I was recently asked if I had heard of other small businesses facing the difficult decision of turning down work due to workload. I know the question was an attempt to find ways to take on more, push customers out further, or commiserate with other overwhelmed businesses. But I took a different route because I know that feeling overwhelmed has a different root cause than we think. At that stage of being overwhelmed, you have most likely done all of the easy things, like trying to get more efficient and push customers out further, but you are avoiding the hard thing because it is scary for most businesses – the price!
Pricing
Pricing is scary for most businesses because they need a better handle on their pricing strategy due to not knowing how much it actually costs them to make the product or perform the service. And on top of that, they need help charging what they are worth because a scarcity mindset is holding them back from finding the right customers willing to pay what the product or service is worth. But the truth is if you have so much work, you are thinking about turning some of it down, yet you need to grow to reach your idea of success. The simple answer is that your prices are too low.
As a small business owner, your job is to find a price point that is ideal for your business and that your ideal customers are willing to pay. That price needs to be something where you bring in enough work to sustain your business, yet you are making enough profit to achieve your goals, grow, and reinvest in your business. If you’re in growth mode, it is counterintuitive to raise your prices because you feel like you need more work. But the amount of business you bring in typically has less to do with the cost and more about available bandwidth. The work will grow to fill the available capacity. But when you are turning down work because you don’t have any capacity, you will wind up at a point where you don’t have any work because you have made price the lowest common denominator.
Is it the right fit?
A small business’s ultimate goal is to turn down work based on the fit for your company. Is the job in front of you profitable, something you like to do, and working with customers you love to deal with? When you are taking on projects that are not in your wheelhouse or the customers are not enjoyable, you will also reach a point where the workload feels overwhelming. When you are in the flow, doing what you love, it seems to be happening, and you feel like you want to do more and more. Plus, when you are in that place doing business with customers you love and on projects that you are good at, you are more efficient and get more done.
So if you are determining how to turn down work, at the very least, don’t make that decision based on a first-come, first-served model. Determine if each job is the right project for you. Will it be profitable and allow you to help and support the type of people you most closely align too? Make sure you reserve the right to refuse service to anyone. Have an abundance mindset that plenty of your ideal customers are out there. You have to find them!
