Making the decision to turn work down can be agonising. After all, most businesses are usually desperate to take on new clients or get closer to existing clients by doing more business with them. So when should you turn work down?
The most significant consideration for most companies is capacity. Taking on a new client or project can be an exciting opportunity, but only if you have the time to meet the deadline.
There is, of course, the option of taking on freelancers or contractors. But you’ll need to make sure that whoever you hire meets your standards and does as good a job as you would. In some cases, managing contractors and checking their work can be almost as time-consuming as doing it yourself.
It might make sense to turn work down because it simply isn’t profitable. When you compare the client’s budget or the sum being offered with the amount of work involved, you might find that you’ll end up making a loss.
Occasionally, companies accept orders or projects as a loss leader. In other words, they won’t make any money from the project, but they might be able to upsell the client or showcase their work.
Whether you’re a big or small business, rejecting a work opportunity is complicated. We spoke to five SME leaders about their experience of turning down work and the impact it had on their business.
Focus on your long-term strategy
Mark Easby, managing director of brand consultancy Better Brand Agency, said that turning down work is a brave decision, especially for small businesses.
“It’s easy to say ‘yes’ to projects for the sake of short-term revenue, but this can become a distraction and compromise your long-term strategy, as well as your growth and profits.
“Focus is everything – you’ve got to be an expert. By focusing on the services you offer and your value proposition, you’ll ensure you’re attracting the right type of business. It gives you the confidence to turn work down if it’s the wrong type of project or the wrong type of client.”
Be confident you made the right decision
Simone Vincenzi, a personal development coach, has turned down work to focus on building his business. In the past five years of running GTeX, he’s turned down a number of clients.
“As a small business owner, it’s not easy to decline an opportunity, especially when you need money or you’re talking about a substantial contract,” he said.
The last time Vincenzi decided to turn work down was when a client refused to work with his team and only wanted to work with him. It was flattering, but Vincenzi took the long view.
“If I’d agreed, it would have been an easy sale,” he said. “But to grow GTeX, I decided to step down from the delivery side, unless a significant amount of money was involved. So while saying ‘no’ cost me the client and a few thousand pounds, I know I made the right decision. By focusing on growing the team and onboarding clients – specifically, those that value outcomes more than working with the founder – we can keep growing without compromising our great customer service.”
Turn work down if the client’s not committed
David Morel is CEO and founder of recruitment agency Tiger Recruitment. The company, which was founded in 2001, employs 40 people in its offices in London, Dubai and Manchester.
According to Morel, considering the time investment is an essential part of deciding whether to turn work down or not.
“If a client keeps changing the spec and doesn’t seem to be fully committed or know what they want, then you need to make the decision to step away.”
Morel believes that spending time on projects where the economic return is minimal is bad for productivity.
“You need to be ready to turn work down before you’ve committed too much time and energy,” he explained. Businesses can then use these resources to go after work that offers a better return and is more aligned to their core skills and target markets.
The company won’t necessarily turn work down if they don’t get an immediate return on investment, however.
“We might reduce our fees if we’re working for a charity,” said Morel. “We might also accept a lower fee for some work if we believe that we’re going to get considerably more work in the future. So we consider the volume of work when we’re deciding whether to say ‘yes’ or ‘no’. You have to balance margins with volumes. We’ll also do a deal on fees if we’re working for a company on an exclusive basis.”
Don’t sacrifice your USP
The desire to focus on a key market has prompted Paul Russell, CEO of luxury training company Luxury Academy, to turn work down.
“We turn down business regularly, usually because it’s an enquiry from a company that’s not in the luxury market. Our training is specifically for luxury businesses and doesn’t always translate to those in the mid or affordable market,” he said.
“It’s important to maintain our unique selling point (USP) as a training company exclusively for the luxury market. We can’t be seen to have mid-market or affordable tier clients, as this might cause our luxury clients to question our USP.
“We’ll also turn work down from companies we don’t feel would be a good fit. If we don’t think we’re going to connect, then it’s in neither party’s interest for us to progress the business relationship.”
Not all business is good business
“When the company was first founded in 2014, we went after everything and anything we could,” said Sam Rogers, commercial director at Rampart PR.
“We offered discounts, free trials and short contracts. And we assigned ourselves some back-breaking Key Performance Indicators (KPIs). Essentially, it was anything to keep our client base growing.
“You live and learn, and we quickly established that not all business is good business. It’s been crucial to our success ever since to be ruthless about who we work with, and what constitutes a good deal – both for the client and for us.”
Today, Rogers takes a different approach.
“When a potential client tries to beat you down on price, has other-worldly expectations, wants to negotiate non-standard payment terms, or gives outlandish responses to the most normal of requests, alarm bells start ringing,” he said.
“Follow your gut instinct, but use your head. If something doesn’t feel right, it probably isn’t. Don’t be afraid to walk away.”
Read more Be the Business’ articles about management behaviours.