Knowing When To Fire Your Client

When my business partner and I had our CPA firm, our focus was always to grow the firm. Our emphasis was to add volume with the thought that added volume would result in added revenues, which in turn would result in added profits. We learned this is not always true. With additional volume comes additional hours working, additional overhead and additional staff, each with its own costs. It also meant we would delegate tasks to others in our firm who didn't have the same vested interest in the firm's success. Clients who are accustomed to the one-to-one interaction with the owners of the firm are generally not receptive to being handed-off to a subordinate.

I often said: "The wrong gatekeeper can destroy your business". If the person you entrust to answer the phone, screen questions and greet existing and potential clients is not knowledgeable, pleasant or representative of your business, you will lose opportunities quickly.

Another lesson we learned was not all clients are profitable. Some require much more time than others without the benefit of billing for the time spent. And if billing was appropriate, not all clients paid their bills timely or at all. The domino affect of these high-maintenance clients was they take away time from the clients who are profitable and pay their bills timely.

The morale of this story is to know when to fire the non-profitable clients so you can focus on the profitable clients who deserve your time and attention. Growth is good if it is profitable, but knowing when it becomes unprofitable is better. After selling the CPA firm and becoming a Qualified Intermediary, I applied this philosophy to my business. Unlike many of my competitors whose main focus is growth, at any cost, we maintain a level of business that allows us to answer the phone, greet the clients personally, and provide the one-on-one personal service the clients expect and deserve. In the end, everyone is happy and I don't have to fire anyone!