Grow by saying “No”. The power (and necessity) of turning down work.
It’s a cruel irony that, sometimes the best thing you can do to grow your company is turn down a paying customer.
In all our work with leaders of creative and tech businesses, we continually hear stories that start something like this…
“I just knew from the off it was going to be an absolute nightmare.”
“We’d never have agreed to do it if we didn’t need the cash. Nine months on and we’ve still not been paid!”
“From the first meeting I was worried. Six months in, it nearly took the whole business down.”
It’s counter-intuitive to think that you have to be able to say “No” to new business when growing your company, but we’re convinced it’s true. And after we recently turned down a £250k opportunity ourselves, it felt right to share some uncomfortable truths about why (and how!) to say no to paying work.
The bottom feeder
If you’ve been doing a lot of one-off, low-grade jobs repeatedly, with more and more of them keep coming in, you’ve probably begun to feel an uncomfortable trifecta emerging of customer expectations rising, profit margins shrinking and pressure to lower your prices (even further!) mounting. If this is you, then you’re in the trap many call “a race to the bottom”.
Take it from us, you’ve probably got less than two years of trading left if you don’t stop what you’re doing, start saying no to these kind of briefs and take some time to reposition yourself for progressively higher grade projects.
The death star
This is the opposite problem. A big, scary, shadow-causing brief arrives with the potential to sink your entire company, swallowing up all your resources, time and attention. Yes it could double the size of your business, but it’ll more likely break you from the demand of having to scale up so quickly.
The shiny object
Similar to the death star – but even more enticing – are the projects that are attractive and somewhat within your capability but take you away from your core. A world-class baker doesn’t start selling fish. A PR firm shouldn’t try to be a web developer. Web developers typically don’t do well trying to create a consumer game. And a game house will get pulled off mission by attempting a brand project.
Most entrepreneurs that have been around a while and have battle scars to show off will tell you the truth that you count the cost of these kinds of projects. Once staff begin leaving and customers start getting confused as to who you actually are, you’ll twig that a bad call was probably made.
The nightmare in waiting
An aged and distinguished mentor once said to Matt, our MD, “The people who will be the biggest pain-in-the-bum are always kind enough to let you know the minute they shake your hand“. The way Matt tells the story, his mentor was making a point that you have to listen to your gut. And when you’re with someone and just get that feeling of “Oh, this probably isn’t going to go well” then 9 times out of 10… guess what. Trust your instincts. Even when it potentially hurts the P&L.
It’s a shame that some of the biggest brands can be some of the worst payers (retailers in particular). When a client gives you the privilege of a crystal ball showing that they’re going to constantly barter you on price, payment terms and value, you have to wonder just how viable your internal justification is of “Well, it’ll be a great case study on the website!“.
So, how do you start saying no?
The first and most critical step is to step back and do the thinking in advance about what kind of work you want to grow your company with. At the most essential level, this means defining what some call ‘the core’ of the business. Others talk about a mission or purpose statement. At Form, our core is “equipping creative leaders to build remarkable organisations”. We’ve decided that anything that draws us away from that brief doesn’t get a look in. So last month we had to say no to a £250k opportunity because it was outside of our core and we weren’t ready and willing to diversify.
Think about it like this… if your business is building world class websites for fashion-houses, then think long and hard before saying yes to the creation of an e-commerce platform for a caravan company!
But what about briefs that pass the ‘mission test’ but still feel dodgy / unhelpful. Well, there’s a bit more science to apply – often called ‘pre-qualification’.
Minus the jargon, this simply means laying out a set of criteria you judge incoming opportunities against. One of the world’s leading creative companies that we know has a bunch of questions the team ask of any brief and give it a score of 1-5. Questions like:
“Is this a good brand for us to work with?”
“Do we have the capability in house or in our freelance network?”
“Does this give us the opportunity to make a genuine impact in our target sectors?”
“Is there trust there and can we see this growing into an ongoing relationship?”
“Can they afford us and will we make a margin?”
…and so on…
If an opportunity seems good but scores low on more than a couple of those questions then the team agrees to walk away and signpost the client to another supplier. The point is to do some up-front thinking off the battle-field, so you can make better decisions in the heat of the situation.
So what about you? What criteria would you have? (How) do you say ‘No’ to potential work? Let us know in the comments below.
We cover these kind of ideas and more on Invent – Form’s six-month growth programme crafted specifically for leaders in the UK’s creative and digital sector. If you’d like to know more or book onto the next cohort beginning with a trip to Berlin in June, then click here to learn more or email firstname.lastname@example.org.