Everything You Need To Know About Firing Clients

firing-clients

Are you a coach or a consultant, or do you run an agency?

Those seem to be the “hot” thing to be these days. You see info products and tons of online training showing you how to help local businesses with their marketing and how to get more clients in the door.

It might seem sexy and appealing from the sound of having high monthly retainers of $1,000+ per month and being able to work from home.

Trust me, there are some major upsides, but there are some darrrrrrrrrk dark, PITCH BLACK dark downsides that people aren’t talking about. Everyone wants to talk about how to make money working with clients online, but how many of those ads talk about the harsh reality of firing clients?

Matt and I originally started Evergreen Profits as a marketing agency.

We had a bunch of knowledge that we knew could help people who wanted to pay us a lot of money. Cool!

We always had the mindset to charge what we’re worth, so we had no problem going out there and pitching $10,000 upfront packages with a percentage of their business. We had many agree to it and we were flying high.

Beers were on us for all of our friends!

We also had clients for one-off projects of $1,000+ and various clients paying us $5,000 on a monthly basis. These were nice because it always covered our monthly nut. We got to pay ourselves what we wanted (for the most part) and we got pretty comfortable.

We soon realized that we stalled out on our bigger vision as a company.

We’ve always wanted to provide more training (and entertainment) to more people than one-on-ones.

We also wanted to grow bigger wealth for ourselves outside of client projects. We also didn’t want to have a big team and an office – all leading to monster overhead costs and less money in our pockets.

No thanks.

So after realizing that we were kind of stuck, we had to take a hard look at our agency model and how we can get out of it.

In other words, we needed to figure out how to take what we’re doing as an agency and create a business where we can do our own thing and help more people.

This is how the Evergreen Profits Letter was born, the Hustle & Flowchart podcast, our Evergreen Wisdom book, our Masterclass, and many other products and content.

Let’s get back to you… I’m sure you’ve had or have clients.

These could be one-off clients helping them with writing email copy, or consulting businesses on growing their web traffic, or mowing lawns for people. Whatever it is, you’ve most likely had clients of some sort.

From our experience from years of working with clients (good and bad ones, ones that paid us a lot, and some not so much), here is why clients are GOOD.

Before we talk about firing clients, we’ll start with this one to show you why we wanted clients in the first place (and why you should, too).

 

Four things to consider when firing clients

You can use the initial money you make as seed money

Instead of taking on any loans or investors, we had to frame clients and the money that we received from them as seed money to grow the business that we really wanted to create.

Instead of just paying ourselves more if we landed a big project, we would instead pay ourselves what we needed and reinvested the rest into things that we can grow our bigger vision.

We allocated money to content writers, video production people, Facebook ads, and other things to start growing our email list and web traffic to prep to eventually have the ability to start firing clients.

Don’t get comfortable with client work.

It’s so easy to just bank the money and feel like it’ll always be there.

Being complacent will kill you because that monthly retainer can (and will) get pulled with a day or two notice.

Use the money to build your vision, you deserve it.

 

Get results in many niches before firing clients

This is one of the cooler things about having clients.

You’ll start to learn all about niches that you probably never had thought about. You’ll understand what kind of odd products people are buying, how much money can be made in a niche, and learn which niches to stay away from.

This is great if you ever want to start a business in one of these niches.

The other big benefit is that you’ll get results from all of the work you do.

You should record your results (screenshots, screen capture videos, written). Hold on to these.

You can use them to market yourself to new clients now to grow that side of the business or save them until you have a product to sell to the masses.

We use a variety of case studies and examples in our webinar for the Masterclass.

They will immediately grow your credibility to your future customers.

 

You can test new strategies while getting paid for it

We definitely took advantage of this.

Every client has different wants and needs.

Even though our agency focused on content marketing (writing blogs, emails, lead generation), we had clients that wanted us to outreach to get them on TV shows, or to do SEO, or to do animation/video production, or create sales page designs.

We didn’t always accept the work that wasn’t in our wheelhouse, but we definitely did for tasks that we wanted to learn more or test in the real-world.

For example, we had a client that wanted to get rid of some bad press about their business. The bad press was on the first page of Google for their keyword and they wanted to outrank it to push it down. We didn’t know much about how to SEO quickly, so we tried some new things.

We soon learned that if we did a mix of targeted blog posts, did press releases, repurposed content into videos on YouTube and Vimeo, repurposed content into PDFs on sites like SlideShare, and then we pointed all of those links back to the main website, we started to rank… QUICK.

We charged the client for every single thing we did, but it got them results.

It was a win-win: they ranked higher than the bad press and we were able to charge more for our monthly services which allowed Matt and I to talk about firing clients sooner.

 

It's a quick way to start up a business

Here’s how we grew Evergreen Profits (the agency) into a business that was pulling in almost $20k/month with just a handful of clients.

We talked to a few friends of ours who have agencies of different types (one was a branding agency, another focused on creating sales funnels, another was a consultant to big businesses). We positioned ourselves as a marketing agency that could solve a need that their clients had but our friends couldn’t fill.

