Success Comes From What You Say No To

Clarity leads to focus: Define who you are and what you do and say no to all the other business.

In creating your brand identity, rather than being all things to all people, clarify who you are and what you do best – the key is to be specific and relevant. Success comes from saying no, not by saying yes. For employees, clarity aids focus, and with focus comes results.

From my experience

When I purchased Hamrick Heating and Air in 1989, I intended to build an HVAC business serving the new construction industry – an area with low-profit margins.

Why did I approach customers in an industry with low margins? I was familiar with the industry and model. It was what I knew. At the time I had just sold a new construction insulation business, which made 2% net-profit on an average sale of $800.

My rationale: If I could sell higher ticket HVAC systems, I could increase net profits. Logical, right?

Initially, to grow the business, I would call on builders in the new construction market, and I continued with this strategy until Mr. Hamrick, the old owner who helped me for a few months, informed me about a change out he had sold. My response at the time: What is a change out? Now, I laugh when I think about this question.

After discovering the change out market, my eyes opened. In one day, we completed the job, benefited from 30% more gross profit, and we received payment before we left. There were no accounts receivable, and I am a fast learner.

It was the starting point. I changed my focus on change outs, and in return, increased profits and cash flow for the growing business.

Mean something to everyone, or mean nothing to anyone.

Discovering the change out market brought both business clarity and personal focus. We defined our compelling point of difference from the competition and strengthened our identity.

Canvassing – or cold calling – was the same strategy I used to grow my previous new construction business, and we continued with it for new change out customers; however, now I made 15% net-profit with no accounts receivable. Eventually, we said no to the new construction market, and shortly after we left the market altogether.

We knocked on doors and set appointments with homeowners considering replacing or updating their heating and cooling systems. Then we ran those appointments and sold systems. I duplicated this process with four salespeople.

Switching from the new construction industry to change outs meant focus or more clarity – and as a result, higher revenues. This change of focus took place immediately; however, mainly due to fear on my part, it was over a year before I said no completely to the new construction industry.

Ever so often builders would present new house plans and ask for a quote, but we avoided the temptation of being all thing to all people. They found it strange we no longer worked in the new construction market. Our response was simple: It’s just not who we are, or what we do. We said no.

Maintain a clear vision, and avoid temptation.

Our clear vision: High value, high quality and high margin business and with high-quality service, customers pay a premium.

Redefining a household brand

Walgreens, the pharmacy chain, said no to the restaurant industry to clarify and focus.

In his book, Good to Great, Jim Collins notes how switching from a generalist to a specialist model made the company more profitable. The announcement from the CEO rocked employees, but without the change, the chain would have continued to deliver products and services, which were unprofitable for the company. Many of you need to say no to the unprofitable work.

Clarity comes first.

Like the example of Walgreens, I have clients who provide unprofitable services and products due to a lack of business clarity, identity, and fear. Focus only on what contributes the most value to your business, to discover what that product or service is clarity must come first. Without clarity, unprofitable services distract and creep into the business model.

From my experience.  

Too often I hear complaints from clients about the lack of opportunity. Instead of complaining, say no to low opportunity calls and create a business relevant to the customers you want to serve.

Less is more.

Businesses that continue to be all things to all people, in the process, they lose clarity, and relevance in the market. Many of your companies have grown organically without focus. As a result, the business becomes what you allowed not what you created. We create our future by saying no to what we don’t want.

As organizations grow, redefine the brand strategy with a clear and targeted identity. Communicate your specialization effectively, and say no to clients who don’t match the identified target audience. Then drive the clarity into the culture and make it clear to employees what behaviors lead to success.

In my heating and air business, it was simple.

• Set appointments.
• Close business.

That is all we did. As a result I had four sales people, seven install crews and two technicians – a very different model.