It’s January 2012 and bookkeeping is my life. I don’t understand how a small company such as ours has so much bookkeeping, but I guess that’s another conversation for another time.
The calendar year is our fiscal year so I am closing out the 2011 books and getting ready for my accountant, as well as finalizing our 2012 budgets and projections. This has me looking closely at our numbers. There’s 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 creep into your nightly dreams.
Besides damage to the ego, the worst part about losing a large account is the dent it makes in the cash flow. All of a sudden the numbers in the checking account look like my old college checking account rather than a business bank account.
You can’t have been in business long if you’ve 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.
I spent a solid month 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, 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 the biggest account can be the least profitable account. Higher volume, higher demands for our time and lower rates were actually eating into not only our profitability, but also limiting our ability to grow. We ended the year only a few percent off from last year’s sales volume but experienced double-digit growth in our profitability. Net-net it was a win, except for the month of panic that probably took 10 years off my life.
I learned this lesson once before, a long time ago when I first started out. I had 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 fired the person we were dealing with that was making us crazy and offered us a lot more money to stay. And we did for several years more.
The takeaway: 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 open. Go for the open door!
Mardy Sitzer is a certified inbound marketing professional and president of Bumblebee Design & Marketing. Since 1993, Mardy has been delivering creative and innovative marketing solutions. An avid reader of all things internet and marketing, she also writes blogs, articles, and web content for industry magazines as well as for Bumblebee’s clients. She is an adjunct professor at Fordham University and instructor at Rutgers University teaching social media for business. Follow her on Twitter or email her at email@example.com.