Sometimes the most powerful word you can use is “no”
No. It’s a powerful word. Some people have a really tough time using it, but it could be what saves your business. When a company is just starting out or in a growth mode, it’s often easy to become a “yes” company. Because life is good when new customers are rolling in, right? Well, yes…and no. Regardless of your stage of business, it is critical that you know your company well enough to know when to say no. Customers (or employees for that matter) that are not a good fit can drag down your bottom line. Here are some guidelines on how and when to just say no.
Know your vision
There’s a reason why a vision statement is one of the first pieces of any business plan. At The Alternative Board-Denver West, we always lead with the vision statement. We first define a personal vision, which then leads to the business vision. It looks ahead, say 10 years in the future, and in 100 words or less describes where you want to be. It is our goal to get your business in alignment with your personal vision to achieve the success and fulfillment you are looking for. A business can’t be everything to everyone, and you shouldn’t try to be. Define your niche, why you are the authority on what you do, what you are personally trying to accomplish, both personally and professionally, and don’t stray from that. This is how company culture is created. Your vision, values and goals align with what you offer, who you offer it to, and who will join you on this journey as your business grows.
Turn away business?! Just breathe…
Whether you are saying no to a new customer or an existing customer, just know that it is 100% okay to turn business away if it isn’t a good fit for your company. You can say no to existing customers because it could turn out that they’re not good customers. What’s a good customer? Like any relationship, a business relationship should be a two-way street with mutual admiration and respect. (Respect being a key word.) If a customer is taking 80% of your time to manage and only netting 20% of profits, if they are profitable at all, then they are not a good fit for your company (there’s that 80/20 rule again). Saying no to this type of customer opens up space for more profitable customers. When you are looking at new customers, really think about it not only from a financial perspective, but how they are to work with. If they are time consuming and culturally challenging in the sales cycle, the chances are that they will be even more difficult as a customer.
Finding a good fit
To find a good fit, you must be judicious during the sales cycle. Determine if the client is a good partner for you – this decision-making process is not just one sided. Don’t take business for the sake of taking business; that will cost you more in the long run. The same applies to the hiring/staffing process. If you have employees that are time consuming from a management perspective, you need to take note of it because it may be that you are not getting your money’s worth. The employee’s productivity and quality may not mirror the standard at which you are investing in. It’s ok to say no. No one likes to terminate an employee, but it’s important to consider the toxicity to other employees, the example that employee is setting, and also how their lack of productivity is negatively contributing to your bottom line. It may be a good idea to have a 90-day trial period for all new employees to see if they are a good fit before permanently adding them to your workforce. For existing employees, try putting them on a performance improvement plan with the caveat that it is a one-time shot. If little or no improvement is measured, then it’s time to cut the cord.
No or not right now?
Sometimes saying no is just saying you are not a good fit for the business. If a potential customer approaches you, and after some exploratory work you realize they are not a good fit, you can refer them to someone who would be a better fit. It may be the lead needs a larger or smaller company to work with to better accommodate their needs or you simply don’t offer exactly what they are looking for. Don’t try to fit a square into a circle, no matter how lucrative the customer might be. As you move through the sales process, remember that these are relationships you are building – whether the lead becomes a customer or not. If you recognize an unhealthy, possibly combative relationship from the get-go, then think about if that ‘s what you want for a long-term basis. Are they going to make you jump through hoops? You want to identify the customer that is searching for a “win-win” situation. If a prospect you are in discussions with could potentially benefit you later on or be a better fit down the road, maintain a good relationship with them. Routinely check in and employ the networking tips I’ve suggested. Remember, it truly is all about who you know and how you know them.
If you need some help saying no and understanding what customers or employees are best for your company, contact me. I’d be happy to discuss your specific situation and how I can best help.
By Blair Koch
