I was talking with my older sister a few days ago about her bookkeeping business, which keeps her very busy – especially during tax season. Each year – as most of us small business owners should do – she reviews her accounts and expenses and decides what changes to make. This year as she was reviewing her books, she noticed she was providing additional services to some of her clients – services that were not included in her hourly rate.

This is very common. We take on a client to provide a certain service at a certain cost, and as the relationship grows, often so do the services… yet our fees do not change. Not a great way to stay in business. So, my sister approached these clients to explain the situation and let them know that she would begin charging for these additional services. Fair enough!

Anytime we raise our rates we will probably lose some clients. That is exactly what happened to my sister. She was sorry to lose the business, but also recognized that she was not in the business of giving away her services for free. Even so, I think that most of us do not enjoy losing clients.

But, as I learned from my sister, losing clients can actually lead to more business.

In her work she has to coordinate with a number of other professionals – CPAs, Financial Planners, Attorneys, so it is necessary to keep them informed. She sent out a letter advising them that she was no longer working with one of their clients. Since she has established solid working relationships with these other advisors, they responded to her letter – offering to send more referrals her way.

So, I guess sometimes less does lead to more.

This entry was posted on Tuesday, February 17th, 2009 at 2:58 pm and is filed under SF Examiner. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.