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Business Unplugged™
This blog features Carol Roth's tough love on business and entrepreneurship, as well as insights from Carol's community of contributors.

Not All Business is Good Business

Written By: Steve Woodruff | 4 Comments

The Right FitI don’t remember who said it to me first, many years ago, but the advice has always stuck with me:

Not all business is good business.

What does this mean? Simply this: There is business you can take on that will likely hurt, not help you. Because it’s not the right “fit.”

We are all tempted to take on certain clients and projects because of one overriding factor: Revenue. And in the earliest days of a new business, this approach may be unavoidable to a degree. But as soon as possible we need to transition to a different compass for our direction: Purpose.

We need to determine what “good” business is – based on a clearly defined vision.

Here are examples of opportunities 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 about 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. Kissing cousin: unrealistic timelines.
  • Taking on a project that is a good bit out of your sweet spot, even 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. Sometimes your gut is smarter than your calculator. 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. Define a narrower 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 siren song of short-term revenue sounds tempting, but too often leads to wails of regret once the project is underway.

Why do we make the mistake of taking on bad business? Frequently, it’s because we don’t have a clear enough framework for saying, “No.”

The best way to avoid this trap: We need to have a clearly defined purpose and highly focused offering (including the clients we wish to pursue) so that we have a solid basis on which to decide which work/clients are not a good fit. Otherwise, we’ll dilute our efforts by chasing (ultimately) unprofitable revenue.

So what do you think? Do you agree? Have you had some client disasters by taking on the wrong projects? Please share your thoughts in the comments below. 

 

And that’s a game nobody can win.

Article written by
Steve Woodruff is the world’s only Clarity Therapist and helps individuals and businesses discover their fit. Visit his website/blog at www.SteveWoodruff.com.
  • Agree. There is a lot of value is knowing when to say NO. Warren Buffett calls it humility – Knowing what you don’t know.

  • PointA_PointB

    Great article swoodruff – I learned this lesson the hard way. I got absolutely killed by a client who was a bad fit, and now with this business, I am extremely careful about only working with the right clients. In fact, I stress this with my small biz clients and am constantly quoting Michael Port’s Red Velvet Rope Policy to them.

  • I’ve learned the hard way not to go after assignments that
    sound tedious even before I get into them.
    I’ve worked on decent paying but boring research reports
    that involve the creation of lots of spreadsheets and many, many pages of their
    interpretation.
    The answer is not to quote a high price in the hope you don’t
    get it because you may get it anyway.
    The money won’t make it more fun.
    -d

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