The Power of the Word ‘No’
Why saying ‘yes’ to some jobs can actually hinder your business practices and revenue.
Most business owners would subscribe to the concept that saying “yes” to more work (and thus more money) is always a good thing. I’ll make a bold statement: Learning when and why to say the word “no” to your clients can actually be very powerful and profitable. It took me 10 years in the wrap industry to figure this out. Now, I don’t want to come across as negative or send a message of declining work that’s “below you” or “not important.” That’s not my mission at all. Our small $65 jobs are just as important as fleet jobs that bring in thousands of dollars in revenue. It’s the projects with heavy labor and minimal ROI that need to be reconsidered.
At the end of 2013, we met with our accountants for tax preparation. My partner, Dallas Fowler, and I had just finished another busy year in the wrap business. We successfully taught 10 wrap classes across the US for Roland, gave demonstrations at four large sign and graphic shows, and our staff kept busy the entire year on large projects. But at the end, we were barely profitable. I looked at our accountant and said “So, we basically made enough money to buy a used Honda Accord?” All of our employees and owners were compensated, insurance was paid, bonuses were handed out, and investments were made back into our business. Some years are more profitable than others, depending on the economy and how your business is set up. Sometimes we hit those home run jobs or land clients that catapult us to another level, allowing us to grow and be more profitable than we ever imagined. But this year wasn’t one of them. When I sat in my accountant’s office, realizing our end-of-the-year profits were way off, it made me step back and re-evaluate our business. It was the first time I felt deflated and like our momentum had come grinding to a halt.
Owning your own business can give you a drive that can’t be purchased or taught. But, it also instills a small fear in the back of your head – of the possibility of failure or closing your doors. For me, that was (and still is) in the back of my mind. Because of that fear, I was afraid to say no. We took on jobs that required tons of labor to achieve what our clients wanted or that weren’t profitable. We accepted projects that weren’t even warrantied surfaces just to please our customers and show others we could wrap almost anything. After getting back from our CPA’s office that day in 2013, I sat down and went over what type of work and clients made us money and what jobs didn’t. Combing through our projects to calculate design time, administrative time, production/print time, installation, and quality control allowed us to really pinpoint our profitable jobs.
We realized some of our services were priced too low, and we should have declined jobs that weren’t practical. I’m not saying the jobs that we now say no to are the same ones that you should decline as well; I challenge you to really look at what pays your bills and allows your company to grow on a yearly basis.
What services are we charging too little for? This isn’t just about saying no. It’s saying that we’re not charging enough for this service compared with the labor it requires, and from this day forward, this is our new rate. Our rates and fees for removing vehicle wraps – which can really add to revenue – were off by 35 percent. We timed five removal jobs to calculate the average time it took in labor, materials, and administration. This small, simple change has allowed us to grow and hire another employee who only removes wraps and gets our vehicles prepped and ready. We also realized we weren’t charging enough for artwork and design time. We aren’t just creating artwork: In many cases, we are creating a brand for the client or company. This service was priced about 25 percent too low. This change allowed us to finally hire another full-time designer and take the weight of design time off our plates. It also allowed us to work on our business instead of in it. When you step back and realize how much money you’re losing by undercharging for the work you do, it can be life changing. It can also transform your business.
The jobs that were making us work late-night hours and clogging up our production schedule were the projects that were keeping us from being profitable. The retail side of the wrap industry can really slow you down if you don’t know how to handle it or charge the right amount for what’s really required. Motorcycle wraps, helmets, interior car wraps, internet kits brought to us for installation, or clients really not knowing what they wanted ultimately hurt our business. I personally know companies that do these jobs very well and are profitable. For us, it just wasn’t the case.
To give you an idea: Our typical helmet wrap would require a meeting with the customer, design and email proofs, approval of color scheme, and then production and installation of the wrap. The true price for us to be profitable would be around the $200 to $300 range. If the helmet wasn’t installed properly, we would also have issues with the film and longevity. Wrapping a helmet for a client at 1 a.m. to meet their deadline for $150 can be very challenging, especially when you have $12,000 worth of box truck wraps waiting to be completed at the same time. In our area, there are two great airbrush artists that will paint helmets for that same price. That’s when you have to ask yourself what’s really important. Is this a job that will put us out of business if we decline it? The answer for us was no. After seeing how much labor and time was required to achieve some of these jobs, we realized it was hurting our business, not helping it.
We don’t just say no to our clients: We educate them on each job and what’s really required to achieve the quality of work we’ve taken pride in for more than 15 years. If a client wants a helmet done, we now have them follow our procedures on timeline and final pricing. We don’t fully wrap motorcycles anymore; we design and install accessible areas on a bike that last. We don’t wrap interior car parts due to warranty issues and longevity of complex pieces and shapes. We no longer install graphics purchased online by our clients; we have no way of reproducing these if any issues arise from the installation process, and we can’t warranty film that we didn’t produce. Most of these clients want it done right away and want to pay less than what the graphics are worth. Saying no to these types of jobs allowed us to focus more on work that was cost effective. We were able to take on more projects and clients, which increased our cash flow immediately. Flushing out the workload that took too much time to complete made more room on our installation calendar. Our clients that demand a motorcycle wrap now follow our guidelines – or we don’t do the job. It’s not being boastful or rude. It’s just declining projects that will hurt you more than help you.
After our rules and price increases were implemented, the next year at the CPA’s office was night and day. We had almost the same amount of sales as the previous year, but our profits had risen by 32 percent. It was a breath of fresh air and really motivated us to evaluate our process more often. It also solidified our philosophy to be unafraid of the word no. Your company will not go away just from saying the word no. The refused motorcycle helmet or internet stripe kit will not put you out of business. But you could run yourself out of business by saying yes to undervalued jobs or installing a wrap that won’t allow for your standards of quality. Stay true to your pricing and process. Educate your clients at every opportunity and let them know what that job truly requires. And last, but not least, don’t be afraid to say no!
Matt Richart is the co-owner of Digital EFX Wraps, a full-service, one-stop shop in Louisville, Kentucky. Matt leads country-wide demos and training sessions on how to sell, market, design, and install for the wrap industry. Follow him on Twitter @digitalefxwraps.