Small is the new big.
Is it how big you can get, or how small you can stay? How do you build capacity to better service your clients?
How many times have you heard the phrase, “It’s not the quantity but the quality that matters”? This is definitely true when considering a professional’s business. Despite this, a large number of professionals have a difficult time grasping the concept that bigger is not necessarily better. In fact, more often than not, professionals dream of building a large client base. One thing is for sure, in this day and age; a large business means considerably more work.
Client rightsizing is often a difficult subject to broach, as many professionals are looking for guidance to grow their businesses in order to increase their net incomes. Instinctively, they believe their action plan should begin with increasing the number of clients in their business, not paring down the number, and this is where many professionals miss the mark.
There is a specific process to growing one’s business. It is often important for a professional to reduce their number of clients before adding new ones. The goal is to clear out the old, poorly-matched ones to make way for the new (and improved) clients. This gives the professional the opportunity to let go of clients who aren’t necessarily adding to his or her income but are certainly draining time or have attitudinal qualities that don’t align with the professionals.
If you take anything from this section, please remember that to increase your income, you don’t necessarily need more clients, just better and more engaged clients. Another thing to consider is that you could likely reduce your client base by “letting go” of clients who are not significantly contributing to your business and remain at your current revenue thresholds. Keep in mind, everything you do is client-centered, including right-sizing. If you have too many clients or clients you cannot stand working with, no one wins, and that has to be the core principle that governs right-sizing.
Our activities determine our productivity. Furthermore, we are creatures of habit, and those habits compound - and sometimes they can cause us to drift off track. That being said, is there a chance that you are spending time with clients who demand your attention at the expense of the clients who deserve your attention?
On the whole, your clients will break into three categories:
When you drill down, especially with a questionable client, often the issue is not a lack of revenue but rather the existence of a flawed attitude. They question your rationale, are rude or disrespectful to staff, they micromanage, they are unrealistic, have painfully high levels of self-importance, etc. When it comes to rightsizing, this is where you should start. Ultimately, the client is not a good fit for you and your team, and you are doing them, your team, and yourself a disservice by keeping them. You want to take the high road and disassociate professionally and respectfully.
Doing rightsizing will make it clear which relationships are unprofitable or do not fit with the business model going forward. Remember, you can’t be all things to all people. This does not mean you fire your clients. What it means is that you consider the ‘type’ of client/customer on which you are spending your two most important resources: time and money.
Within the Toolkit CRM, you can professionalize your rightsizing process by classifying your clients. Use the Client Classification feature to identify the lower-tier clients that are no longer a fit for your business. Try for free here
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