Sep 16, 2022 | Starting a Business

I’ve decided to go out on my own. Should I take my clients with me?

Q. Dear Zenagos, I work in a services company doing staffing. I like my company and my boss, but I really want to be my own boss. I’ve decided to go out on my own. There are some clients who have said they would follow me. Should I take them?
–Preston

The most honorable thing to do is to leave without taking any clients and build your business on your own. This is also the safest move from a legal perspective. We talked in an earlier post about the investments that a business owner makes in order to acquire new clients. Your boss will have a right to be very angry if you try to take clients, and you may very well end up in court. Depending on what you signed when you took the job, you could have liability. In addition, clients may happily say now that they will go with you, but they may change their minds when the moment actually arrives. If you want to start your new venture with a clear conscience, trust your capabilities, and win your own business the hard way.

Even if you do decide not to actively take clients, some clients may decide to follow you on their own. It pays to get ahead of this possibility by having an above-board conversation about your plans with your employer before you leave. Prepare for the conversation by reviewing your legal commitments. Did you sign an employment agreement when you joined the company? Did it include a non-solicit clause relative to clients and/or employees? Did it include a non-compete clause? Discuss the situation with a small-business attorney, so you have a full understanding of your commitments and risks.

As you prepare, think about which clients are likely to want to move over with you. If these clients do not represent a lot of your employer’s business, the conversation will be less contentious. If they represent a significant percentage of your employer’s business, expect a pitched battle. Discuss with your attorney in advance what kinds of compensation or concessions you might be able to offer in a negotiation with your current employer.

When you are prepared, set up a formal meeting with your boss (and maybe the CEO, if that’s someone different) to let them know that you will be starting a business in the same field. Try to come to a mutually acceptable agreement about which clients are off limits and for how long. Maybe you can agree not to actively solicit clients, but that you will not turn away clients that proactively come to find you.

It may not go well, despite your best efforts. If the meeting is bitter, at least you will know that you were open and honest. And be careful to remain professional, no matter what happens. Even the worst breakups have the potential to improve over time, so try not to return any negative emotions that you receive. It will be better to have your former employer as a competitor, not an aggressor, if that’s at all possible.

This is a challenging question and an awkward moment, but it is temporary, and you will find your way through it. It is to your credit that you are thinking it through now. In the meantime, congratulations! Starting your own business is a big step, and we wish you the best.

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