If you are in the early stages of your part-time CFO practice, you will be faced with the opportunity of serving a potential competitor of an existing client. Do you take the job or decline the work?
I have always had an unwritten guiding principle of never serving a competitor. But there are exceptions, probably.
How about you, how do you handle these situations?
Almost, But Not Quite a Competitor of a Client
Another CFO whom I highly respect and whose integrity is above reproach recently asked me about taking on a client whose customer base has the slightest of overlap with an existing client.
He wanted to know if he should reject the client since that business could be construed as a competitor. Here’s what I shared with him:
- Approach the existing client, and tell him about the situation. Let him know your core values of not serving competitors. But provide all the relevant facts about the other prospect.
- Then let your client make the decision. That does three things: 1) this approach gives you peace of mind, 2) it provides your client another reason to admire you because of your integrity, and 3) even provides the prospect with a glimpse of your values too. Something tells me he might be okay with it. Plus, there might be some joint-venturing possibilities between both businesses.
- I’d let the prospect know ahead of time that you are having the conversation mentioned above.
Our Clients Are Family
As I mentioned at the outset, there are exceptions to our unwritten rule of not working for competitors of our clients. Let’s say you are a VAR for an ERP solution. Working for similar businesses in this context makes you a better consultant.
Or perhaps you sell a productized consulting service that your prospects know ahead of time where your product is available to everyone in your community. In this case, your clients already know you might be serving competitors.
But when I’m stepping into the part-time role as CFO or COO, then I’m dedicated to that client only, not their competitors. If not, that would be like working for Pepsi and Coca-Cola at the same time. I’m not doing that. Besides, my clients are like family.
Photo Attribution: Mike Wilson