I remember the first time it happened – we turned a customer down. And this one even had money, ready to pay us. We referred them to someone else. It wasn’t because we had all the money we needed, that’s for sure. At the point they came to us, we were maxed out on our capacity. True, we could have tapped contractors to help with the project, but our workload wasn’t the only issue. The project they proposed for us was neither within our core competency nor was it something we aspired to be. It just didn’t make sense. A few of my employees thought I was smoking something to leave money on the table, but my vision was longer term than just fast dollars (which may have made me a bad or foolish entrepreneur, but I stand by my decision!).

Saying no to a customer is good when:

1. The work is not strategic nor within your capabilities. If you have been in business for a few years and you’ve never said no to a potential customer, you need to look at your strategy. Do you even have one? And if you do, are you weighing customer opportunities against them? Many entrepreneurs are in such a fury to get customers that they don’t realize that not all customers are created equal.
2. The cost of serving the customer outweighs the price. Sometimes, customers can cost you money even when the projects or products appear profitable. Are they difficult to deal with? Do they cause turn-over within your company (which costs money and morale, especially in a small business)? Are you spending a lot more resources on them than you’re charging for? Unless you are keeping good records, you may never know who the most profitable (and unprofitable) customers are. How, then, do you know where to prune?
3. You just don’t have the resources. If taking on a new customer would cause a decline in the quality of your product or service, think again. As a small business, we often only have our reputations to go and and can’t risk that. Rather than an outright no, try giving them a date by which you can deliver and let the negotiations go from there.
4. They are asking for something for free without giving you anything. Even if it is a good reference or a referral, if you give too much away, you risk decreasing the value you or your products hold in your customers’ eyes. Sometimes as entrepreneurs have to give or discount in the beginning, but make sure you are getting in return.

Many women entrepreneurs especially seem to have a hard time saying no. But just like pruning a tree prompts better growth when done correctly, so trimming the customers your company services can also result in revenue growth.

My grandfather recently came to visit me from Texas and while he was here, I overheard him arguing with various customer service representatives at Sprint about his account. He had been a Sprint customer for over 10 years and recently canceled service for three phones all due to several run-ins with poor customer service.

He had been battling with them over a phone that had been dropped in a toilet and they refused to take it off the bill. For ten months he had been fighting with them and became so frustrated that he severed a decade-old relationship. He was satisfied with the product but yet driven to the competition. How do you keep your customers from doing the same? What are the keys for keeping customers happy?

In talking with a former client, he reminded me of a few of the things that we did that kept them faithfully coming back for more:

1. We established a relationship and kept track of each transaction. We assigned a team to each customer who provided a consistent face. Every issue was recorded so that regardless of whom they talked to, the resolution continued to move forward.  Our folks were personally interested in our customers and provided top-notch service to them, for which they were also monetarily rewarded.
2. We were willing to forgo short-term gain for the long-term relationship. Our team kept our client’s best interests in mind and more than once talked them out of a project that did not make good long-term sense for them. As a result, we sometimes lost short-term dollars but it was worth it in order to maintain our integrity in the longer term relationship.
3. We took ownership of their problems without regard for source. Because our software was one of many that kept their manufacturing plants running, pinpointing the exact cause of a problem in the system was complex and took time. When the issue was critical, we didn’t worry about whether or not the breakdown was in our system or someone else’s, we focused on getting them operational again. Servicing the customer came first - determining the source of the problem came later.

Some would argue that dealing at a b2b level as we did can not be compared to the massive scale required with consumers. This does not mean it can’t be done. While it is difficult to develop customer intimacy when dealing with the masses, Sprint did a poor job of recording the progress of my grandfather’s case and circumstances, causing him to repeat the same story every time he spoke to someone new (which was each time he called or got disconnected). Keeping a record of conversations, at a minimum, would have alleviated a tremendous amount of frustration. They also could have waved or reduced the penalty fees to save the relationship, especially since they were to blame for the deterioration of the situation. Had someone taken ownership of the problem, removed the bogus charges, as well as the cancellation fees (x3!), the customer would have been salvaged. Although losing one customer, even with three phones, isn’t going to break the bank, you can be sure that my grandfather will let others know about how he was treated and work to persuade them to choose an alternative whenever possible. There is nothing more dangerous than a customer scorned.

So women aren’t asking for outside investments as often as men – what does that really tell us? Women are shy? I don’t think so. Perhaps we need to look at why women are starting businesses and the types of businesses they are starting.

