Fire a client when two of three numbers say they cost you more than they pay: your real hourly rate on their work, their share of your hours compared with your revenue, and how late and how often they pay. Then end the relationship the way you'd want to be ended: written notice, a date, open work finished or handed off, and a clean final invoice. Below are the test with a worked example, the exit plan, an email, a phone script, a no-fault version, and replies to pushback.

Ending a client is a business decision, not a verdict on their character. The short version of this is on the page how to say no to a client; this page is the full exit. If you haven't yet tried to fix the problem, start with how to handle a difficult client. Some problems are fixable with a clearer agreement. If you've tried and it hasn't changed, read on.

Decide with three numbers, not a mood

Bad weeks make everyone want to quit a client. Numbers keep you honest. Pull the last six months and answer three questions.

One: what's the real hourly rate? Divide what they paid by the hours you spent, including emails, calls and corrections. Compare with your target. Two: what share of your time do they take compared with what they pay? Three: how do they pay? Count late invoices and average days late.

Example: Joss edits video for small businesses and wants to earn $85 an hour. One client pays a $1,200 monthly retainer. Joss logged 22 hours a month on that account, so the real rate is $1,200 / 22 = $54.50 an hour, which is 36 percent below the target. Joss has 110 billable hours a month and a target revenue of $9,350 (110 x $85). The client takes 22 of 110 hours (20 percent) but supplies $1,200 of $9,350 (about 13 percent). On payment: late on four of the last six invoices, an average of 19 days. Three out of three fail.

The rule: if two of three fail and you've already raised the issue once in writing, end it. If only one fails, fix the terms first: raise the rate, cap the hours, require a deposit. A client who agrees to a fair fix is worth keeping. A client who refuses is making the decision for you.

The exit plan: notice, open work, final invoice

Before you write anything, check your agreement. Look for a termination clause, a notice period and payment terms. If there isn't a clause, use 14 to 30 days' notice as a courtesy and as protection, because a sudden stop looks worse than a short wind-down. Then plan four things.

  • Notice: give a specific last day, such as 21 days from the date you write.
  • Open work: finish what's paid for, or hand it off with files and notes. Don't leave a half-built project.
  • Money: send a final invoice for work done, and refund any prepayment for work you won't do. Late fees can be waived as a goodwill gesture if that helps keep things calm; that's your decision.
  • Referral: if someone else would fit this client better, name one or two, only if you'd honestly recommend them.

The cancellation policy template shows what to put in your agreement so the next exit takes ten minutes. For unpaid money at the end, see how to follow up on an unpaid invoice.

Script 1: the email

Email is the better first step because it puts the decision in writing and gives the client time to react. Keep it short and avoid reasons that start arguments.

Subject: Ending our editing retainer on November 20

Hi Rick, I've decided to wind down our monthly editing work. My last day on your account will be Friday, November 20. Between now and then I'll finish the three videos in progress (the October recap, the product demo and the holiday spot) and send you all the project files and my notes in a shared folder. My final invoice for work through the 20th will arrive that day. I'm sorry for the short notice on my side; I wanted you to have time to find someone. If it helps, I can recommend two editors who work with small teams. Thank you for the work these past eight months.

Joss

Why it works: the date is first, the work is accounted for, and nothing in it invites a debate about whose fault it was. Variation: for a contract client, quote the clause: "Under section 8, I'm giving 30 days' written notice."

Script 2: the phone call

Call when the client is long-standing or the relationship was friendly. Do it right after the email goes out, or just before, depending on temperament. Have the email ready to send within the hour so the call is on record.

"Hi Rick, I wanted to tell you personally. I've decided to stop doing the monthly editing, and my last day will be November 20. I'm going to finish the three projects in progress and hand over all the files. I'm sending an email with the details right after this call. I appreciated working with you, and I'd like to make the handoff easy. Is there anything you need from me before then?"

Don't explain more than that. The longer your reason, the more you give the client to negotiate. If they ask why, use one sentence that is true and not hurtful: "My workload has changed and I can't give the account the attention it needs."

The no-fault version

When the problem is fit, not behavior, say so. "I'm narrowing my work to product demos for software companies, so I won't be able to continue the event videos. I'd like to help you transition." This is true if you are, in fact, narrowing. Don't use it as a cover story. A client who learns later that you took on another event client will remember. If you can't honestly say no-fault, use the plain version above.

What to say if they push back

Three common replies. "Can we change the price instead?": "I appreciate that. I'd have said yes at the start, but the issue is also the late payments and the changing scope, so I've decided to move on. The date stands." "Can you stay a bit longer?": "I can extend to November 30 for the projects in progress, no later." "You can't just leave us": "I'm completing everything we've agreed and handing over files. You'll have all you need to continue with someone else." Don't argue and don't reopen the reasons. Repeat the date and the handoff.

If a client who sounds angry threatens a bad review, stay on the facts, keep your messages, and don't reply in public. The how to handle sales objections wording on staying calm applies here too.

Replacing the revenue

The reason people hold on to a bad client is fear of the hole. Do the arithmetic ahead of time: Joss loses $1,200 a month, and gets back 22 hours. At the target rate those 22 hours are worth $1,870, so one new $1,200 client who needs 14 hours a month would put Joss ahead. The new client has to come from somewhere, and that's a pipeline question. How to get your first 10 customers covers the loop, and Rocketship runs it: it finds the buyers, emails them from your own Gmail, follows up, and books the meeting on its own. Plans that get you customers start at $24.99 a month (Launch), and both Launch and Frontier start with a 7-day free trial, card required.

Start the search before you send the notice. A pipeline that's already moving makes the hard conversation easier. For what to do the week a new client signs, see the client onboarding checklist.