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“We said no to Fortune 500 companies,” Tim Bergler of Percipio Group Consulting said during a panel session with 50 entrepreneurs in the room. Bergler was sharing the one piece of advice he would give to new entrepreneurs in the EO Accelerator program in Portland, Oregon. “Don’t be afraid to say no if you can’t do the job for your client,” he continued. His response rang a bell for me.
Recognize the power of n
As I thought about the most successful entrepreneurs I know, I realized that they say no to most “opportunities.” When I reflected on my own companies, I noticed that our greatest successes occurred after we clearly understood what we wouldn’t do.
The general problem is that most people say yes too much. When you start a business, you mostly think about what you will do, which is basically anything to grow the business. So, you say yes to everything and focus on getting as many sales as you can. And while that might work in the short term while you’re smaller, it doesn’t work in the long term and might even keep you smaller.
This is because, as a growing business, resources are limited and can easily be wasted. Saying no is critical because it allows you to focus your limited resources – people, time, money – on the core elements that best drive success.
Related: Stop Overworking Because You Say “Yes” Too Often: Here’s How to Harness the Power of a Simple “No”
Develop your own list of things not to do
While it seems counterintuitive, the most crucial question to ask is, “What Not shall we?” Gather your team and make a comprehensive list of “Don’ts.” Reflect and commit to the outcome. See how this exercise focuses and drives your company.
Companies that focus exclusively on providing what they can deliver for the customer – a product or service not easily found elsewhere – are the successful ones. Think about all the activities you love. Are they doing everything for everyone or just one thing exceptionally well?
Let’s take the grocery sector. Standard grocery stores sell an astonishing range of food products in a super competitive segment with low profit margins. Compare that to Costco or Trader Joe’s, which are high profit and focused on what will or won’t sell. They only stock value-added items that customers can’t find elsewhere. The major fast food businesses – McDonald’s, Starbucks, Dunkin’, Chick-fil-A and Taco Bell – all have a strong list of don’ts.
A recent headline referenced the “biggest stock on planet Earth,” which rose from obscurity to a $2 trillion valuation due to its “Don’ts” list. That company, Nvidia, creates technology that enables artificial intelligence. Nothing else.
Related: Focusing as an entrepreneur means choosing opportunities wisely
The impact of strategic omission
I failed to create a list of don’ts for my first company, a raw materials business that wasn’t particularly successful.
The second time around, my self-storage business was much more focused. We purchased our biggest competitors: Public Storage, Extra Space Storage and CubeSmart. So, we thought deeply about what we could offer that they didn’t, as a way to differentiate ourselves.
We’ve put together a comprehensive list detailing what we didn’t like about those companies. That list informed our “Don’ts” list, which includes:
- Our prices change every day
- Promote or promote extra products/services
- Save on hidden moving costs
- Route calls through a call center
- Act as if our customer is bothering us
- Insurance mandate
- Be a national company
- You put a customer in a space that isn’t right for them
That list is simple but magical. It does four amazing things:
- Determine what you will do. Deciding what you don’t like and what you won’t do is a trick to identifying what you will do, which is basically the opposite. Establishing a list of don’ts creates a clear and inspiring answer of what you will be to your client.
- It becomes the ultimate time saver. By eliminating what you won’t do, you create space to focus on what you will do and improve that offering.
- Simplify the decision making process. Decisions can be on-brand or off-brand; the list makes it pretty obvious.
- Clarifies your brand in a way you otherwise couldn’t. Once you understand what you’re going to do, your business will be more successful and more profitable. Offer something unique that is not a commodity.
The don’t list is an essential business tool. Not only does it limit your business scope, it can also help shape how you operate; your business practices, pricing structure and how you will treat your customers. A plumbing company might forego electrical work but also exclude practices such as overcharging, sending updates, or setting half-day appointment windows. Ultimately, a list of don’ts simplifies your focus and helps narrow down your niche.
Related: How to Say “No” More Often: Why Every Entrepreneur Needs a List of Don’ts
Focus your business on borders
Let’s go back to Bergler, who ran a management consulting firm with a limited space where he could add significant value. He was as selective about the quality of the people on his team as he was about the type of tasks they would do. The resulting quality of work has made them highly sought after. Eventually, incoming job opportunities exceeded capacity. He has abandoned many deals and even referred clients to competitors when he felt his company really couldn’t cope.
As a result, customers began approaching Bergler first because they had encountered many errors with substandard competitors. It has made Bergler the supplier of choice for their best customers. When he chose to sell the business, several buyers were confident in the company’s lasting income due to its 20 years of consistent performance and very high customer satisfaction.
With our self-storage company we have achieved a lot of success in a short time. Our differentiated brand has made us a customer favorite, earning us higher scores than large companies and ultimately making us a great candidate for acquisition when we choose to sell.
When we started a new company focused on vehicle storage, one of the first things we did was shop around from our competitors and brainstorm our list of don’ts.
When I think about the many companies I’ve known in 20 years in the Entrepreneurs’ Organization, I can tell you that there is a solid correlation between success and sticking to a strong don’t list. Do yourself a favor: make your don’t list today.