You’ve reached a point where simply hearing a particular customers’ name sends shivers down your spine. You know that this person is not going to be happy with anything that you do. On more than one occasion, you’ve all but turned yourself inside out to meet their unreasonable demands. Every interaction is an exercise in frustration, and you are at a point where you just want to cut your losses and sever the relationship. What you lose in revenue from the client is more than worth recovering your sanity.

As a small business owner, your primary concerns are most likely attracting and retaining clients. The idea of losing a customer — or more accurately, ending a customer relationship — is probably not one that you’re in favor of. But sometimes, severing a business relationship is the only and best option when you want to protect your bottom line, your corporate reputation and your own sanity.

So how do you know when to keep a customer on the books and when to let them go? There are a few points to consider.

When to Say Goodbye

Sometimes, it’s easy to end a client or customer relationship. There is no need to work with someone who is verbally or physically abusive. If a client resorts to name-calling, threats or other abusive behaviors, you need to end the business relationship immediately, and seek outside help if necessary.

In most cases, the situation is far less cut and dry. While only you can determine whether the relationship can be salvaged, some of the factors that might lead to you to end the relationship include:

  1. The other party’s actions are harmful to your reputation. We see this a lot in the world of celebrity spokespeople, when someone loses their role as a spokesperson because of their actions. As a business owner, you need to determine whether a client’s actions or reputation reflect poorly on your company.
  2. The other party consistently fails to hold up their end of the bargain. If a client fails to deliver information, approvals or payment as agreed, and previous efforts to address the issue have failed, severing the relationship may be your only option.
  3. Breach of contract. If a customer or client does not adhere to all of the terms of a contract, you have reason to terminate.
  4. Unrealistic expectations or challenging behavior. Everyone who has managed client relationships can share “war stories” about clients that made their lives a living hell. If you get hives just thinking about dealing with a client, and they aren’t bringing your company any measurable value, it’s not worth your time.

When to Save the Relationship

Ending a relationship is the best option when you know it cannot be saved. However, there are times when you cannot — or don’t want to end the relationship. In these cases, you may need to draw on your conflict resolution skills to find middle ground and improve the relationship. For example:

The client provides a significant portion of your revenue, and you do not have an immediate replacement. The problems are situational.

For example, the problems only occur when working with particular employees or with a particular system or product line. (The client brings more to the table than revenue, such as a steady stream of referrals. You’ve had a good working relationship that’s being tainted by a single incident. You cannot legally sever the relationship without incurring significant costs. You have a good working relationship with the client aside from an immediate issue. * The most common reason that business relationships go south is that one party fails to meet the expectations of the other. That’s why it’s important to establish clear expectations up front, and to regularly check in with each other to ensure that everyone is happy with the progress and there aren’t any major issues. In most cases, relationship-ending disputes can be avoided with clear communication and compromise. Even relationships that seem past the point of repair can be saved with the right intervention and mediation.

How to Sever Ties Cleanly

If mediation and intervention are not possible, and the issue appears unsolvable, it’s important to go about ending the relationship appropriately. Keep track of all aspects of the issue in writing, hanging on to emails, voice mails and other documentation as necessary. If need be, review contracts to determine the appropriate exit strategy, and proceed accordingly.

Above all, be professional, clear and firm in your decision. There is no need for a relationship to end on a bad note, or for a “saved” relationship to feel awkward. Your best bet is to make the decision that you feel most comfortable with, be resolute in your decision and move on to focus your energy on healthier, more productive relationships.