When your business is young, you naturally welcome every new customer with open arms in an effort to generate cash flow and get on your feet.

Too many business owners have trouble breaking that pattern, however, even after their business is more established, with the “say yes to everything” mentality trickling down to the front-line sales team.

This can ultimately be a death sentence to a business.

What if you could tell a prospective customer “no” and actually earn more than if you’d agreed to the partnership? If you’re a service provider, then that is likely the case more often than you realize.

Customers who aren’t a good fit can be a drain on your team, your reputation and ultimately your profitability. And in the end, the partnership is likely not in their best interest either.

You must proactively seek out ideal customers instead of merely reacting exclusively to inbound prospects to be able to say no with confidence. A good balance of inbound and outbound prospecting activity is essential.

Empowering your team to more carefully scrutinize new customers starts with setting criteria for what a great customer looks like. They’ll vary by business, but they might include some of the following:

l Cultural fit

l Whether you can make a real difference for this customer

l Whether the work you’ll do for this prospective customer leverages your organization’s greatest talents

l Whether you’ll be paid fairly for your team’s efforts.

Next up, determine what qualifying questions you’ll consistently ask prospects to determine if they’re a good fit for your firm and provide those to your entire sales team. If a sales rep is on the fence about a prospective customer after an initial qualifying interview, encourage him to debrief the opportunity with colleagues for their gut reaction.

On the occasion where you need to decline work from a prospective customer, doing so with the utmost of grace will garner you respect in the marketplace. By all means, never burn a bridge. Help your prospect see why an alternative provider would be a better fit for their current needs. Offer specific companies that you’d recommend they contact. Consider going above and beyond by making an initial introduction to one of these providers.

Saying no doesn’t have to mean an end to the relationship. If you handle it with kindness and assist them in finding a more suitable partner, you just might garner referrals and positive word of mouth.

And who knows, there may come a time down the road when that same prospect is a good fit for your company after all.

Lori Turner-Wilson, CEO and founder of RedRover Sales & Marketing Strategy, can be reached at redrovercompany.com.