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In today's newsletter:
Latest Podcasts: What You Missed
Hear how one company has grown consistently and scalably to over $6.5M in ARR with just a dozen people
Ambitious… But Lazy - What if the real goal of building a business isn’t doing more… but getting things to work without you?
10,000+ Customers With 15 People – How SweepBright scaled to over 10,000 customers with a team of just 15. A practical conversation with Raphael Bochner on leverage, focus, and designing a business that grows without growing headcount.
Hiring without Hiring – How to scale without adding payroll or burning out.
Want to Scale? ICP: Do You Know Me? – Stop selling to everyone. This episode focuses on defining your ICP so you can scale with better clients and less chaos.
Fire the Bottom 10%: Once a Quarter, Review Your Client List
You've got 20 clients. Most are great. A few are fine. And then there's that one client.
They pay late. They scope-creep every project. They demand weekend calls. They nitpick every deliverable and then ghost you for two weeks when you need feedback.
You keep them because... well, revenue is revenue, right?
Wrong.
That one nightmare client is costing you way more than they're paying you. They're burning your team's energy, stealing time from good clients, and slowly degrading your standards because you're bending over backwards to make them happy.
And they're never happy.
It's time to fire them.
The $28K Nightmare Client
Let me tell you about Tara, founder of a 7-person branding agency.
Tara had 18 clients. Most were dreamboats. Clear briefs, quick feedback, paid on time, appreciated the work.
Then there was ClientX.
ClientX paid $3,000/month. Not huge, but not insignificant either.
They were also:
Constantly changing requirements mid-project
Demanding revisions outside the scope (and refusing to pay for them)
Emailing at 11pm expecting responses by 9am
Badmouthing Tara's team on calls ("We expected better for what we're paying")
Paying 30-45 days late, every single month
Tara's team dreaded every ClientX meeting. One designer said, "I spend 50% of my time on their project and only 20% of it is actual work. The rest is just... managing their chaos."
Tara calculated the real cost:
Billable hours: 40 hours/month (normal for a $3K client)
Actual hours spent (including revisions, late-night emails, scope discussions): 70 hours/month
Team morale drain: Designers requesting to be taken off the account
Opportunity cost: Turned down a $5K/month client because the team was "at capacity"
Real cost: $28,000/year in lost time + lost opportunity.
Revenue from ClientX: $36,000/year.
Net value after factoring in pain: Maybe $8,000—if you didn't count the stress.
"I was paying myself $8K/year to be miserable and burn out my best people."
Tara fired ClientX.
She sent a professional email: "We've realized we're not the right fit for your needs. We're transitioning you off our roster. Here are three other agencies that might be a better match."
Within two weeks, she signed the $5K/month client she'd turned down. Her team's energy rebounded. And Tara slept better.
The revenue hit? Temporary. The relief? Permanent.
The Bottom 10% Tax
Here's the hard truth: not all revenue is good revenue.
Some clients cost more than they're worth—not in dollars, but in time, energy, and opportunity.
Think of your client list like a garden.
Most plants are thriving. They get water, sunlight, and they grow.
But there are always a few weeds. They take up space, steal nutrients from the good plants, and make the whole garden look worse.
You wouldn't let weeds take over 20% of your garden just because "well, they're something growing there."
So why are you letting nightmare clients take up 20% of your capacity?
The bottom 10% of your clients are:
Consuming 30-40% of your time
Causing 80% of your stress
Setting bad precedents for scope, pricing, and boundaries
Draining your team's motivation
Preventing you from taking on better clients
Cutting them isn't loss. It's addition by subtraction.
Why This Matters for Microteams
Big companies can absorb bad clients. They've got account managers, legal teams, and enough capacity to quarantine the chaos.
You don't.
Here's why quarterly client reviews (and firing the bottom 10%) is especially critical for small teams:
Every client touches everyone. In a 5-person team, one toxic client affects the whole team.
You can't afford energy drains. Your team's morale is fragile. Protecting it is a business priority.
Time is your only inventory. Bad clients steal hours you could sell to good clients.
You set the culture with your client roster. Keep nightmare clients, and you signal that bad behavior is acceptable.
The best microteams don't have the most clients. They have the right clients.
The Quarterly Client Audit Framework
Here's how to systematically review your client list, identify the bottom 10%, and decide who stays and who goes.