I tag every transaction per client in Beancount and ran per-client P&L for the year. One client took forty percent of my hours for fifteen percent of revenue. Pareto principle. The math is insulting. Now I am stuck between firing them outright since bad clients crowd out good ones, or keeping them with a much higher rate and tight scope until they pay fairly or leave. Which worked for you: fire the worst client or reprice them into shape?
Pareto principle. The math is insulting.
Let’s run it. Say they pay $2k a month for 40 hours. That’s $50 an hour. Fire them and you get zero dollars and 40 hours back. Clean break, empty pocket.
Now reprice instead. Charge $4k for 20 hours, tight scope, everything extra billed hourly. That’s $200 an hour. If they say yes, your worst client becomes your best client overnight. If they walk, you still free the same 40 hours, plus you get proof the work never paid.
I doubled one retainer like this once. They stayed six months then left. Best hourly rate I ever had on any contract.
Reprice them. Firing leaves money on the table.