Thanks, But No Thanks

How turning down clients could help you grow your business.
From the March 1998 issue of Entrepreneur

It wasn't too many years ago that I did something I thought I'd never do: I turned down business. Just starting out, I was eager to accept work from almost anyone who had not been convicted of a felony. But as time went on, I realized that was a foolish, naive approach to growing my business.

Wise businesspeople know they have to serve a targeted market. When you try to serve everyone, the quality of your work diminishes.

Turning down business is tough to do because, for many of us who own small companies, there may not be that many customers to begin with. But growing your business is like investing in the stock market: You need to stick with it for the long haul, and you need to stay true to your long-term plan.

For a small business, that means identifying your target market and setting high standards for how you will do business and whom you will serve. After all, if people you do business with end up costing you money and aggravation, then they aren't desirable customers--they are hazards.

Spotting The Hazards

Maybe some of your current clients should be on the "cut list." Take a look at whom you serve, and I'll bet a number of names jump out as "problems" in one way or another. For instance, which ones:

  • are never satisfied with products or services, no matter how much you try to please them?
  • think the rules don't apply to them when it comes to paying their bills on time, returning rented equipment, or treating their purchase with reasonable care so it doesn't break or perform improperly?
  • expect more than their fair share of product or attention, or interpret "follow-up service" as a 24/7 proposition?
  • require too much of your time to accommodate their requests?

It's easy to overestimate your abilities and underestimate your need for help. If you don't know your market and who your ideal customer is, you can fall into the "trying to please everyone" trap. That's why it's a good idea to periodically do a reality check. Compare who you think your ideal customer is with who they really are.


Leann Anderson is the owner of Anderson Business Resources, a Greeley, Colorado, company specializing in customer service, marketing and business etiquette. E-mail her at landerson@ctos.com

Saying &flashquotNo&flashquot Nicely

Turning down a client or dissolving your relationship with a customer calls for great tact, lest they mark you as someone who is hard to do business with. Here are a few tips to consider when it's time to say "so long."

  • Try not to refuse outright or belittle the importance of the request. Instead, ask for time to review the terms and requirements before you give a legitimate reason for saying "no."
  • Respond to a request by saying you can't do it for the price they want.
  • Indicate that the needs of your current customers are a priority.
  • Inform customers on the "cut list" that you are trying to stay focused on your target market and provide products and services to customers that fit your niche.
  • If you can, in good conscience, recommend someone else who might be able to take them as a client.

Of course, try never to offend a customer. You could hurt your reputation. But by cutting the ties, you afford yourself and your staff extra time to tend to your most profitable customers and do a better job of attracting more of them. The ideal outcome for your business is eliminating a hazard that depletes your resources without giving profit and satisfaction back to you.

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