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When Saying "No" Can Help Your Business

It may seem counterintuitive, but businesses looking to evolve should evaluate, ask questions, and not be afraid to say "no."

[Image: Flickr user Peter Shanks]

We’ve all heard the saying, "The customer is always right." Except when they’re not. Or when you’re trying to move away from a particular area and focus your efforts elsewhere. That was the topic of discussion at a recent meeting of She Owns It, a women’s business networking group in New York City. Adriana Gardella of the New York Times documented the group’s most recent discussion for the Times’ "You’re the Boss" blog.

Here are three instances where saying "no" might be the best things for your business:

1. You are no longer hungry for any business you can get.

Assess your client relationships and evaluate whether they still make sense.As a business grows, your client relationships will change. Deirdre Lord, co-founder of the Megawatt Hour, a New York City-based energy decision platform that helps customers manage and control their energy costs, noted her company had been in its startup phase but was looking to evolve. Last year, for example, the company’s attitude toward all business was, "Sure, bring it on," regardless of the size or scope of the project. Today, Lord takes into account whether a client requires more hand-holding than the company can provide.

2. The project isn't efficient or cost effective.

Jennifer Blumin, founder of Skylight Group, a New York City-based event venue development company that brokers access to historic landmarks for special events, agreed. "When you’re in startup mode, you’re just taking it wherever you can get it," she told the group. At some point, however, you have to evaluate whether the project is efficient for the company. For example, while Skylight could do a number of smaller events in smaller spaces, Blumin determined it was an inefficient use of resources. Now, Skylight only works with venues ranging from 20,000 to 100,000 square feet.

3. Does the opportunity match your objectives?

Focus on key objectives—and stick to them. While launching Hukkster, a New York City-based website that allows users to track products they want to buy and notifies them when the item goes on sale, co-founders Erica Bell and Katie Finnegan, had an overwhelming number of tasks before them. Instead of seeking out every opportunity, the company instead focuses on only three strategic objectives at a time. "We’re constantly pushing ourselves every couple of months to say, ‘What are the three things?’" Finnegan said. They also make sure that all meetings regarding potential opportunities relate back to the three objectives because "[e]very meeting … is time away from one of those other initiatives," Finnegan said.

So, how can you say "no" without alienating customers? William Ury, Ph.D., co-founder of Harvard University’s Program on Negotiation and author of The Power of a Positive No: How to Say No and Still Get to Yes, suggests sandwiching your "no" between two "yeses."

Ury calls this the "Yes! No. Yes?" approach. The first "yes" is recognizing that you’ve done something in the past, that you’re not willing to do at this time (the "no"). Then, end with the final yes, offering an alternative suggestion instead. (For example, "What if we try X?")

Hat tip: New York Times