the art of saying noThere's nothing like the buzz of a winning over a new business, particularly given today's economical conditions.
Some business owners have trouble saying "no". This often costs them financially and stunts the growth of their business. If you're an entrepreneur or a sales person, turning down an offer may seem awkward. However, if you don't stop to analyze what's important, saying "yes" rather than "no" could take you on an unexpected and costly detour.
But saying "no" does not only relate to declining a task, it also involves making strategic decisions that you will have to make as an entrepreneur. The direction you take your company depends solely on how you use the word "no" to turn down poor opportunities.
Some may seem like you've hit a gold mine when aligned with your company. You need to however, know what will provide long-term growth for your business and what won't.
Here are a few reasons why you might want to say "no" to a new business prospect:Know what's Right
Sometimes a prospect that comes your way may not be the best fit. Perhaps, their objectives don't mesh with yours or their long term plans don't fit well with your goals. Whatever the reason, always think long-term if you decide to go with the prospect of a new business. You can even increase your profits by saying "no" to some of your current situations.
Suppose you have a customer who consumes a lot of your resources but has not paid his or her dues. Working on credit, if they ask for more credit for your services the right thing to do here would be to say "no". You're already losing money serving this customer. Saying "yes" would only do more damage.
When dealing with a new business proposal,
· Consider whether they're a good fit with your company.
· Consider the clients that you're targeting. Are they going to be willing to pay the rates you demand?
· Before going into business think about whether the proposal is adding or detracting from your margins.
· What's in it for your existing customers? Will it be a onetime buy or frequent buying?
· Are they going to be high or low maintenance?
Going with a new business proposal could hurt you in the long run especially if you're at full capacity. Following the rules of economics, the laws of diminishing returns is what fits here. It states, that a decrease in the output of production occurs when one factor of production (land, labor or capital) is increased while other factors remain constant.
What that means is that if you're already at full capacity, taking on another business could lead you to an unhappy new client, a lack in performance, or decrease in the value of service you provide, which may affect your existing clients.Budgeting
You might have great synergy with the proposal, but you need to focus on your budget as well. If you already have an outstanding product or service, don't sell yourself short. If you can't afford the payment plan for the proposal refer the prospect to another business that can.
Taking on a project when you're already on a tight budget, would deplete your resources faster than you'll be able to recover them.
Being able to recognize when a lead isn't a great fit is crucial when it comes to sustaining growth. Saying "no" could keep you away from devastating opportunity costs, lawsuits, or something that you're not prepared for. So saying "no" to an opportunity may work out better than you think.
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