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Adios Muchacho
January 16th, 2012 by Mardy Sitzer
January 2012 and bookkeeping is my life. Closing out the 2011 books and getting ready for my accountant as well as finalizing our 2012 budgets and projections has me looking closely at our numbers. Much to tell but for the moment I’d like to focus on what losing an account, a really large account, did to us in 2011.
There is no other way to say this; losing a really big account is just out and out painful. When you lose a really large account while the economy is tanking, thoughts of going out of business can come to mind.
The worst part about losing a large account is the dent in the cash flow. All of a sudden the numbers in the checking account look like tumbleweed in an abandoned town.
You can’t have been in business long if you have never lost an account. It is bound to happen. An account can be lost to a competitor, because you are no longer needed, or you messed up. Take your pick.
Last year we lost not only our biggest account but also an account that had been with us for nearly 18 years. We were told that they brought the work in-house and so our services were no longer needed. I can live with that, I don’t feel as bad as if we had majorly dropped the ball but a loss is a loss.
This departed account impacted our cash flow. The impact was financially about as hard as you can imagine. Our financial foundation was attacked and we had to scramble. So…..
I spent a solid month this past summer cutting expenses, carving out anything that needed cash. I put in more hours, thinking that wasn’t even possible, and tried to keep the panic on the down low. Business being what it is, I felt that letting panic set into our operation would undermine the confidence that our current clients and prospects had in us.
Now for the good news. I learned that often times the biggest account is the least profitable. Higher volume, higher demands for our time and lower rates were actually eating into our profitability and into our ability to grow.
As it turns out, we ended the year only a few percent off from last year’s sales volume but double-digit growth on our profitability. Net-net it was a win, except for the month of panic that probably took 10 years off my life. I can’t even take credit for a brilliant strategic move but maybe my hard learned lesson will get you to look at your accounts and make some choices.
I actually learned this lesson once before, a long time ago when I first started out. A large account with a truly insane client. I used to wake up each morning in fear that she would call. Finally when I couldn’t take it anymore, I fired them. They were shocked. Okay, maybe I didn’t handle it well – I had only been in business for a year or so. They actually offered to fire the person we were dealing with that was making us crazy and offered us a lot more money to stay.
The take away: don’t give up – ever! If you believe in what you are doing then you can see every challenge as an opportunity to improve and grow. After all, when one door closes you can choose to be trapped or find another door that is opened. Go for the opened door!
Yes sometimes when you feel like this is the last straw it can turn out to be a blessing in disguise. The disguise being more time to serve your more profitbale clientele, less headaches and a better bottom line.
And life just has a way of keep on coming at you. Roll with the punches and focus on what you do best. It got you there in the first place and it will get you there again; perhaps with a few new tweaks.
You are so right Jeff (and great to see your name pop up here – how have you been???) It is so true that even when you think things are bleak there is always a rainbow after every storm – trick is to find the pot of gold it is pointing to.
Hope all is well with you and look forward to catching up one of these days!