Small Loss for a Potentially Huge Gain: NonProfit

By: Scott Harris
Posted: 07/10/2012

I just got back from breakfast with a friend who serves as a volunteer board member for a non-profit trade association.

The association is struggling to find (or regain) its place in our new economy.

To move forward requires systemic change and many, if not most, of the board and executive team recognize that. A plan has been developed that will transform the organization and give it an excellent shot at future success.

Part of that plan requires recognition that the changes, when implemented, will result in the loss of a handful of current members.

Everyone agrees that the anticipated losses would come from the weaker members and the changes will both solidify their standing with existing members and bring in new members.

And yet, they are unwilling to pull the trigger and implement the plan. There are some on the team who just can't get their heads wrapped around taking a small loss for a potentially huge gain.

I point this out because it comes up time and time again with clients and peers of mine.

A client of mine runs a service business and did a study that showed for their customer to be profitable, they need to be generating $1,800 a month in revenue. Anything less than that is a financial loss.

But the client is unwilling to resign clients that don't meet the threshold and still wants to take on new clients (even those with no potential for growth) that are smaller than the minimum established for profitability.

In a nation of more than 300 million people, there will always be a handful who are technology adverse, quirky or just stubborn holdouts, married to days long past or days yet to have arrived.

The bottom line is that sometimes, to improve the bottom line, you have to let things go.

For those of who make business decisions, we have to decide which prospects are worth pursuing and which ones we have to let go.

The same with your current customers and clients.

As the owner of a marketing company, I'd be a fool to not recognize where the market has moved and to react to that on behalf of my clients.

For each of us, we have limited resources of both time and money and each need to be invested as wisely as possible.

For almost all of us, our industries are changing rapidly and constantly. We need to change and adjust right along with them if we want to continue to succeed. And sometimes that first step forward means letting go of the past.

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