Getting Thoughtful: Fire Your Clients

When we first start out in business we tend to go out and get a bunch of clients to generate the cash flow to pay the bills. Eventually we become terribly busy, so we hire people to help us be less busy.

But then those initial projects conclude, and we've got employees to keep busy, so we go out and find more projects to keep them working.

Eventually we drop into a rut of taking every customer and project that comes along, because that's the way we've always done it. As a result:

Profits go down.

Focus disappears.

And we get miserable...

2. Vacuums attract

I believe that there's an irrevocable law in the universe that vacuums beg to be filled.

That's why when we give, we receive. When we tithe we earn more. And when we dump clients, the phone starts ringing with new ones to take their place.

When this happens it's our job to make sure that the new ones we take on are better than those we lost. We need to make sure that these new clients are

- Easier to work with
- More profitable
- On focus with where we want to go with your company
- Knowledge creators, rather than knowledge suckers (they force us as an organization to learn, to grow, and to progress in our craft, rather than just sucking out more executions of the knowledge you already have.)

But now let's consider the vacuums attract principle from a different light. It's also important to recognize that while vacuums attract, you don't always have to fill those vacancies. One option is to simply say no, to run a smaller (but since you dumped your costliest clients) more profitable and stress-free organization. Another is to shift from the way you've always done business into some other way that helps you to take your business to a new level.

For example, I've long wanted to focus more on product creation, but never had the time, because I was too busy with clients. So last year I dumped half of my clients. As a result, I have created multiple new products, which have earned me much more money than the clients were paying. The vacuum still got filled, but because I refused to fill out from the outside, my inner self stepped forward and filled it instead.

And I'm much happier as a result.

Taking Firing To Another Level

In addition to firing clients, you may want to consider:

1. Firing half your employees.

Cull out the deadwood, give those remaining 50% raises, possibly do a few new hires at a higher level and kick your entire company's intellectual and performance capacity to a higher level.

And since you've dumped the clients, you don't need those employees working for you anyway!

2. Firing half of your products/services offered.

Products cost money to stock and maintain. Services have to not only be marketed, but provided. Pareto's principle will tell you that the vast majority of your products offered are generating almost no sales, but if you were to perform a true item-based P&L analysis, you would probably find that these items actually cost you money to stock.

Dump 'em, make more money. Turn your warehouse into a basketball court for lunchtime pickup games.

3. Firing half of your systems.

If you've never been to a seminar on lean manufacturing, you need to go, even if you're not a manufacturer. There are some powerful principles there that you need to understand. One of the elements of lean manufacturing is to conduct a value chain analysis - looking at each step in the process of moving a product from raw material to the customer, and assigning both a value added and cost to each of those levels. But it goes beyond the manufacturing floor to the office and other systems in your company. Most companies find that a huge number of the systems they perform all the time add very little value, while adding tremendous cost. Just think of all the reports you create that nobody reviews, the extra setups you perform that could go away if you batched processes or streamlined the setup, the marketing programs you implement that don't actually sell anything.

4. Firing half of your projects

Most companies have a number of projects their working on that have low probability of ever paying back their investment. Fire 'em and simply stop working on them.

I fight this one all the time. I'll get a bee under my hat and want to go pursue it, without logically looking at the payback that will result. So I stay busy working on worthless projects.

I've found that there's great value in having a sensible outside person who isn't afraid to say "Don, you're being stupid. Don't do that." In fact, I heard those very words from two of my advisors in just the last 3 days! (Those are the thoughts that triggered this very article.) It takes getting past your pride and saying - "OK, I won't, even though I want to."

Try it!
Perhaps firing half of these isn't the right number. Maybe it's three quarters, maybe it's 20%. But reduction, focus, outsourcing where necessary (someone still has to handle payroll...), can work wonders for your profitability, your future, and your peace of mind.

After all, isn't work better when it's fun!?!

Tags: Productivity