers. If there are any you aren’t proud to discuss, if there are any that make you feel uncomfortable admitting to having or if you find yourself making excuses or explaining any of your jobs, then those are probably not the right customers for you.
Your Customers Are Just Deadbeats
I’ve been in this situation, too: you find yourself working with a customer who drives you crazy, who doesn’t respond to your emails, calls, questions or deadlines, who probably pays late and hassles you about your fees… but who you keep working with anyway.
The two biggies there are missed deadlines and missed payments.
I’ve been embroiled in projects that just seem to go on forever. Maybe my customer changes his mind a hundred times. Maybe he disappears for months on end without responding to my inquiries. There is no such thing as a deadline with this person. There is only some ethereal project that may or may not get done one day.
If you’re like me, you probably stop billing this customer while he’s on hiatus. What are you going to bill for when nothing has happened?
By the time he’s ready to get back to work I’ve completely forgotten where I was and what we were supposed to be doing, but I’m obligated to keep doing it, because I said I would, and we probably have a contract dated 2009.
I’ve also been in situations where people can’t, won’t or don’t pay their bill for whatever reason. They avoid me, they make excuses, they pay in fragments instead of paying the full invoice, in odd amounts that are not even worth the ink on the check.
To compound the problem, an awful lot of deadbeats are nice people. And that’s why they get away with so much. They sweet-talk us, they at least pretend to be happy and grateful and maybe they have a sob story or two. Lots of times, except for their deadbeat status, we kind of like these people!
So we accommodate their schedules. And we let them pay on Tuesday for a hamburger today.
Some clients can be controlled by setting clear expectations, rules and consequences. But some people, let’s face it, are just deadbeats.
It’s hard to say goodbye to someone we like when it’s “just about the money”, but sometimes it’s just about the money. After all, we do have to run a business and if our customers are not paying us responsibly then we have to decide whether we are willing to run a charity or whether we need to make room for paying customers.
Even missed deadlines are about the money. Yes, they are perhaps also about a lack of respect for our time, but ultimately they’re a financial drain. There’s an inherent overhead in starting and stopping a project, figuring out where you left off, getting back into the groove of what you’re supposed to be doing.
You’ve also probably wasted a lot of time (that could have been billable) chasing down your missing customer with multiple calls, emails and pleas.
For the sake of your profits, and out of respect for those customers who are responsible and who deserve your full time and attention, you need to lose the deadbeats.
It’s Not Easy, But Someone’s Gotta Do It
Whether it’s awkward, uncomfortable or financially scary to say goodbye to customers, there are times when it’s got to be done if you want to keep your business on a path toward growth and success.
I love those long term customers as much as you – some people we work with today have been in our lives for 15 years, even before any of them had a company website (or thought it was possible!)
The reason those customers are still around is because they’ve evolved with us and we’re working with them within our specialties (and they’ve found other companies to do the things we don’t, and that’s good, too). It’s also because our businesses align and we share a common mission and vision. Finally, it’s because we act responsibly by respecting each other’s time and assets.
But we’ve said goodbye to many customers over the years. Sometimes it’s good riddance and sometimes we’re sorry to see them go. Like a plant, sometimes we have to cut away the excess growth if we want to grow even bigger and healthier.
Hard or easy, the end result is the same: for every goodbye, we make space for a new hello – not just a job or customer but the job or customer.
Have you had to say goodbye to a customer? Share your experience, too!
This post is part of the November 2012 Word Carnival — a monthly group blogging event specifically for small business owners. (It’s the most fun you’ll have all month!) Check out the rest of the fabulous carney work here.