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A lot of service businesses try to be everything to everyone. Whatever lead or contract that comes around is seen as additional revenues and we all know that turning down additional revenues is a big no-no, right?


There are times when turning down a contract or potential customer may make sense from a business standpoint but not from a revenue standpoint.

Sometimes hard decisions need to be made to turn down revenues that don’t stay true to your model in order to focus on what you do best.

The point is, not every customer is right for your business model. And if the customer is not right for your business model, then this is a contract that should be rejected.

It’s a hard thing to do and you need to be prepared to sacrifice short term revenue gains, but this sacrifice will lend itself to many long term advantages that will ultimately help grow the business in more ways than one.

Here are the 3 big reasons for why your service business should turn down contracts that aren’t suited to your model and service offering.

Reason #1: Increased focus means increased performance

My philosophy is that it’s better to be something spectacular for a certain group of people rather than trying to be something that’s just good for a broader audience. Offering a service to a broad audience, for the most part, means that you will have a hard time being the best at what you do due to lack of focus.

There’s a reason why lawyers specialize. You’re not going to see an immigration lawyer offering corporate law services, even though they both passed the bar exam.

Even then, corporate law is still exceptionally broad.

Do you want to service small businesses? Large enterprises? What industry? If you only offer incorporation services to tech startups, it’s evident that you have a very clear focus.

As a result, you are more exposed to their specific needs, requirements and you are able to further develop your skill set specific to this target market. It’s highly likely that you can become the expert when it comes to this market segment and therefore you will develop more expertise about these types of businesses over a law firm with a broader focus.

Accounting firms are generally notorious for trying to please everyone. Many provide such a wide range of services to such a broad audience.

We’re far from perfect, but if you take our firm, Xen Accounting, for instance, part of our model is to offer stress-free accounting services and one of the ways we help achieve this is to do everything virtually as we find this way of working far easier.

Sometimes we get leads requesting in-person meetings and we’ll say straight up that if an in-person meeting is required, then we’re not the right firm for your business. We have turned down countless leads simply because in-person meetings does not fit into our model, our style nor our philosophy.

Focusing on clients that are right for our model means that we can hone our skills when it comes to our specific way of working and allow us to work with like-minded businesses who we can develop expertise in.

Some of our colleagues understand this approach. You will constantly see these kinds of firms turning down contracts that just don’t make sense for their model. They could offer audit services, but they choose to turn them down. They could offer bookkeeping services for companies outside of their country, but they choose not to, simply because they probably couldn’t do them as well as one’s that are specialized in that country.

Smart companies focus on a market segmentation strategy and service offering so that they can perform this service to an exceptionally high degree of quality and satisfy this particular market at a level that would not be possible would they have had a broader focus.

Focus means making hard decisions when it comes to who you will be working with. Anyone that has had to make these decisions knows how hard it is to do.

Staying true to your model and having the right focus on who you work choose to work with takes discipline, but if the right decision are made, the longer term benefits of turning down those that aren’t right for your business will outweigh the short term revenue gains that come from accepting customers that don’t suit your model.

Reason #2 Marketing

It’s far easier to craft a marketing message geared to a specific audience rather than to craft a marketing message to a broader audience. If your message is too broad, your message will fail to resonate.

In a previous blog post, I wrote about a national accounting firm that uses the following marketing message which for some of their adverts; “Accounting. Consulting. Tax.”

You will never resonate with any potential clients using a message like that. It can mean something to literally every human on this planet. A message like this does not attract potential customers, it actually repels them.

One of the main objectives of marketing is to get your message to resonate with prospective customers who agree with what you’re saying in order to spur interest in what you do and ultimately in hopes of someday working together. But it’s very difficult to connect with a message if you’re speaking to everyone out there. Our attention spans are too short and people will block out messages that aren’t ultra-targeted to their specific situation.

Focusing on a specific market segment means that your marketing efforts will resonate far more with the group that you’re directly speaking to. When your message resonates, people will contact you. When people contact you, you have a chance to gain a new customer.

So while it may seem counterintuitive, limiting who you market to can actually translate to increased customers if your messaging is done well.

Reason #3: Company culture

When you focus on a particular market segment with a particular service offering, you tend to attract people to your company that connect with your market segment and your approach. As a result, you end up with a company full of people that understand the company’s goals, direction and values.

Company culture is a very special thing. When a strong culture exists, the level of teamwork increases, the level of satisfaction that everyone gets from working together increases and ultimately performance increases.

Upon accepting customers or contracts that aren’t right for your business, it is possible to see a dilution of your company culture. This does affect your bottom line, it just usually isn’t something that is measured.

To achieve a strong company culture and to reap the rewards of a strong company culture, focus certainly needs to exist and this focus only comes about from working with businesses that suit your model exceptionally well.

Stay true to your model.

Determine what you stand for and what your purpose is. From there, you can start determining your focus, who you’re best suited to work with and what your service offering should be. Once this is done, it takes discipline to only accept the right customers and the right contracts for your business. If the discipline is maintained, the long term rewards will be reaped.

This blog post is brought to you by Ryan Lazanis, CEO and Founder of Xen Accounting – a completely cloud-based, 100% paperless Canadian Chartered Accountant firm which combines online accredited accountants with innovative software. Xen Accounting is also the first professional accounting firm in North America to accept Bitcoins as payment. 


Ryan Lazanis teams up with Josh Zweig, Co-Founder of LiveCA to share insights on what it takes to attract the right kind of customers for your business. Get the entire story in our #smallbiz_expert Twitter interview!