The Courage to Say No to a Bad Fit Client

say no to bad clients

Warning Signs of a Bad Fit

Last year I was referred to a prospective client I’ll call Rich who “desperately” (according to him) needed monthly accounting help. He is the franchisee of a pretty established home services company, and his business was taking off, and he couldn’t keep up with the bookkeeping. Further, he had royalty reports to file every month, and he wasn’t sure they were correct.

I went over to his house on his “administrative day,” the day each week he devoted to all the administrative tasks for his business. He greeted me at the door, and immediately after I walked in, I saw the problem. The dining room table was almost completely covered—end to end—with papers: proposals, contracts, brochures, bank records, invoices, bills. If we hadn’t been talking we probably would have heard the table groaning under the weight.

“It’s something, isn’t it?” he observed.

“Yes,” I agreed, wondering what this scene would look like without an “administrative day” each week. “I guess your wife has given up on having anyone over for dinner,” I added.

Every one of the chairs, except the one he had gotten up from to answer the door, had a stack of papers. After clearing a place for me to sit down, we started talking about his business.

Don't Rush Pricing

I did what I always do with a prospective client:  ask the questions necessary to get to know that owner as an individual, and then also to understand the business. Then I tried to ask the questions necessary to understand the problem and see if the needs of this client fit the solutions I offered. He was a talker, and before I knew it I had been there over two hours.

After all that time, I still didn’t know how deep this guy’s black hole of accounting was, and I could see the clock ticking and that I may be late to my next appointment.

I pulled a figure out of the air which I thought would cover the clean-up job it would take to get him up to date. “Wow,” he said as his eyes widened. “You think it will cost that much?”

I explained all the work we would have to do to get everything up to date. We’d have a lot of back and forth we would have to go through to get his expenses categorized correctly. Unfortunately, his franchisor wasn't doing him any favors: his invoicing was paper-based.

“There’s a lot of work to get this cleaned up,” I said.

He released a long sigh, and slowly his eyes went from stack to stack, all the way to the far end of the table from where he was sitting.

“OK,” he finally said. “Meet me here next week at the same time and bring an agreement for me to sign. Let’s get going.”

I shook hands with him and walked out the door. On the way to my car, I thought how it would now be a bit easier to explain to my next appointment why I was a few minutes late.

Heed the Red Flag

The following week, I sent Rich an email to confirm the meeting time we’d agreed to. Just a few minutes after I sent the email, he called me.

“John, please remind me why we are meeting tomorrow.”

I suppressed my first reaction of, “Are you kidding me?” I could see, though, a huge red warning flag flapping in the wind running through my head.

I went on to remind him that he had asked me to come back with an engagement agreement so we could get moving on his books and get everything caught up.

“About that,” he said. "I’ve been talking to a $20 an hour bookkeeper, and . . . " What he said after that really didn’t sink in, as I completely glazed over.

After he stopped, I took a breath and then made the one correct move I made in this entire affair.

Summon the Courage to Say "No"

“You know what I think you need to do, Rich? You need to go with the $20 an hour bookkeeper,” I said. “You and I are not a good fit.”

“WHAT?!?,” he exclaimed, “what do you mean?”

I went on to add that it was clear that a low price was really his only consideration. Further, I explained, I was a professional and my charge was worth it. I would deliver more value to him in helping him better operate his business and make more money. I could bring my network to bear on his business, helping him make connections which would build his business and provide a healthy return on his investment with me.

Eventually, I wished him well in his business, and we said our goodbyes.

Find the Right Client Fit

In reflecting on this situation, there were several big mistakes I made:

  • I didn’t ask the right questions necessary to understand this owner. I totally mishandled the interview process—letting him talk too much—without me getting in enough of the right questions to really understand whether he might be so price sensitive that it wouldn’t be a good fit. Asking good questions is crucial in an initial client interview.
  • I didn’t control the initial interview. I let him talk way too much without naturally leading him—with good questions—through the problems he had, my solutions to those problems, and what value I could bring to his business. When I realized how long we’d been talking, it was too late to rescue the situation.
  • I did not fully explain my value to this client in our first meeting. If I’d been successful at this, one of two things would have happened. He would have either understood my value and the price I asked, or he would have revealed in his reactions that price was really his first consideration. I never got the conversation to this key point, as I let my anxiety about the clock ticking rapidly toward my next appointment, dictate what I said.

The one thing I did correctly? I had the courage to say no, and didn’t waste any more time on the situation. He needed to be free to pursue what he wanted, and I obviously needed to move on myself.

To be a successful solopreneur, you have to learn how to say no to clients who are not good fits for you. Even if you think you need the revenue—and your spouse tells you that you do—you may be saying yes to a situation which will end up causing you much more trouble, money, and time than you ever imagined. Because you are so drained by a client who’s not a good match for you, you may lose out on other opportunities which are right around the corner. Finally, this bad-fit client may start referring other clients just like him!

Your business is just that—a business—not a hobby. If you have a hobby, you may have time for everyone who has an interest in you. To run a successful business, you must learn to recognize clients who are ideal for you, and have the courage to say no to those who aren't.

Photo by: Diego Medrano

Through Ray Business Advisors and BookKeeping Express of Greater Atlanta, John works with entrepreneurs to remove accounting frustration, improve profitability, increase the long-term value of their business, and lower the stress of business ownership.

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