THE BLOG
07/28/2011 11:53 am ET | Updated Sep 27, 2011

3 Bad Small Business Clients And When To Fire Them

"What are you, stupid? I just explained that to you." No, not a line from a novel about a bad boyfriend, but a real live comment a client (or former client, I should tell you from the onset) said to me when I respectfully questioned his reasoning on a marketing message he was using in his small business branding.

Admittedly, this is an extreme example of bad behavior, but every entrepreneur has faced a problem client at one time or another. These challenging customers can drain your energy, suck up your time and even sap your enthusiasm for running your small business.

It really comes down to the classic 80/20 rule: 20 percent of your clients will cause you 80 percent of the grief in your business. Smart small business owners know how to identify trouble clients right away, head off problems early on and, when necessary, cut their losses.

Here are just three types of bad clients a small business may want to send packing:

The Constant Complainer: These are the clients for whom you move heaven and earth, and they still aren't happy. You deliver on budget, on time and on what you promised, but they always seem to find something wrong. Worse yet, they never acknowledge you for what you have produced or the professional way with which you provide it. If this sounds familiar, there may be a gap between what you can deliver and their expectations.

Begin by sitting down and speaking with them about their exact expectations and where they don't feel you are living up to them. If, in the course of the conversation, you discover that their expectations are unrealistic, or something you can't deliver on, be straight. Once you know the criteria they are measuring you against, perform to it.

If you do meet their expectations, and they are still unsatisfied -- cut your losses and let them go. Try saying: "We've worked together for a while now and you still seem to be dissatisfied with the job I'm doing for you. I've tried my best to meet your expectations, but at this point, I think maybe we're not a good match and you might be happier working with someone else."

The Nickel and Dimer: Have you noticed that, while some clients settle on a fair rate with you and then move on to the business of working together, others constantly bring up your pricing and question each charge, no matter how small?

It's one thing to negotiate a discounted rate for a client who brings in big business, but it's another to be nickeled and dimed to death.

In my experience consulting with small businesses, it's often the case that the clients who pay the lowest rate are the ones who are the biggest pain and the least loyal. If you're in a constant battle over cash, don't over-explain or argue your position, just simply and politely tell the person, "I'm sorry, but I just can't do what you want for that price."

A variation on this type is The Late Payer. All clients may from time to time be slow in paying, but customers who repeatedly pay late, promise to send you a check by a certain time and don't or outright stiff you -- are not worth keeping. Professionals get paid for the work they do, period.

The My Way Or The Highway: Nothing is more frustrating than being hired to help your client achieve their objectives and having your well-meaning and professional advice ignored time and time again. Clients who insist on doing things their way, don't take your suggestions to heart, argue with you at every turn and then complain when they don't get the results they want are bad clients. Try saying: "I'm feeling frustrated that you don't seem to take to heart the professional advice you are paying me to give you, and I think it might be better for you to hire someone whose opinion and expertise you feel more comfortable with."

No small business will be without challenging clients, but it's important to separate the occasional misunderstandings and missteps with essentially good clients from the bad ones. While it's never fun to fire a client, holding on to bad ones can carry a huge opportunity cost. The emotional, physical, mental and even spiritual drain of a bad client can keep you from having the small business you want.

The next time you see a client's name pop up on your PDA or e-mail inbox and find yourself thinking, "Uh oh, what's wrong now?" it might be time to tell the truth and take the risk to get rid of them. Who knows, you might just take back enough of your time and energy to create some great new professional relationships.

Have you fired a bad client recently? How did it go?

This article originally appeared at Xero.com, online accounting software for small business.

Karen Leland is a freelance journalist, best-selling author and president of Sterling Marketing Group where she helps businesses negotiate the wired world of today's media landscape -- social and otherwise. For questions or comments, please contact her at kleland@scgtraining.com.