Last week we lost a website development job less than an hour before the kickoff meeting with what would have been our latest new client.
I hate losing jobs or projects. As the company owner, one of my most important responsibilities is to bring in new business. This has to happen regularly, consistently, reliably. As we’ve grown since incorporating in 2002, our monthly financial responsibilities have grown substantially. I need to bring in enough business every month so that our cash in at least equals the cash out (at least as an average over time).
Losing a project hurts. The circumstances around this one were interesting. The job was a medium-sized project, the client was a large state organization. We’d been in discussion for a couple of weeks and everything was falling into place. We’d met in person and had a very good meeting, we’d established an excellent rapport with our wonderful contacts at the client organization. The work was the kind of work we do day-in and day-out in the website development world. Our proposed scope of work and budget were accepted verbally.
Now, we’ve done work with other divisions of this organization before and learned that for a variety of reasons it’s very difficult (in fact nearly impossible) to get signed contracts. So I had chosen to proceed with this project based on a verbal agreement and forego the signed contract we normally require. I can imagine what you may be thinking: “what a dumb-a**, he didn’t have a written contract?” Correct. We didn’t have a written contract, and I’d do again the same way tomorrow with this client. Based on past experience it’s always worked out fine with this organization, and my gut instinct was that the people I was working with in this division had integrity. As I mentioned, the rapport we had established up to this point was excellent.
The kickoff meeting was scheduled. Less than one hour before that meeting, our contact called us and said they had just come out of a meeting with another division at the organization, one that does website design and development, and totally out of the blue they offered to do the work we were going to do. For free.
It’s hard to compete against free.
Our contact was caught in a tough situation. I could tell they genuinely felt conflicted. They felt they did have a verbal agreement to send the work to us, but they also knew the higher-level managers in their division would want the lower cost (i.e. free) solution. I could understand their position and shared as much with them.
To me, it’s usually the better choice to maintain good relationships in these types of situations than to get all huffy about a verbal contract. The fact is in any business that somedays you win the job and some days you lose the job. I’ve been in the web design and development business long enough to know that a project isn’t real until you have the initial check in hand and a signed contract. We had neither and that’s part of the risk.
I asked if they would be willing to pay for the time we had spent so far preparing for the project – the client had sent all deliverables due to us the week before and we’d spent the required time reviewing all their materials and mapping out our plan for implementation. Thankfully, they were willing to cover the time we had spent so far. I felt grateful for that. One small success there.
In the end, I feel very good about how I handled myself and the relationship between my company and our possible client. Who knows, the other division implementing their website may run into trouble and want our help. There could be future projects from this division that could come our way. And there very likely could be other work from the organization as a whole and in my playbook keeping all the relationships positive only has upsides. I’ve also learned over the years of running several businesses that it’s almost never a good idea to burn a bridge. In Fort Collins our population is so very interconnected. I see this as a successful opportunity to have strengthened my own network, as well as (to a smaller extent) the reputation of all web designers and developers in Fort Collins. The web development community in Fort Collins is even more connected and we’d be doing our colleagues a disservice if we had acted with anything less than grace in this situation.
Like it or not, losing jobs is a part of business. A successful business doesn’t win them all. (If you do, then you’re most likely lowering your price too far on some jobs which is a good way to go out of business down the road. For more on this and other highly useful business tip I recommend “The Knack: How Street-Smart Entrepreneurs Learn to Handle Whatever Comes Up” By Norm Brodsky and Bo Burlingham.)
About 20 years ago an elderly and very wise friend gave me a huge gift. I was standing next to him with a group of people and he leaned toward me and said, “Ron, I’ve figured out the secret to life.” Ok, that got my attention. “Do you want to know what it is?” he asked. I of course said I did. He said to me “The secret to life is to give thanks for all things.” So simple, and in my experience so true. I’ve done my best to see my world through that lens all these years and it has made a huge difference. This particular situation was a challenging one to give thanks for as it was unfolding, but I came around to it. I for one believe my wise friend, now deceased, was right.
I’m curious how you’ve handled business disappointments in your life? Why don’t you share your story or thoughts in a comment below: