Know When to Walk Away: A Guide for Fractional Leaders

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I've caught myself saying the following more times than I can count: "Fractional work allows me to have all the fun associated with working at a startup without the bullsh*t associated with a startup." For most of my career, that has been true. But based on a recent experience, I have started thinking about the times when the bullsh*t of a startup does rear its ugly head and how I could advise new fractionals on how I've approached it. Here’s my list for how to know when to walk away.

Reasons to Walk

One of the most powerful concepts that I learned in that time is the concept of "firing a customer." There are many reasons why you might need to let a customer go:
  • Nonpayment or chronic late payment;
  • Violation of terms and conditions—for example, work outside scope;
  • Unreasonable demands or expectations—3 AM replies;
  • Abusive behavior;
  • Lack of engagement—they forget they hired you;
  • Misalignment of a target market;
  • Merger and acquisitions;
  • Legal reasons;
  • Strategic reasons—conflict with more profitable clients;
  • Financial reasons—on your end, this includes low profitability, high maintenance costs, inability to cross-sell or upsell, high churn; and,
  • The all-encompassing, high opportunity costs for working with that client.
The point of the exhaustive list above is that most people talk about a customer leaving a vendor but rarely is it discussed when it's the other way around. Yet happens more than you think and as a fractional leader, especially if you are just getting started, it's a concept that you have to get comfortable with. Yes, getting customers is hard but at the end of the day you don't want just any customer, you want the right customer. When that isn’t the case, things could get ugly.

With all that being said, before deciding to fire a customer, it is crucial to consider the potential impact on your business, reputation, and any contractual obligations. It is often advisable to exhaust all other avenues for resolving issues or addressing concerns before taking such a step.

Plan Accordingly

I highly recommend going through a scenario planning exercise using the lists above and thinking about all things that client startups, SMB, SME or scaleup could do and then trying to determine the courses of action. You’re part of a flourishing community here at Fractionals United, and I’m sure every single one of the 2000+ members could share a story or two that can help build that list for you. These scenarios and courses of action can be used as a baseline for upfront negotiations or just a great way to prepare you for situations as they arise.

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