Don’t Let The Big One (Profit) Get Away!
I was in Canada fishing for muskies with my son and we were using surface baits when I saw this huge “V” heading for my bait. I immediately became excited and, in an instance, could see a large trophy size muskie hanging on my wall in the Man Cave. I watched the lure and asked my son to man the net. Then, in an instance, I pulled back the rod to set the hook and — nothing. In my excitement, I forgot everything I knew about the art of fishing and I set the hook before the fish bit the lure. I pulled the lure out of the water and my trophy catch was gone. It makes for a good story at the lodge, but I have nothing to show for my efforts.
In the past few weeks, I have seen this happen to more than one of my client’s businesses. The Boss was working to land a huge account. He was getting excited and even planning what to do with the excess profits a large job like this could bring. The issue I saw in every case was the larger the job, the lower the profit margin. The Boss was timid and was not confident, charging his regular rates when it came to the larger jobs. Now I understand, better than most, the benefit of cash flow from these larger jobs and in some unique circumstances, such as a seasonal business, landing a large job for the sake of cash flow. But giving up too much margin for the sake of landing a large job does not make good business sense.
The Boss must have the confidence in himself and his team that, if priced reasonably, his company will “land the big one.” I often told my sales team that their jobs were to get us in the door by selling our quality and follow through so we had an opportunity to bid on the work. My job was to price the work to achieve a “Win-Win” situation. If the only win was for the customer, then we did not do our jobs well enough. If the only win was in our favor, then again, we would have failed.
I don’t ever want the big jobs to get away, but I am not eager to do the larger jobs for next to no profits. As The Boss, you must set the direction for your company and sell on quality and not price. It is easy for anyone to get excited or even mesmerized by the large numbers. This is when The Boss should jump into the teaching mode and educate the staff about the risks to profitability of the larger jobs. Experience will tell you to be cautious and proceed with care when estimating those jobs. An employee working on a commission basis will naturally get excited with the large numbers. The Boss understands the risks and rewards and must make the call. Don’t allow yourself to get so excited to win the big job, or so afraid that you may lose the big job, that you forget the lessons that got you where you are today. Land that big one and tell the tales of large profitable jobs, not those profits that got away!