The explosive growth of women starting their own businesses reflects a need by women to take control of their future. For many, it is also to find flexibility so that they can attend to their many competing responsibilities and interests. While kids are the largest such demand it is not just parenting but ailing parents and philanthropic interests that women try to juggle. Taking outside capital from a VC or an angel diminishes the control the entrepreneur has on where the business goes. They can’t just grow it at a slow rate to suit their lifestyle with outside investors to contend with.

Additionally, not all businesses are suited for outside investment. Service businesses, for example, make investors yawn. Most won’t even consider it. What type of businesses are most women starting? Services. One of the hottest new businesses is to become a Virtual Assistant, which is exactly what it sounds like.

High-tech (biotech and IT) businesses are most likely to require (and receive) outside funding. Currently, there is a dearth of women in technology-based companies, both as workers and as entrepreneurs. Maybe the better question is: why are women shying away from these fields?

Organizations such as CWIT and NCWIT are working to address this issue. Citing one of the problems as being a lack of role models, NCWIT has created a series of web-based podcasts which feature interviews with prominent and successful women entrepreneurs who started technology companies.

A recent survey in the UK found that kids, ages 13-17, are already thinking about work/life balance. 81% of the kids surveyed are, at least. And 11% stated that they’ll look for jobs elsewhere if their boss asks them to put work before family. Perhaps the other 89% will just start their own company?

Speaking of kids starting businesses, an 18-year-old entrepreneur just posted a review of The ParentPreneur Edge on the book’s Amazon.com page. Talk about unexpected! He says he was 16 when he started his first retail business and was able to relate to the metaphors in the book through his own childhood. In addition, he found so much value in the business tips he is already re-reading it. Cool. THAT is why I wrote the book – to provide value.

Since we’re on the subject of entrepreneurial kids and providing value, I have to mention a fabulous organization called the National Foundation for Teaching Entrepreneurship (NFTE, prounounced nifty). Julie Kantor runs the DC chapter and recently authored a great book on empowering kids into business called I Said Yes. The great thing about this program is that it is bringing schools and businesses together to provide opportunities for kids from low-income neighborhoods to learn how to start their own business. The success stories are impressive…check them out.

An article published in The New York Times Last week about Family-Leave Values reassured me that my choice to become an entrepreneur was the right one. It detailed some very depressing cases where people have been let go from their jobs because they were parents. What has this world come to when people are penalized for doing what comes, uh, naturally? Apparently even those who don’t have kids are not safe, either. People have been fired for taking off work to care for a sick spouse or an ailing parent. Some businesses are starting to get it, but it may just be up to us small businesses and entrepreneurs to show them how we bring in profits while caring for our employees.

When I started my first company 12 years ago, my goal was to prove that you could build a (highly) profitable company and honor people’s needs for work/life balance, including my own. We were successful and won several state and national awards for our creative attention to our employee’s needs. I have to admit, though, that it wasn’t always easy. There were several lessons we learned along the way that other companies, even the very small ones, can learn from:

1. Work/life considerations must come from the top. Building a company that respects the fact that there is more to life than work requires top-level commitment. It has to trickle down through all ranks of managers from the highest to the lowest.
2. Measurements must reflect the company’s commitment to results, not “face time.” Where possible, we had to make sure we valued results, not time in the office. This was especially important for remote workers.
3. Managers must be trained to manage flexible work schedules. Not everyone knows instinctively how to manage for results or measure productivity instead of accounting for hours. We found that we had to train our manager in how to manager people remotely and how to develop work plans and goals that reflected what we really wanted in our business – a contribution to our bottom line – rather than just showing up.
4. You must be able to say ‘no.’ In our business, not every position was conducive to a flexible work schedule. Some jobs really did have to be present in the office and we had to be prepared to make that call. It can not be flexibility at all costs.
5. Policies must be formalized and administrated fairly. Finally, because we sometimes said no, we had to have our policies documented and monitor the implementation for fairness. Any flexible work schedule request that came in had to be reviewed by the employee’s manager’s manager to make sure we were staying consistent and fair.

The benefits of looking after our employees can be monetized by low turnover rate. The cost to hire and train new people is high and it is more economical to keep good people, not to mention the negative impact high turnover can have on morale. By building certain philosophies into the very culture of our companies, we can set a new standard for running profitable businesses that recognize employees as people with lives outside of work.