Contrary to popular belief, the customer is not always right. They're not right when they ask you to compromise your integrity. They're not right when they micromanage you to the point that the final product does not represent your standards of quality. They're not right when they string you along for payment using manipulative tactics.
So, when you decide it's time to fire your client, how do you do so gracefully?
Here's a couple of approaches that might work for you:
1. For most of your clients: the polite goodbye. Thank them for their business and professionally explain that you're not able meet their needs to the level you are comfortable with. If it's just a bad fit, offer up some fellow consultants who have the skill and temperament that makes for better chemistry.
2. For your penny pinching clients: chalk it up to a new business strategy. Tell them you've enjoyed the relationship, however your strategy now dictates that you focus narrow and deep. In other words, less clients and more profitable work. Perhaps you know a consultant who is starting out that would love to have some foundational work. Here's an opportunity to refer them.
3. For the really bad fit: put a timeline in place and cut the cord. It's always preferred to bring a project to its proper conclusion, but sometimes that is just not possible. If the relationship has truly deteriorated to the point that working together is not an option, explain to the client that you believe it is best for all involved to end the relationship. Give a timeline with milestones, be professional and be clear: It's over.
We used to live in a small world. Now we live in a minuscule one. Burning bridges is not only unprofessional and lacking integrity, it's just bad business.