After the startupworkgrab, you know, the first months or years when a new business will take any paying work, there has to be a time of self reflection.
You now have some data and you need to ask yourself some questions. I suggest that you pose these questions as negatives:
What work is the least profitable?
Who are the worst clients?
What work do I dislike the most?
You may find that these answers overlap. The reason the work is unprofitable and unpleasant is because the client is unreasonable, overly price sensitive or doesn’t pay on time.
Pro Tip: This sentence should read: The client is unreasonable, overly price sensitive AND doesn’t pay on time. Like line in West Side Story, “When you’re a Jet you’re a Jet all the way, ” “A bad client is a bad client all the way.” Trust me on this.
Once you have identified the bad, eliminate the worst 10% to 25%. Every year.
You can do this nicely. You can raise your prices. You can increase your delivery times. You can refer the business away. Do what you must, but be decisive and act.
It seems like a risk, but it is actually the opposite: you end up with peace of mind, better profitability and more time to work with people who are happy to work with you.