When to Say No to Business!

In a recent article on the Five Principles to Managing Cash Flow Successfully I received a number of comments on the third principle – Importance of No.  As business people we strive for the yes from the customer/account/client, which means an order or a commitment for an engagement.  However, in our drive toward closing the order we can overlook critical signals about the customer or become too aggressive in negotiating away our value that often results in business we wish we had said No to and walked away.

Why is it so hard to say “No?”  We have all been there –more than one, two or three times.  The experience is the same.  We make less money.  We regret the customer relationship.  We loose face or feel people will think less of us if we back away.  We are less motivated and we struggle to deliver a good quality experience despite the circumstances.  Our internal drive to win any and all business is a strong one and difficult to manage.  It becomes personal when we should be objective and recognize that we should let the opportunity pass to someone else who may be a better fit or willing to take the risk with this particular piece of business.

We need to manage and control the fear of loosing business or an account and stand firm on the success principles of our businesses. It doesn’t make sense to compromise your business principles only to put the customer relationship at risk.  If you roll over and walk away from your principles you will move from a position that you can defend to your customer to the slippery slope of compromise that once you start it is difficult to know where to stop.  Some customers (under the guise of good negotiating) will take advantage of you once you start down this path.

Here are key indicators that you should look for that will put you in a “No” position.

1. Balanced agreement/contract – You should have a sound business contract/engagement agreement that protects you and looks out for the interests of the buyer.  Use legal counsel and an insurance professional to look it over to make sure it is sound.  The key terms of the agreement should be reinforced during the sales development process.  If the customer is hesitant to sign the agreement wanting to do a handshake or refers it to his attorney and it comes back with language that clearly favors the buyer – say “No!”
2. Moving goal posts – Too often a customer will want, or appear to want, infinite idea flexibility and each time you meet with them the story changes.  Your job is to contain scope creep and avoid pressure on what you have proposed and what will be agreed to in the beginning but seems to continue to evolve.  Another factor is vagueness or difficulty in agreeing to details that are critical to your performance.
3. Working relationship – If you do not have a reasonable working relationship – keeping scheduled meetings, providing necessary details, reasonable access (returns e-mails, phone calls, etc.), demonstrates appropriate follow up on activities they are responsible for – then you are witnessing what your under-contract working relationship will be like.
4. Outside your core competency – You get jazzed about a great opportunity and then realize that the scope of the work requires experience and competency that is too far from what you are capable of doing.  In this case the opportunity is not a good match for you and you should withdraw gracefully.  Most customers will respect your decision and will consider you for future opportunities due to your honesty.
5. Contact with the key decision maker – Where your success is dependant upon organization cooperation but you do not have access to the decision maker that is responsible to deliver that cooperation then you are at risk. You need to have access to the senior manager that can make things happen if they are not occurring on their own or you will find that you are working uphill, against the flow, and at risk.
6. Absence of commitment – If the customer is unwilling or finds it difficult to commit time or reasonable resources in the development of the project then, like 3 above, the customer is not engaged or committed to not only to their success but yours as well.

Saying “No” should occur as soon as you cross one of the thresholds above where you know it is not going to be a good deal.  Communicating your decision should be in person if possible and also in writing describing the important business factors that you feel need to be present for success.  Do not highlight what you feel are the customer’s shortcomings, as you will want to be considered for future work.  The “No” statement should be used to strengthen the customer’s impression of you and not a basis for breaking a relationship.

So what do I do if I am always saying No?  You will find yourself doing a better job of qualifying customers and investing in those that do not have the characteristics above.  They are out there and as you raise your standards you will find them.  Why are there so many “No” opportunities – possibly because the better companies and professionals have already turned them down! 

Make sure you invest in opportunities where there is a high probability you will want to say, “Yes!”