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Overwhelmed with business but still losing money…

A small business that provides services has to be very careful in both the client selection and client retention process. Imagine a service firm with 450 clients; just providing the necessary services takes the majority of time for both the owner and the two person staff. In this, all too common scenario, there is little time for marketing or exceeding client expectations. The bottom line is one of “barely surviving” to pay wages and office overhead.


The root of this particular problem is the quality or lack of quality that the clients represent. When the business first opened, any client that needed the offered services was accepted, without any analysis of time spent versus money earned. The business started to grow, but attracted clients similar to those that helped the business get started.  The goal was to gather as many clients as possible and by volume make a profit. My suggestion of looking at the value of each client and terminating those that did not provide enough income to cover expenses and provide a company profit was met with reluctance. “After all, these are the people that helped me get started, I have to remain loyal to them”.

If we assume that the “business” has a life, and you are responsible for it, then you must make the “hard” decisions necessary to profitably grow the business.  As a reminder, all business owners also have a financial obligation to their families and to their own retirement. The   following are a few suggestions on how to alleviate this problem:

  • Make a list of all your clients and prioritize them with those that provide the greatest profit at the top and then down to those that provide the least. In my experience the bottom 25% are suspect and are candidates for termination. Use your staff to help you determine if any of the bottom 25% should be retained.
  • How can clients be terminated?
    • Outright termination
    • Help them make a transition to another firm

I recommend a timed termination program. Select three to five each week and implement your method of  termination. In case of a referral to another firm, personal contact is highly recommended. Like so many systems that I discuss in my blogs, I can only draw your attention to issues that may affect your business. It’s up to you and your coach to further develop and implement these ideas.

If you’re a leader, it’s not enough to know what to do. You have to know when to act.      J. Maxwell

Nick Petra   contact me at to discuss your business growth.

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