Knowing When To Walk Away – Smart Business Tips

One of the easiest pitfalls for a young entrepreneur to fall into is agreeing to take on work that simply isn't worth it.  For most fledgling business owners turning away work in this current economic climate can simply seem absurd, but knowing when to say NO is a vital skill if a company is to continue to survive.  Saying no to a potential job or client isn't always based on fiscal concerns either.  There exists a host of reasons to consider before taking on a project.

Your Share Of The Pie

Knowing When To Walk Away - Business TipsAs a matter of fact, it is easy for a business owner to say 'No' to a job offer that is simply not profitable.  While this common sense approach seems simple enough to adhere to, in reality it most often is not.

Typically, these situations arise when a person fails to account for all of the items that need to be incorporated into the pricing of a project.  Aside from the variable costs associated with 'just' getting the job done, businesses need to factor in other fixed cost related to the day-to-day operations of the business.  This is inclusive of rent, insurance, and  payroll, factored in relation to the amount of time spent performing the job.  Once these factors have been taken into consideration, there remains one final factor (that many small business owners often fail to account for) - factoring in a salary for themselves.  

At the inception of a company, the owner or CEO should make a point to give himself or herself a stated salary.  Skipping over the important step of paying yourself is where most owners go wrong.  By not factoring in this number, many owners take on jobs that pay for the 'material' cost of the process but do not compensate the owners for their time.  If you are looking to make a living, this trap must be avoided - or else you're working for free, and that is never a good business practice to emulate.  If the project bid doesn't meet a basic watermark that considers all the factors listed above, you have to say 'No'.

A Disagreeable Client

Having said that, do not let money be the only factor in accepting a job as well.  As mentioned above there are still other reasons as to why a business owner should walk away from a deal, and one of them is a disagreeable client.  Most business owners are more than willing to bend backwards for most clients, and understand they can tolerate a poor attitude if it means getting paid at the end of the day.  The value of the project needs to be weighed against how negative or demanding a client is, or if the venture can even be completed successfully.

A client who is obtuse, disengaged, or derogatory should be an automatic red flag - that a potential deal may not be worth the revenue involved.  If a client consistently cannot be bothered to be a responsive participant or to even address critical concerns the business owner has, it should be enough to bring to mind the thought of saying 'No' to the project.  The same with a client who demonstrates little to no respect for you or your business.  While enduring a derogatory client doesn’t appear to take away from the company's bottom line, it can take a toll on your team's morale and efficiency.  A client-vendor relationship needs to include mutual respect.
There is a difference between servicing a client and being a client's servant.

One More or No More

Finally, what if you are unable to provide your best work to a client?  Remember a lot of what you do is either going to run you out of the industry or build up your reputation and kick-start your company.  If you cannot assure yourself that you will be able to provide results you can build relationships upon, it's time to say 'No' to a deal.  This is easily the most difficult 'No' for business owners to say, as they rarely think that can't squeeze in one more project.

However, if there is an honest assessment of a business' current workload and there's truly no room for another, the choice should be clear.  The far reaching effects of spoiling an otherwise spotless reputation will have much larger financial consequences for the business than the revenue you can expect to take in from one project.  Once a company has a damaged brand in the eyes of an industry, restoring it to a pristine state is next to impossible.  

Saying no to a deal certainly takes courage.  It also takes thought and review.  But through careful considerations of the immediate and future repercussions, a business owner can say 'No' to a deal and feel confident he made the right choice.  After all you're in business to make yourself a living, not to sacrifice the quality of your work, or future of your company.

Knowing When To Walk Away – Smart Business Tips Knowing When To Walk Away – Smart Business Tips Reviewed by Unknown on June 16, 2012 Rating: 5
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