How to say no to the wrong clients (and yes to the right ones)
Two years into building my first company (a web design studio), I hit the point I’d longed for when we started out: demand for our services exceeded our capacity. Like most consultants and freelancers, our initial response to this challenge was to work longer hours, making hay while the sun shone — but eventually, even for a couple of twenty-something entrepreneurs, that became exhausting. We tried raising our rates, but clients kept buying (the nerve!), and the capacity issue didn’t disappear.
I kept complaining to friends: “We’re so busy!” And they’d respond cheerily, “That’s a great problem to have!” And yes, perhaps it is; but it’s still a genuine problem.
It’s a problem when your work life is too busy — not only because you risk founder burnout, but because you are:
- Too busy working in the business to work on the business — and as a result, you become reactive rather than strategic.
- Constantly playing catch-up, and likely dropping some balls, thereby lowering client satisfaction.
- Following the currents of the market rather than leading the way. And when your unique value lies in your expertise, you need to be leading.
There were only two solutions left for us: hire staff, or start saying no to projects.
The Upside to Turning Down Work
We chose not to hire staff for another three years. Instead, we chose to turn down a lot of work opportunities that came our way. And we did this for several reasons:
- Expanding your team does not necessarily net you more income. It may increase your firm’s revenues, but employees don’t come with a profit margin guarantee.
- We were still early enough in our business that we wanted to prioritize stability over growth. Once we were confident that we could maintain this level of demand over time, we agreed, we would look into growing in size.
- It was clear that while we were beginning to carve out a niche, we were still saying yes to most opportunities that crossed our paths — and we knew that for a firm like ours, specialization was the key to both long-term sustainability and commanding higher fees.
- Focus begets better referrals. Creative service businesses typically get their best work via word-of-mouth referrals, so if you want more of the right kind of projects, you need to make sure you’re only taking on those kinds of projects. Otherwise, you’re guaranteed to generate more referrals for the wrong type of work, which wastes your time and your prospective clients’.
- The right clients are more profitable, thanks to the speed of trust as well as their receptivity to expanding project scope when appropriate.
- And finally, because like most creative professionals and consultants, we went into business to satisfy our own desires to learn and grow, and those drives were better satisfied through the clients and projects that make these things possible.
The decision to stay small and say no more often was only the first step towards solving our too-busy problem, though. Next, we had to figure out two key things: which projects and clients we wanted to say yes to, and how to say no clearly and graciously.
Red Light, Green Light
When we first sat down to define our parameters for saying yes or no to projects, we expected it to be a daunting process. How in the world would we quantify all of the variables that went into a truly satisfying client engagement?
Turns out, it took about ten minutes.
We drafted a Google doc with two columns and a bulleted list in each one, and listed out the qualities that made for an immediate green light (yes) or red light (no). Your version of this might go on a couple of Post-It Notes, or a wiki page for your sales team — the format doesn’t matter, just the content. And the content is dead simple.
Here’s what goes on your YES list:
- Your minimum budget
- Projects with great portfolio potential, if your portfolio helps you land clients.
- High probability of lead/referral generation
- Projects that will allow you to stretch into a new area you’ve been wanting to explore
Some of these may be “ands” and others will be “ors.” (Enough budget is always an and.)
And your NO list might include:
- Clients/projects that don’t meet your minimum budget level
- Low-margin offerings that you don’t need to sell anymore
- Pain-in-the-ass clients (You can often suss these folks out within the first few minutes on the phone.)
- Projects that require lengthy and time-consuming proposals or pitches
- Projects that make you sigh with weariness. (Pass those off to someone who’s more excited about them than you are.)
You may also want to add an amber light column for qualities that should spark caution, rather than an outright no. In our business, for example, we worked with a number of government agencies that required extensive proposals, so that “time-consuming proposals or pitches” bullet went into the “caution” column. Just don’t put too much in this column, or you’ll miss the point of this exercise, which is to make it easier and faster for you to discern between your yeses and nos.
Saying No, Quickly and Pleasantly
OK: you have your green/amber/red light signals defined. Now, how are you going to remember to check new opportunities against your lists?
Let’s go back to basics on cultivating new habits. You need three things: motivation (and I’m hoping you have that now that you’ve read this far), ability (which you’ll have as soon as you jot down your list of yes/no parameters), and what behavioral psychologist BJ Fogg calls a trigger — that is, an existing process you have in place that will dovetail nicely with your checklist.
Reflect for a moment on the system you currently use for fielding sales inquiries: email, phone, etc. This will be a little easier with email, because you have time to craft your response. With phone inquiries, the first habit I had to build was never to make promises over the phone, but instead commit to following up by email within X days, after checking my availability. That gave me an opportunity to review my list, and bow out gracefully if necessary, e.g. “I’m sorry, but we just had several large proposals accepted and we no longer have the capacity to take on your project.”
Here’s how I built the habit of reviewing my yeses and nos before moving forward on business opportunities:
- Set up a document with my list of yeses and nos. Note: because the idea of saying no to anything — but especially revenue! — made me nervous, I appended a little pep talk from myself at the top of the doc, that went something like this: “What I know about saying yes to the wrong projects: a) I get burned out. b) They always go over budget. c) They take up space in my schedule that I then can’t allocate to the work I love. d) They are a dime a dozen; if I’m really hard up for cash, I can always find more of them. What I know about saying yes to the RIGHT projects: a) I get energized by them! b) I make more money! c) They bring in more of the right kind of work! d) They allow me to learn! e) I write about them with exclamation points!”
- Create a daily reminder to review the list, that pops up every weekday in the morning, before I start replying to emails.
- Practice saying yes and no to opportunities as they came in. The key word being PRACTICE. You will slip up and forget to check your list from time to time. You will get scared about money and say yes to the wrong projects. It’s all part of the process. The important thing is, every time you use your list and say no to an ill-fitting client or project, you are making room for more of your best work.
The key thing with the trigger is: it needs to be something that you can’t forget or ignore. So if reminders don’t work for you, figure out what will. Maybe it’s your to-do list, or your calendar, or a post-it note. What is the thing you know will work? Think: leaving your gym bag at your front door so that you have to move it to get out of the apartment.
As for saying no graciously, at first I found myself somewhat apologetic about turning work down, but over time I looked at every inquiry as an opportunity to clearly communicate the kinds of projects we were focused on, because you never know when a prospect might come back to you with the perfect project. (The notable exception being pain-in-the-ass clients, which never got more than a simple, “Sorry, we don’t have capacity.”)
Not only that, but when the truth was that we were just too busy to say yes to even great projects, our experience was that being honest about how booked up we were only increased prospects’ desire to work with us. So we only ever saw upsides to turning people down, clearly and kindly.
The Bad News
I say this reluctantly but emphatically: this isn’t the kind of process you do just once. So long as you’re doing good work, deepening and expanding your expertise, and meeting new prospective clients, you’ll have opportunities to further refine the kinds of clients and projects that bring out your best work, and that are best for your business. So if you’re like me, you might want to set up a reminder for a year from now to revisit your red/green light lists and update them to reflect your current goals and reality.
It shouldn’t take long, but we tend to put it off because even though we know it’s good for our businesses to filter out the clients who aren’t a good fit, it feels hard to turn down work.
Remember, though: the more specific you can be about your yeses and nos, the easier it will be for the right clients to find you — and for you to find them. And the freedom and satisfaction you’ll find in your work will expand exponentially, on every level: financially, creatively, and in terms of your ability to live a healthy life outside of work.
Every time you say a clearer no, you free up space for a clearer yes. And those clear yeses are the projects that will build you the business you really want.