How to Fire a customer? - Jim

Jim_47

I need an opinion and I just know I will get one here.
I have a 1-1/2 man shop now for over 8 years. A 1/2 man is my son who will be going away to school this fall. I have ONE large account that is almost impossible to handle by myself and the rest of my business is almost all residential. The large account grosses $3-5K per year and does not make up a significant percentage of my income,Although time wise though it takes up alot. Annual cleanings take from 4-6 hours per building. The number of residents per building, (mostly elderly) require me to make any service call there a priority. In the past there have been problems that require the owner to make a decision and he always chooses the cheap way out. Seldom is it one of my suggestions, usually one of his own ideas.
Without this account I can handle the entire business without my son. With this account I will have to hire another part time helper. Also in the past I have had to increase my liability insurance just to cover these buildings, I am at this point again, due to real estate and building values increasing.
Here is the question: Should I hire a part time guy or fire the customer? How would you politely word the letter?
thanks

John Felciano

Why

fire them? Sell or give the account away???This way you leave on good terms.

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[Deleted User]

i would let the account go

the 3-5 thousand you make from it doesn't come close to covering your employee expenses. as for how to go about it, the truth works best..be polite... recommend they call so and so heating co. cause your son is leaving for school and you can no longer handle the volumn of work anymore. i would line up a friend in the business to take it over if possible. thats what i did with some old plumbing accounts.

Mad Dog

Dump him now!!!!

your time will be better spent concentrated on residential...for the small pittance you make from this account is it really worth it???? Mad Dog

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hr

Divide the gross

moneys from that account by the number of hours you devote to it, including admin time. (minus parts and markup of course) Are you sure you want to give THAT to a friend? Raise the rates to a make money range, he may surprise you, or market your skills to someone that will pay the true value. There are plenty out there

hot rod

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Bill_14

Have you

simply thought of raising your rates so that any and all jobs are totally worthwhile doing? Why give up a customer if he pays his bills. Maybe you are working too cheap??

Think positive and look at the big picture...set a goal to hire a technician, helper or whatever and start doing a little more work volume. Who knows, one day you could be laid up with an illness, etc. and you might want to have someone trained to pay some bills. Heck, you might even be able to take some time off to visit your son in school.

Good luck, but think twice about "losing ground".

Bill russell

Jim_47

The problem here is a triple whammy.
1)I FEEL that I have to greatly increase my liability insurance to cover these buildings replacement at todays real estate prices, (we have experienced a very large increase in housing costs here recently)
2) Its not the man hours as much as it is a 2 man job. Looking at the shear size of things.
3) He has been cheaping out a little to often lately.
Yes he pays his bills.
thanks for the insite guys, in keeping him and dumping him or passing him along.

Doug Wagoner

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read this week's analysis of what it cost to acquire a new customer as opposed to what it cost to retain a old customer. Your decision will become easier. Your customer understands rising insurance rates and the cost of doing business. He also knows when he is getting a deal otherwise he would have found someone else. Good service is not tangable but everyone knows when they have had it. It is the invisible glue that keeps customers coming back to the familiar and most will pay a premium for it. So smile, raise your prices and expand your business.

Bill_14

Don't just \"raise\" your prices

as it sounded like I was advising above. You need to increase your rates based on your costs of doing business. All of us are experiencing higher insurance premiums and/or increased coverage's. You simply have to pass all of these costs through.

If you need help with any of this analysis, I am sure there are many folks on the Wall that can offer great advice. Your bookkeeper or CPA could help you also.

The main thing is don't just arbitrarily raise your prices...be able to back the increase up with facts that relate to your specific business operation.

Even if you decide to let this customer go, you should go through this procedure. Remember though that "work begets work" and hiring another man will allow you to enjoy many other business opportunities.

Bill Russell