Don't be afraid to fire customers
When you start a business, all you can think about is getting customers, but you should think about getting GOOD customers.
This week, we had to fire one of our customers. Why? We did it for the most common reason of all--non payment. For two months we have provided service and have received no payment. We probably should have left sooner, but we have found that our chances for being paid increase if we continue service.
There were warning signs. We have been in this business long enough to know when someone will be a slow payer (or no payer) and we ignored the signs. It's winter and customers are tough to come by in the off-season.
The good news and the bad news read the same: we are only out our time. The good news being that we didn't have any out of pocket expense for parts or products. The bad news being that our time is how we make money.
Some customers are just not worth working for. You have probably dealt with these people--they are so demanding that nothing will make them happy. As self-employed people, we only have the time for this for a short while before you must tell them to take their character problem elsewhere. You don't make any money on demanding customers, because you often end up doing things for them more than once or providing extra service without charge. It's certainly OK to try to make your customers happy, but there is a limit to what you can do and still be profitable.
A wise man once told me that if we have a complaint, it is usually our fault rather than the fault of the product or service. This is very true. How many times have you bought something and it didn't perform as you had expected? The operative word here is "expected." Our expectations are often to blame when a product or service disappoints us.
Your customers are the same when they buy from you. They have expectations and they are disappointed when your service just doesn't measure up, even though their expectations may be completely unrealistic. Then your customer is unhappy, you try to fix it, and you end up with twice the time invested than normal, and may not be paid for your efforts.
As difficult as it will be to do, you must fire customers that don't bring in a profit and do it before you are in too deep. In business, customers will come and go, so concentrate your efforts on the customers that are a pleasure to work for and who will pay you on time.
Copyright © 1998-2001 Antaean Systems
All rights reserved.
