Choose your customers wisely. Perhaps this sounds like foolish advice, in tough economic times when we all want to hold on to as many customers as we can get. But if you really want to succeed as an entrepreneur, consultant, freelancer, independent contractor, or any other business that relies on serving clients, you need to be selective about who you work for.

Too many business owners feel like they can never say “no” to a customer. They run themselves ragged trying to keep people happy and putting up with nonsense, thinking that they “can’t afford to lose the business.” But the truth is: some business costs more than it’s worth. The wrong customers aren’t making you money, they’re costing you money. And worse, they’re wasting your time. They’re sapping your energy. They’re undermining the passion and conviction that you could be devoting to finding better customers and cultivating more profitable and fulfilling pursuits.

The very worst customers – the crazies, deadbeats and bitter, abusive jerks – are fortunately rare; maybe less than 1 or 2% of your customer base, if you’re lucky. But there are still many other customers that your business might be better off without. It’s the old “80-20 rule,” also known as the “Pareto Principle:” If you analyze your business, chances are that 80% of your profits come from 20% of your customers, and 80% of your problems come from 20% of your customers – and most of the time, it’s not the same 20%. You need to rigorously work to eliminate the worst 20% of your customers, and focus more of your energies on the profitable, energizing 80%.

After all, why did you decide to go into business? To take crap from angry people who don’t like your work?

No! You got into business to deliver something of value and make a difference in other people’s lives, while earning a profitable income for yourself.

Who are the customers that you should get rid of?

  • People who are slow to pay their bills. When customers are late to pay an invoice, they are effectively forcing you to give them an interest-free loan. When customers fail to pay their bills, they are taking food out of your children’s mouths. Don’t let this happen – or don’t let it happen more than once.
  • People who don’t know how to use the online order form and are always tying up your customer service phone lines. You have the right to refuse service to anyone, and you have the right to expect your customers to have a minimal level of technical savvy. Is that “fair?” Maybe not, but it’s your business.
  • People who complain all the time on Yelp (or threaten to complain). Some people can never be satisfied and are just looking to spread misery and gloom. Send them packing, lest they drag down your spirits along with them.
  • People who take too long to make decisions, costing your architecture/design/consulting firm too many unpaid hours and missed opportunities. Time is money. If you feel that a prospective customer is leading you on and making you jump through hoops, you owe it to yourself to respectfully decline the work. (From my experience, the clients that make you jump through the most hoops are the ones that never hire you.)
  • People who always want to haggle about price and won’t pay you what you’re worth. Tell them that they’re free to find a cheaper option. If you allow yourself to lose too many battles over price, it will start to affect your self-perception, undermining your confidence and dragging down your profitability.

It’s not always easy to part ways with a customer, and it’s not always a clear-cut decision. Ultimately, you need to make the decision that feels right for you: are you losing more sleep at night by keeping the customer or by letting the customer go?

Serving customers is like dating: If you’re spending your time with the “wrong people” (in business as in life), you’re missing out on a chance to find the “right people.” Here’s to finding more of the right people for your business, wherever they may be.

Are you ready to start a business and start serving more of the “right” customers for you? CorpNet can help you get in the game with resources, tools and guidance.