Why Compromising Can be Bad for Business - How to Say "No" and Get Ahead
I ran into an interesting quandry with my business over the past several years.
When I began, everyone wanted a website, and they were willing to pay to have the site designed. This was when things were going well for people and business was booming.
Then we crashed.
At that time, website design stalled. Those interested in a site needed one that cost less money (understandably) and they began seeking places to get cheaper sites designed.
This of course makes sense: when times are tight, you need to save. When starting a business in tight times, you need to save where you can.
As the business owner, though, I had a choice to make: reduce my prices or stop designing altogether for a while.
I couldn't compete with some of the other companies who either worked from out of the country and could offer much lower designs or who were starting off, needed a portfolio, and were willing to do the jobs at a cheaper rate.
At first, I started doing jobs for less money. I needed to make a living, I felt, so I needed to be competitive. I found myself taking jobs that paid little but consumed a lot of time. I realized I was making way less than minimum wage on some of those jobs, and spending an enormous amount of time working to do so.
I learned first-hand this flaw in compromising on price. You don't get ahead when you price your products or services so low you can't pay overhead expenses.
So I cut back on web design and began to focus on the writing end instead. I'm glad to say for me this worked. I enjoy writing and particularly enjoy working with businesses on the writing end.
I have recently received several emails from previous clients. Some of them go something like this. "I'd like you to do XYZ but my funding is limited and I can get another company to do it for $XX. Can you match that?"
At times it is possible, but I have learned to say no.
Compromising in business, for whatever reason, always comes with a price. Insecurity can lead to compromise, and, says business negotiation trainer and CEO of Camp Negotiation Systems Jim Camp, chronic compromising can be the single most harmful behavior pattern a business owner can fall into.
Compromise won't help you achieve the best results. It can overtax you and deplete your bank account. Learning to say "No," says Camp, is key.
Of course, a business owner, particularly someone new or someone at the helm of a company that may be floundering, may find it difficult to turn down business, or to compromise on something like a price.
The problem with compromise, of course, is that when you do it one time for one client it is easy for it to become habit.
If you are continually working for less money than you are worth you run the risk of working but not making enough to cover expenses.
At the same time you pass up clients who would pay for your services because you are too busy with other clients.
Also, if you compromise for Client A and Client B finds out about it, you're going to have to make a compromise for Client B.
Where does it end?
My goal this year in business was to hold tight to what I needed to make in order to make work worth doing.
The last letter I received about doing some work for someone who also had someone else who could work for cheap caused me to pause.
Web work has been slow; do I take it to take it, or do I pass it by?
Have you had to compromise in business lately? If so, how did you decide it was the best option, and are you happy with your decision having done so?
