The Eagle Blog

Not All Business is Good Business!

Eagle will celebrate ten years in business at the end of August and I have no complaints about our journey to date. At the beginning I can vividly remember the emotions … excitement at the prospects, euphoria as all of the little pieces came together, terror at the prospects of what might happen and a fear that maybe I would not be able to pull this off.

I had a good background in sales, and had learned much from previous bosses. Yet starting and running a company is different from being a sales person or even sales manager. One skill that I learned early in my sales career, and that I often observe to be missing in young sales people today, is the ability to understand what is “good business” and what is not.

Quite often I see the look of disbelief in the sales person’s eyes when I tell them to walk from a piece of business. They sometimes argue fervently in favour of the deal, because it means dollars in our pocket! They cannot understand that sometimes dollars are just not enough … and very often there are not enough dollars!

Companies of every type are measured based on ratios and percentages. If a company today has $1 million in bottom line profits that sounds good, but if that is based on $100 million in revenues … it is not so good! Any kind of market fluctuation could cause that company to go out of business. So … reasonable margins are needed in order to preserve a healthy bottom line.

If company profits are not enough to reinvest in the company to keep up with industry trends then that company is already heading out of business … it doesn’t quite know it yet!

Sometimes the cost of doing business is too high. If a client is a very high maintenance client, and demands excess time from key resources, executives etc. then often that is an account that is just not worth servicing.

Every business has fixed and variable costs. Often sales people just look at the variable costs and forget they need to get paid, they have office space, they have computers, accounting, marketing etc. etc. and that all needs to be paid for. If the dollars don’t cover it then don’t do it!

This is a lesson every sales person needs to understand … not all business is good business!


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4 thoughts on “Not All Business is Good Business!

  1. I think that with experience most situations are pretty clear almost immediately. Basic math determines whether there is a sufficient return on a deal to make it worth while doing. The complications come when you, or the client, start to talk yourself into the deal.

    Comments such as “If you do this for me, then I’ll do that for you”. Are good indicators that this deal is not good business as a stand alone deal … so, how you factor in the “potential” of the future is where they get complicated.

    At the end of the day it all comes back to math … every company needs to cover all of its costs and have a bit left over … if that doesn’t happen then walk.

    Not sure if that answers your question, the short answer is … usually very fast!

  2. I think that with experience most situations are pretty clear almost immediately. Basic math determines whether there is a sufficient return on a deal to make it worth while doing. The complications come when you, or the client, start to talk yourself into the deal.

    Comments such as “If you do this for me, then I’ll do that for you”. Are good indicators that this deal is not good business as a stand alone deal … so, how you factor in the “potential” of the future is where they get complicated.

    At the end of the day it all comes back to math … every company needs to cover all of its costs and have a bit left over … if that doesn’t happen then walk.

    Not sure if that answers your question, the short answer is … usually very fast!

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