Is he capable of doing the job? If he applied himself and thought through each step before doing it (even if he had to have every step wwritten out for him), could he perform the job duties as needed? I have had employees who were extremely lazy and simply did not do the work as required–after two written warnings, they were fired for continually skipping assignments. They were capable of doing the job, they just decided to not do it. As it was affecting the business, they were fired.
If your employee is not able to do his job, and especially if that is costing you customers, then he is a liability. Make sure that his job duties are fully documented and he has signed off on those duties, and if he does not get them done, follow your company’s HR practices. If you don’t have an HR department, check with your state laws to see what needs to be done. Generally a series of written warnings (signed by the employee as well as you) are required before firing. They will also provide documentation that he was not doing his job, in case he turns around and sues for being fired for no reason (being in a right to work state also helps protect against that).
Yes, as an employer you have certain moral and ethical guidelines that should be followed in regards to those that work under you. But at the same time, an employee has moral and ethical guidelines as well. If the employee is not living up to his end of the deal, you are not required to bankrupt your company simply to employ someone.
Also, simply talk to the guy. Maybe he has some health or personal problems which are occupying his mind. Offer what help you can, tell him what sort of allowances you can make in terms of his responsibilities, but still follow the HR practices if he can’t get the reduced duties done as well.