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Saying "Yes" to the Mess

Business Owners, Ignore This Law at Your Peril

Have you ever heard of Baker’s Law? If you haven’t, here it is. It’s so simple, but business owners grapple with it all day, every day:

Bad customers drive out good customers.

That’s it. Easy, right? No, not so much.

Ron Baker is one of the most gifted strategic thinkers I’ve ever had the pleasure of meeting, and he has written THE most authoritative book on value pricing. I have referred to his articles and his books on many occasions in my CPA practice. I heard Baker’s Law for the first time in 2012 and I think about it every time we begin thinking of working with a new customer.

Anytime you say “yes” to work with a new customer, you are saying “no” to something else. So, it’s an absolute fact that you should WANT to work with the customer you are saying “yes” to so much so that you don’t mind forgoing the opportunity to do something else.

So, why do we find ourselves working with customers that are not utter and complete joys to work with? There are two reasons: Because we stink at saying “no,” and because providing solutions to people who need them is why we exist. Those are dangerous traits when you run a knowledge business.

How could you apply Baker’s Law to your business?

  • Learn to Like Silence: Knowledge workers and solution providers hate silence. Why have silence when you could be filling the void with solutions, right? Here’s an idea. Lean into the silence. You don’t have to provide a solution to every problem spoken aloud. Don’t commit too soon to providing assistance.
  • Learn to Ask Better Questions: Knowledge workers love to answer questions. We need to learn how to ask better questions, if for no other reason than to keep us from answering another one. The trick here is to listen; learn to listen not only to solve and answer, but listen so you can ask better questions. The more you know, the better equipped you are to make a good decision on working with this potential customer.
  • Learn How to Say No to the Wrong Fit: You wouldn’t go out and try on a pair of jeans that were too small for you, then buy them because you didn’t want to say no to the salesperson, right? If there is even a hint of bad fit, you must give yourself permission to say “no” and be OK with it. It’s so much harder to fire a bad customer than to never work with them in the first place, trust me. You probably already know this, but it bears repeating.

We’ve discussed how difficult this is with our clients, often in the early stages of business ownership. New business owners are especially prone to accepting ill-fitting customers in the beginning because revenue is paramount in the early years of any business. But if you’d like to hear more about our experiences with applying Baker’s Law, or want to share your own, let us know, or comment to this post. We’d love to hear your cautionary tales!

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