So we were the marketing experts and they would send us their clients. That’s leverage, baby! It also helped them avoid firing clients who would take their needs to a larger agency they felt could handle it all for them.

We were usually white-labeled under their agency (just to not confuse their client). We were their marketing team and they just paid us after getting paid by their client.

It was an awesome way to quickly get clients and not have to try and win over clients with expensive marketing.

We went to people that already trusted us, they then sold our services to people that already trusted them, then plugged us into the picture. Happy days!

So that’s the good side of running an agency. But here’s the DARK SIDE and why we now don’t have a single client.

 

Here is why you should start firing your clients (slowly):
You have a boss

If you’re working for a client, you have a boss (often multiple).

Not only will one person be calling and emailing you, you’ll most likely have their team members, other vendors, and accountants all contacting you. Pretty soon your time and attention will get dictated by these people, leaving you scratching your head wondering where your day went.

You’ll constantly have to answer to others and play by their rules. You’re not driving the ship, they are.

This is the first reason why you should start firing your clients.

In a way, you just created an elaborate job for yourself.

People might call you an “entrepreneur”, but you’re not. You’re not really taking much of a risk, other than being a yes man or woman to make sure that you get paid (you don’t want to piss off your client and have them be slow to pay you!)

The second you fire your clients and you set up shop for yourself, then you’re a true entrepreneur calling the shots. Until then, you’re not.

 

No real control over direction and end results

Imagine, you prepare a well-thought out proposal for a client that you know will bring them great results.

But, you quickly realize that 99% of clients have their own agenda. They’ve done research and have their own ideas of what will help their business. Or, they might not be willing to give you the budget you’re asking for, so you have to greatly modify your offering.

At the end of the day, clients really don't know what they want.

We’ve had many clients where we fully understand their problem and then we map out a perfect solution for them. Our solutions were always based off of previous positive results.

Clients typically ignored them and just said to do what they thought was best. This often left both sides frustrated. They didn’t get their desired results, and we knew there was a better way.

This is the second reason why you should fire your clients.

If you’re running your own business with products and offerings, you are running the ship.

If you’re not getting great results, that’s on you. If you’re getting great results, you should celebrate, because you made it happen.

 

firing-clients

Getting fired for great results

There’s a known thing in the agency world that has always stuck with me and bit us in the ass with one of our last clients.

Which is another solid reason to consider firing clients.

“If the original person who hires you leaves the company, then you’re most likely fired.”

For example, if your client is a doctor’s office and you’re trying to get them more leads, the person who most likely had the biggest influence in getting you hired is the office manager or a marketing person at the office.

When/if that person ever leaves, they are replaced with someone who has their own agenda and personal contacts.

They want to make an impact to their new employer (the doctor), so they’re going to refer their own people (maybe it’s to reduce costs, or maybe it’s just to get someone they know a gig).

Either way, if that person is in control of your position with the company, you’re toast. It doesn’t matter if you’re bringing in solid results and other people on the team like you.

Our experience shows that if the person who originally hires you leaves, you’re on the chopping block, so be ready.

Which leads us to the next reason why you should get ready to start firing clients.

 

Growth potential is limited by your retainer

I’m sure you remember the days when you worked for someone else as an employee. Getting a raise was nearly impossible!

You either had to wait it out or you had to be really proactive and justify your added value to the company or just happen to catch them on a good day (good luck with that).

It’s actually tougher when you are a consultant of a client.

Once you ink the deal with the client, your retainer or billing rate is pretty sealed in.

It doesn’t matter if you need to hire more people on your team, or if your costs to deliver the service are going up, or if you just feel like you’re worth more.

And if you want to offer additional services to a client based off of their needs, that’s great, but you’re still stuck.

The client already has a number in mind of what you’re worth.

So if you try to add new services at a higher rate or try to increase the price to squeeze out more profit, they’ll likely smell a rat and deny you.

This is one of the more stressful reasons why you should consider firing clients.

What if you bring some amazing results to their business? You’re still stuck at your original retainer.

Unless you’ve agreed to have a percentage of growth baked into your agreement, you won’t be seeing any additional payments for your good work.

The key here is to:

  • a) charge a retainer amount with enough profit to make you happy (knowing that you might be stuck with it for years)
  • b) try to create an agreement where you are going to get a percentage of sales you brought in or a percentage of growth based on your results.

So start gearing up an action plan to start firing clients.

 

You can't control cash flow

We’re going to end on this one because it was the absolute worst part of having clients.

A lack of cashflow can put an end to a business quick!

Unless you have 4-6 months of saved income to supplement your normal income, then you’re not in a safe place when cashflow gets tight.

Having a monthly retainer of $5k might sound sexy, but there’s another side to the story when a client is very slow to pay you.

Even though you’ve invoiced a client, there’s nothing to say that they’ll drag their feet paying your bill because they have higher priority payments.

We experienced way too many clients dragging out payments by a few weeks or even seven months! Just think about what that does to your business and life!

