Small business owners often must say no to customers - and even fire them
by Joyce M. Rosenberg
Associated Press

The idea of saying no to a customer or client may seem unthinkable for a new small business owner. Turn down business? Get rid of a big account?

Yes, say veterans who have learned that trying to take care of a difficult customer or one whose needs don’t mesh with those of the business can be costly in terms of money, stomach lining, and future revenues.

Business owners often turn down a client or customer request, or even take the more drastic step of ending a business relationship, because the customer is too demanding given the size of the project or contract. Abusive behavior toward an owner or his or her staff is another reason why a customer is sent packing. And sometimes, it’s because a business has to be honest and say the company just can’t do the work that the customer wants, and therefore, maybe it would be better to go elsewhere.

Chris Carmon, CEO of the executive recruiter The Carmon Group Inc., said owners and also employees need to consider not only the revenue that a client can bring in now, but the overall impact this account will have on the company.

“People see a big company name or the ability to generate revenue in the short term and they jump on that bandwagon,” said Carmon, whose company is located in Independence, Ohio. “Great sales people are the ones who see how that will impact them not just now, but in the future.”

For example, will trying to serve one customer’s needs distract the owner and other employees from developing other business or serving other customers? Or, Carmon noted, sometimes the problem is that the customer needs something from a company that it’s just not set up to handle.

“We’ve had to discuss this with the client,” he said. “It’s a difficult conversation to say, ‘This is not a good fit for us, and this is why.’”

But Carmon said having to tell a client no in such a situation is more likely to turn out to be positive in the end.

“The business has grown dramatically because we have the better client base that fits us,” he said. And, some of these clients, appreciating the fact that his company didn’t want to deliver unsatisfactory service, came back later on when they had other projects more suited to his line of work.

Business owners agree that saying no or firing a client is hard to do. But Michael Frenkel, owner of MFC PR in New York, said a little perspective is called for.

“It’s not the last client on earth and there’s something to be said for peace of mind at the end of the day,” he said. “It helps to take a step back and say, there are more clients around the corner.”

Frenkel has ended relationships with clients who were verbally abusive, and when a customer’s demands escalated to the point where the contract was going to hurt the rest of his business.

“It’s not fair to you and it’s not fair to your other clients,” he said.

Some business owners don’t wait until there’s a problem to broach the idea of “this isn’t working.” Mike Paul, president of New York‑based MGP & Associates, includes a clause in his public relations firm’s contracts that allows him to cancel the deal if he feels the client isn’t working out.

Paul, who said his firm specializes in damage control and reputation repair work, said he needs to be sure his clients are serious about ethics. If he doesn’t get the cooperation he needs from a client, “I don’t care if a million dollars is on the table, I’ll walk away.”

Carmon, Frenkel and Paul deal with other business people. Companies that deal with the public also have to say no and watch a customer walk away.

Cheryl Smith, president of Kansas City Home Care, said every client is important in a service business, but she’s said no when it just doesn’t make economic sense for her company, which places home health care aides.

For example, she said, families that want help for only one or two hours a day just can’t make the job worthwhile to her business.

If they’re located too far from the metropolitan Kansas City area, she’ll also say no. When families become abusive to her staff, she said she needs to end the relationship.

And when a family needs care that goes beyond the scope of what home health aides are able to do, she cannot legally or ethically agree.

“We turn people down not a whole lot, but we do it if we can’t do a good job,” she said.

In retailing, where the mantra is “the customer is always right,” Deborah McCoy had to tell customers they were wrong even if it meant her company was then bad‑mouthed to others.

McCoy, president of the American Academy of Wedding Professionals, used to own a bridal shop in Boca Raton, Fla. She recalled that a persistent problem was customers who expected her to absorb the cost of bridesmaids’ dresses that had been made, but that no one wanted because bridesmaids had pulled out of a wedding. She said the brides didn’t see why they should pay for the dresses, and some outright refused.

“It was a terrible situation over and over again,” she said.

But McCoy couldn’t afford to let the dresses go unpaid for, and she ended up playing hardball–the brides didn’t get their gowns until all the dresses were paid for.

“You have to understand. We’re business people and we have to support our families,” she said.