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Rejecting a customer is good for business

Follow your gut instinct instead of following the money

By Roger Pierce

Sometimes the best decision you can make for your startup business is to turn away a customer that isn’t right for you or your company.

While the money is always tempting (especially if you have none), try to listen to your gut if you are struggling with a decision to play or pass on a customer.

There are several perfectly valid reasons to reject a new customer:

  • The work is not what you do.

  • The work would strain your thin resources to a point where other work is affected.

  • The money offered is too low.

  • The payment terms are painful.

  • You don’t like the customer.

  • The customer has a bad reputation in your industry (for being difficult to work with or for being a late payer).

  • The deadline to complete the work is unrealistic.

Disliking a customer is a particularly difficult instinct to deal with. Business school taught me to “do business” with anyone, that a "sale is a sale" and to leave emotions or opinions at the door. In other words, take their money and carry on.

But that’s not realistic for a startup entrepreneur who must work face to face with the disagreeable customer. It also betrays the entrepreneur’s right to make decisions affecting his or her life.

It's hard to turn down a well-paying customer even when you know in your heart it's a mistake – two years ago, a partner and I took on a $90,000 customer despite our guts screaming, "Don't do it!" Their first check bounced and we cancelled the contract.

Many of us got into business so we could work with people we actually like.

For whatever the reason, understand that it's okay to decide not to take on a particular customer. Make a decision for you that will feel just as good tomorrow as it does today.

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