You’ll soon be buying all groceries from the 99 cent store, you’ll have mad team members because you aren’t able to pay them, and you might be late on your mortgage or rent.

Side note: We’ve always paid our team before paying ourselves. We’re big believers that we’re supposed to take this burden and not our team. This is why we’ve worked with some of the same team members for over six years. If it wasn’t for them, we wouldn’t even be in business.

It’s almost guaranteed that if you are working with clients, you will have to play the role of being a “collection agency”.

You’ll have to send emails with creative subject lines to makes sure they open it, you’ll have to leave voicemails hoping they’ll call you back, and finally have those awkward/pestering conversations. It’s a pain in the ass and it’s stressful.

Yes, you might be thinking, “Just find clients that you trust and won’t jerk you around!”

Trust me, we have 🙂 Even the “best” clients will make excuses for delays or will say it’s “company policy” to wait 30 days to issue payment or some other BS.

There’s no way around it, you’ll run into a time where payments stall out and you’ll be penny-pinching, no matter how much you’re charging your client.

Now, you might be wondering, “Crap, I have a bunch of clients, what do I do now?”

We’re glad you asked, young grasshopper 🙂

 

You have a couple of options from here:

  1. Keep going down the client route and build out smarter systems/ways of working with clients.
  2. Start to ween off of clients and shift into creating your own products/content.
  3. Figure out what you want our of your business and most importantly, what motivates you.

Thinking about firing clients? Consider this.

We don’t want to totally isolate you if you have a really good client business or just don’t want to change your business. That’s okay!

So here are some alternatives on how to prevent pitfalls in your agency and work smarter:

  • Fixing the time suck problem: Make sure you’re automating and outsourcing as much as humanly possible. Start training your client that you’re only available during specific times (maybe it’s just certain days). Start time-blocking your days so you can be the most productive and still leave time to grow your business.
  • Make yourself indispensable: This helps solve the high possibility of getting fired. Offer proprietary systems to your clients (showing key data points, using your software/system to schedule tasks, delivery of your service). Make these systems as part of your offering, so if they fire you, they’ll also lose these time-saving/valuable systems. In addition, make sure you are always trying to diversify your business by having some internal, non-client, projects.
  • Increase your profit without increasing your retainer: Same solution as the time suck solution. Start automating repetitive tasks, outsource to free up your time, hire a project manager, protect your personal time.
  • More strategies for increased growth: Make sure you structure your deals with periodic re-assessment phases. For example, every quarter, review results and offer new services or value to up the retainer. Alternatively, structure deals so that you get a piece of the upside… I.E. 5% of increased sales since we came on board.
  • Prevent chasing people for payment: Always get at least 50% upfront. As you’re more established and have a good reputation, demand 100% upfront to even get started with some sort of risk-reversal guarantee on the results that you create. You can also structure in penalty payments on the initial contract. 50% due to start and the final 50% due upon completion. For each day a final payment is late, an interest charge of x% of the balance will be added to the invoice price.

 

Another thing to consider before firing clients

Here are some steps you can take to start weening off the teet of the client income. These are the steps that we took to move from full-time agency to full-time publishers of our own content and products:

  • Create a 5-year vision for yourself. Look out and see where you want to be in five years. What makes you really happy and stoked to work every day? Do you want to be on the phone less? Do you want to give more value to more people?
  • Decide how to achieve your vision. Does working with clients fit into your 5-year vision? Great! Stick with your agency work then. But if it doesn’t fit, then figure out what business model is best and what you will sell.
  • Time block & burn the midnight oil. If you decided to drop the client work, then you need to start transitioning to your new business model. Start time blocking (about two-thirds working on agency work and one-third working on the new business). Work longer hours, if necessary. The key is to get the ball moving with your new projects while still delivering on your promises to your current clients.
  • Reinvest & budget. If you’re serious, you should start putting away 10% or so of any client earnings you bring in. That 10% you’ll save will allow you to hire necessary outsourcers, buy paid ads for traffic, or software that you’ll need to start your new business.
  • Complete any one-off client projects and don’t take any more on. This is the quickest way to free up your time with clients. Make it your top priority to complete these projects before you start firing your monthly retainer clients.
  • Fire your worst retainer client first. You know which client you dread working with. It’s time to drop ‘em! Make it clear that you are re-prioritizing your time and how you do business. Find a good replacement for your client to use in your place. Make the transition to this new agency a smooth one so there are no outstanding issues once you’re gone. Just make sure you get paid for your time and you give your client enough notice so they aren’t blindsided. You still want good standing with them! Just make sure they aren’t paying 80% of your monthly revenue! If they are, then start shaving off services bit by bit. This is a good way to free up time and costs.

Keep building up your new business and weaning off clients. It pretty much rinse and repeat from here.

Don’t make any drastic moves to fire all of your clients.

You don’t want to be left high and dry with no income and high hopes!

It took Matt and me about eight months to fully make the transition from agency to publisher, so don’t rush it.

 

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