Not All Business is Good Business

bad businessI don’t remember where or when I first heard it, but the phrase has stuck with me like white on rice: Not all business is good business.

Some projects that seem to promise high revenue may (in reality) equal low profit – or even a loss. If you step back and be objective (closing your ears to the siren song of the dollars), some work is clearly outside your sweet spot, or beyond your current capacity. And some clients aren’t worth the trouble – they create for more chaos than benefit. Been there?

Your company and that piece of business – it’s not always a fit. We need the courage to say “not all business is good business” – and act on it! 

We are all tempted to take on certain clients and projects because of one overriding factor: Revenue. I’d like to suggest that you make each of those decisions based on a different factor: Purpose.

Here are examples of business that may NOT be good business:

  • Taking on a project with a client who is hard-nosed, and/or cheap, and/or indecisive. There is such a thing as a bad client. Avoid – let some less wise competitor suffer.
  • Taking on a project that has very poor definition, and in which you cannot seem to get more information. This will become a moving target of scope creep that will frustrate you for months on end – guaranteed.
  • Taking on a project that is a good bit out of your sweet spot, with an existing client. Don’t endanger the relationship with a high-risk-of-failure attempt to keep all the client’s dollars to yourself. Short-term gain often equals long-term loss.
  • Taking on a project or client that moves your company and its resources into a direction that you really don’t need to pursue. Rabbit trails waylay any kind of focused growth and dilute your message.
  • Taking on a project or client despite warning bells of good judgment and conscience. Don’t let dollars delude you into ignoring your better instincts.
  • Trying to compete in an area where you are just one of many potential suppliers, and your offering cannot rise above a commodity level. Find a more narrow niche that you can dominate.

Over and over again, as I’ve counseled small business owners and consultants, I’ve heard the tales of woe that result from pursuing or taking on not-good business. The best way to avoid this trap: have a clearly-defined purpose and highly-focused offering (including the clients you wish to pursue) so that you have a solid basis on which to say no. Otherwise, you’ll dilute your efforts by chasing (ultimately) unprofitable revenue. And that’s a game nobody can win.

During a recent Clarity Therapy consulting session, this truth came home in a big way. In this instance, it quickly became clear that there was a certain type of target company – those of a particular size and corporate culture – that were a great fit for this client’s services (and business approach). But there was this constant pressure to chase all kinds of potential clients, even when there was a grating sense that this business might not be worth the invested effort. You know that pressure, right?

Just because someone sends you a RFP (Request for Proposal), doesn’t mean you have to respond!

It takes courage to say, “This is who we are, and therefore THAT kind of client/business is a mis-match. Instead, we’re going to pursue THIS.”

Let’s face it – every consultant and company feels the pressure of generating revenue and cash flow, and we are often tempted to take on work that we know, in our gut, isn’t really the best for us. If we keep that up, over time, our identity and message can become muddled and obscured. Instead of bending our efforts to pursue GOOD business with a very clear and compelling identity and message, we become…well, serial violators of our own professional DNA.

Not all business is good business. So the question is – what IS good business for you? Have you defined your sweet spot, your ideal clients, the best scope of project or retainer work, and the most profitable type of engagements? For a season, you may need to take on some sub-optimal jobs to meet payroll and expenses; but in the long run, it’s your job to define (and then pursue) the best business for you!

photo credit: David Glover via photopin cc

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