579: I just turned down a 1.2 million dollar contract

My Business On Purpose

I had a client turn down a 1.2 million dollar job this week. 25% of his yearly revenue. Let’s talk about why?

Good afternoon, Thomas Joyner with Business on Purpose here.

If there’s a phrase that I’ve heard over and over this year, it’s “we gotta make money while there’s money to be made.” There’s a scarcity mindset that is going around in the contractor space. Prices are still on the way up, and yet people continue to build, and work continues to be there for the taking.

So, is all work the same? Is all work worth taking, no matter who the client is and no matter what it costs you? Well, most people today would find a way to make it work. Well, we can hire and train quickly and we’ll find a way to get it done. Straight into emergency mode. Straight into the chaos. And yet, that decision is made out of emotion and not with a plan in place. It’s almost destined to fail or be awful throughout.

I was so proud recently when I sat down with one of my clients and they said, you’d be proud of me… I turned down 1.2 Million dollars of business yesterday. What? I was losing my mind. Walk me through it.

I had someone approach me about a 1.2 million dollar job and I told them we couldn’t do it.

Well, why? I started smiling as I knew where this was going.

A lot of reasons. We don’t have the team in place to be able to get the work done. It would have meant hiring guys we don’t yet trust to keep the rest of the business going. Force training them and sending them out unprepared for that magnitude of a job.

Not to mention the collateral damage of relationships with people who work with us weekly and monthly. What am I supposed to tell them when all of a sudden ⅓ of my workforce is out of commission for the next 2 months and I can’t service the jobs they have sent me all along?

Not to mention we probably won’t be able to maintain the quality we aim for or the work-life balance that we hold our team to. All of which are core values. It distracts us from who we want to be as a team and where we’re headed.

Even though it’s 1.2 million dollars?

Absolutely.

I was blown away. Think about what he just said. 25% growth wasn’t worth it because it was a distraction. Because it wasn’t fair to his team, the business partners he works with on a regular basis, or to his family, as he knew it would be long hours, and sacrificing time with them was not an option.

Proud? Man, that’s an understatement. But here’s what I was most impressed by. This wasn’t a tough decision. He had a filter that he put the decision through that removed emotion from the equation. It was an easy decision that weighed on him about as much as if he turned down a chick fila biscuit because he was on a diet. He had his priorities and stayed the course towards his vision.

That is powerful.

So here’s the question for you. Do you have a filter that you run everything through? Do you know what jobs you want and which ones to steer clear of? Do you allow emotion to push you around and do you see the massive top line revenue number and think…we have to find a way to make this work? That’s short-term thinking. But the work has to be done before that decision is ever made.

I’ll never forget this same client about lost his mind on a half a million-dollar commercial job last year. After that job was finished we came back to the drawing board and built out parameters for when and how to take a job. What was important about billing and draws and retainage? Who does he trust in the industry and how does he work well with them?

That hard work on the front end helped this decision a year later all the easier. He knew what that job cost him from a reputation, a team, mental health, and a family health perspective and he knew how to prevent that from ever happening.

Now here’s the flip side. This won’t be the last massive contract he’s offered. I asked him, do you ever want to be able to take on a job like this? Absolutely he said. Great, now let’s put the work in to build a business that can support that type of job without sacrificing the other pieces. That’s the magic right there. Not letting the tail wag the dog, but building the business that is ready for a 1.2 million dollar contract without being distracted from the vision along the way.

So take the time to think through this. Is every contract or sale the same? Is it costing you things you aren’t realizing…and how do you put the work in to say no out of principal instead of just figuring it out.

That’s good stuff today y’all! Thanks for listening.