5 common dealbreakers when running a business
There is a lot of chatter online about business dealbreakers when it comes to selling your business, but what about all the other times? What about all those times when you say yes, but you should really say no? As a business owner, these scenarios can put you in a really difficult position. They can have a negative effect on your bottom line (your profitability), your mental health, your team’s mental health – put simply, it can put a strain on your entire business operations.
There is this certain pressure to always say yes in business (and in life too!). Do any of the below sound familiar?
This customer has offered to pay you for services, but it’s not what you specialize in. You say yes because any paying customer is a good customer… right?
One of your clients makes you incredibly uncomfortable with things they say and do, but they always pay you on time so you “suck it up” and continue to take the punishment.
You have been in negotiations with a customer and they keep whittling down the price. You keep lowering it because you want to make the sale, but it is so low, you’re barely making any profit after you pay for expenses.
You’ve got a full roster of clients (high class problem to have!) and someone new would like to hire you. You say yes even though you and your team don’t have the time to dedicate to their success.
In the end each of these scenarios ends in difficulties for both your customer and your business. #1 and #4 can tarnish your reputation because you didn’t deliver high quality work. #2 can affect your mental health and you may actually start hating doing the work every day. #3 will affect your bottom line, but it also allows others to devalue the work that you do.
So how do you recognize when you are in a red flag situation that you should walk away from? How do you know a dealbreaker has been triggered? Here are 5 common dealbreakers in business and what you should do to avoid the heartbreak that usually comes with them.
A customer wants your services at a much lower rate than usual
Negotiating is normal. Undervaluing you and your products or services is unfair. Period.
Those close to me know I LOVE a good negotiation. And it’s not about winning for me. There is a certain amount that is about control of a situation, but it’s more about how everyone can feel like they walk away a winner. A great negotiation should benefit both parties. If you don’t feel right about it then walk away. Having potential customers constantly devalue your work can have a negative effect on your mental health not to mention the long-term profitability (and viability) of your company. Also, if you’re not making any money, chances are you won’t be in business for long.
THE FIX: If you are going into negotiations with a customer a great approach is to have a range in the back of your mind – your cut off point. It could be a small range or it could be a set price and you aren’t open to negotiation on price. Stand firm in your decision. If a customer just can’t afford it and they need a lower price point, first try removing certain aspects of what they are buying. Perhaps they only get half of the specified package instead of everything. You shouldn’t have to lower your rates if you feel uncomfortable about it.
A customer just isn’t a good fit for your business
It’s called “customer relationship management” for a reason. You’re not two ships passing in the night, you have to be able to sail together. You either want them to keep coming back for more (you put effort into the first sale!) or you want to make sure they are happy so they tell their friends about you. Either way it takes effort on your behalf, but a relationship by nature takes more than one person. If your customer is treating you poorly you are allowed to say no. You are allowed to say you don’t want to work with them. You wouldn’t accept workplace harassment as an employee, so why except it as a business owner? In some cases customers are even an extension of your brand. For example, in the world of media relations, our customers at SongBird not only represent their own brands when they do any appearances, but their appearance also reflects on SongBird’s brand. If they aren’t well-prepared, are rude to the interviewer, or say something offensive during the interview, it can tarnish our relationships as well.
THE FIX: You need to do your homework before you start working with anyone. For businesses who’s purchase cycle is shorter, this isn’t going to be as easy (and sometimes not necessary if you are in a transactional business that doesn’t need repeat business). Take the time to ensure that your customers have the same values and ethics you do. It’s also a matter of making sure you are comfortable with them so you can deliver on promises of quality products and services.
A customer doesn’t trust you even after you explained things
This can be frustrating for both businesses and customers. So many customers we’ve spoken to at SongBird have been burned by other agencies. They’ve been promised the moon, but given a cube of cheese. We’ve even come across people who have spent a lot of money investing in a service provider to not even get a finished product they can use in the end. A lack of trust from a customer can appear in many ways:
You may have had multiple meetings, but they are still questioning the value you can bring to them. On top of that they are asking the same questions repeatedly. (It will likely be the same if you are working with them!)
They insist you do some work for free to show what you can do for them.
They ask for guarantees even if you work in an industry that is hard to give guarantees.
THE FIX: First, understand the history behind the behaviour. Then adjust your approach. If they are still apprehensive and you are going in circles, walk away. You don’t have to shut the door on the opportunity, but it doesn’t make sense for both parties to waste time rehashing everything. In these cases, it’s always good to have some sort of takeaway materials that the customer can review on their own – especially case studies with real world examples. That way they can pick up the conversation again when they are ready and comfortable. It doesn’t do you any good to force someone into a working relationship.
You’re too busy to say yes to a new customer
It’s hard to say no to an opportunity because you really don’t always know how it will turn out. And, while having too much work seems like a good problem to have, if you’re burnt out, it will always end badly. It will not only affect the last customer you brought on that you couldn’t handle, but also the rest of your customers whose services suffered so you could take on something new.
THE FIX: When you’re building a business it’s all about reputation. In the end customers appreciate honesty rather than mediocre work. Build a referral network of people you trust so you can refer these customers to your network. It reflects better on you when everyone is happy. And not only that, your referral network may return the favour in the future when you DO have the bandwidth to take on something new.
A customer wants something you don’t regularly do
Whether someone misunderstood exactly what you do or they like part of what you do but want you to adapt to what they need for the rest, trying to change yourself to fit what a customer wants can be exhausting. It can be tempting to say yes because you want to make a sale. However, if you can’t deliver on your promises, that customer won’t stick around, and they certainly won’t have nice things to say about you to their network.
THE FIX: Like the point above, have a referral network in place. Sometimes it may work out that you could partner with someone else to deliver the full package, and sometimes it’s just better to introduce the customer directly to someone who can give them exactly what they want. That way when they need what you have to offer, they’ll come back because they know they can trust you.
While these are 5 common dealbreakers you may face in business, it’s important to understand unique situations that could come up for your business. It’s always good to have a plan in place to try to stop a disaster before it starts!
Not sure where to start? Or maybe you’re currently facing a challenging situation you’re not sure how to solve? Book a free 20-minute consultation with me and we’ll figure out your next steps.