Not all business is good business

Best practices
written by
Tom Rains
Jun 27, 2022
minutes read

Not all business is equal. In fact, winning the “wrong” project can actively harm your company. It stands to reason, then, that you want to be looking to cultivate the “right” kind of business to get after.

In simple terms, the right projects are ones that... 

  • You can deliver good work on
  • Are within the right sector(s)
  • You can deliver at a profit
  • Are for a client you can expand

Let’s run through it.

The right projects... you can deliver good work on

Ideally, you want to avoid being in the position where you’re taking on any piece of work you can get your hands on just to keep the lights on.

The promise of incoming cashflow can be appealing, but if it’s a project you’re not suited to—e.g. it’s a new type of service, it’s in a new sector, etc.—you’ll find it often creates more problems than it solves.

In principle, it’s prudent to push your boundaries and expand your offering. But if you dive headfirst into a new area chasing cash—rather than as part of an orchestrated, strategic move—it’s unlikely the reward will materialize. At least not as quickly or smoothly as you’d hope.

Indeed, often a lack of expertise in a new sector or discipline translates into poorer quality and more difficult work that quickly starts to erode profits.

If you pursue projects for the wrong reasons, at best you may walk away with a bloody nose or a dent in your reputation. At worst, clients could withhold payment, request refunds, and seriously jeopardize the cashflow you were hoping to bolster.

Good projects are those where you know you’ll end up with a happy client.

Be that because your cultures align and there’s a healthy client-vendor relationship, it’s a sector that you have a strong pedigree in and make handsome profits, or it’s a service you’re strong in and you’re well-equipped to deal with any obstacles that might occur.

By delivering work that leaves both you and the client happy, you’ll be able to leverage their feedback to help win more of those sorts of projects in the future—something called “social proof”, which we’ll go deeper on in an upcoming chapter.

The right projects… within the right sector

Taking on projects within the sectors you’re competent in puts you on the front foot to deliver good work and reduces the risk of loading stress onto your delivery teams.

However, just because you know you’re capable of delivering great quality work to a particular sector doesn’t mean it’s worth doing so.

If you analyze the profitability of your projects by sector, I’d be surprised if you found there’s no difference in the margins you achieve.

In fact, many companies discover that sectors they’ve serviced for years have been doing nothing than drain their bottom line.

So there are 2 core pieces of advice here:

  1. Make sure that the sectors you currently serve are profitable
  2. Make sure that the new sectors you’re looking to serve—which carry an inherent level of risk—are quoted accurately and at a price that makes it worth your while

Which leads us neatly to the next point…

The right projects… that you can deliver at a profit

This, really, is your primary concern. After all, if a project’s going to cost you money, do you really want it?

While there are many things you can do at the quoting stage to ensure projects stand a chance of being profitable, such as having a well-defined scope, including contingencies, and so on—very often there are certain cohorts of projects that almost always perform badly.

So, how do we become aware of this? … And how do we avoid it?

The best way to do this is to review the performance of similar projects you’ve already completed. Did they make a profit? If not, are there things you can change? e.g. Can you simply quote more? If that’ll make you too uncompetitive, can you instead limit the scope? Etc., etc.

In a nutshell, if you get into the habit of reviewing projects, you’ll identify the ones that regularly cause projects, and you’ll be able to either (a) fix them, so they stop being a problem or (b) avoid them.

Project reviews are something we’ll talk about in greater detail in an upcoming chapter. But rest assured, they’re key to helping you avoid the wrong business and focusing your efforts on profitable work that drives the company forward.

The right projects… for a client you can expand

This links back to what we were saying earlier about ensuring you win projects you can deliver good work on. Happy clients buy more of your services.

We're not just talking about repeat work. You should also be on the lookout for additional services you can sell during a current project—be that extending the project or identifying relevant cross-sell opportunities.

Expanding the scope is a great way to increase your profits on individual projects. Many companies find scope creep a headache, but so long as you ensure the proper scoping and contingencies are present in your original quote, you should be able to encourage it and welcome it with open arms.


There are certain projects that tend to provide greater opportunities for profit than others. You should be on the lookout for projects:

  • You can deliver good work on
  • Are within the right sector(s)
  • You can deliver at a profit
  • Are for a client you can expand

When you’re under pressure to close business, endeavor to prioritize your energy on projects that meet as many of the four criteria as possible.

You won't to avoid being in a situation where you struggle to complete a project due to lack of expertise; you sleepwalk into a sector you have no experience in and aren’t prepared for; you don’t end up delivering at a loss because it swallowed extra time or—worse still—you end up hiring extra people to complete work you’re not making any money on in the first place; you spend an inordinate amount of effort courting one-off customers you can’t expand.

While we appreciate that cashflow is the primary concern for many businesses, but believe us—and we learned this the hard way!—if you want a sustainable business with manageable growth, you should focus your efforts on winning good, worthwhile business.

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