Not Every Contract Is Worth Keeping

Most owners I know treat every contract as a win and every loss as a failure. Growth feels like the only direction. So the contract that has been quietly losing you money for two years stays on the books, because handing it back feels like going backwards.

I think that is one of the most expensive habits in this industry. Not every contract is worth keeping, and it is better to find out which ones early than to keep paying for them.

How a bad contract hides

A contract rarely looks bad on the invoice. The client pays, the hours are covered, nobody has shouted. The cost sits somewhere else.

It sits in the manager who spends half a day a week on one site's problems. It sits in the overtime you pay because the site has never had enough regular staff willing to work it. It sits in the officers who ask not to be sent there, and the ones who leave because they were. It sits in the rota, where that one site is behind most of the late changes and the last-minute calls.

None of that shows up as a line called "this contract is losing money". You only see it if you go looking.

Three questions I would ask of every site

What does it really cost to cover? Not the hourly rate you agreed. The rate plus the cover you pay for, the travel, the management time, the kit, the training the client asked for and didn't pay for. If you cannot answer this for a site, you are guessing, and guessing is how a contract ends up underwater for a year before anyone notices.

Who wants to work it? If you struggle to keep regular officers on a site, that is information. Sometimes it is the pay. Sometimes it is how the client treats your staff. Either way, a site nobody wants is a site that will cost you in cover and in turnover.

Would you tender for it today, at today's price? If a new enquiry came in with these exact terms, would you quote? If the honest answer is no, then you are carrying it out of habit, not because it makes sense.

Why owners hold on

I understand the reasons, because I'd feel them too.

The revenue looks good in the headline figure. Losing a contract means telling your staff there is less work. The client might be a reference you use in tenders. And there is a quiet fear that if you start handing contracts back, you won't replace them.

Those are real. But a contract that costs you more than it pays is not revenue, it is a subsidy. You are paying to keep a client you would not choose today, and that money and management attention could go on sites that are worth having.

Fix it before you walk away

Handing a contract back should not be the first move. Often the better first move is a conversation.

If the problem is price, the client may not know the rate no longer covers the real cost of the site. That is easy to put off, and rarely put in front of a client with numbers behind it. If the problem is the site itself, a proper look at the post orders, the hours and the staffing mix sometimes shows that you are covering hours the site doesn't need, or missing ones it does.

If the client will move on price or scope, you may have just turned a bad contract into a good one. If they won't, you have your answer, and you have it from them, not from a hunch.

If you do hand one back

Do it properly. Give the notice the contract asks for, and a bit more if you can. Tell the client plainly and early, not in a short email the week before. Make sure the officers on that site know before they hear it elsewhere, and where you can, find them work with you.

Leave the site in a state you would be happy for the next provider to see. The industry is smaller than it looks, and clients talk to each other. How you leave is remembered longer than how you arrived.

What this has to do with growth

If you want to grow, growth should come from contracts you want, which means knowing where your money and your management time really go. I have written before about what it costs to win work in the first place (see what a security company should spend on marketing). The same discipline applies in the other direction: be as deliberate about what you keep as about what you win.

None of this works without proper records. You need the hours worked on each site, who covered what, and who was scheduled against who actually turned up, all in one place, not scattered across spreadsheets and message threads. That is the unglamorous part of running a security company, and it is what turns "I think this site is a problem" into "I can show you".

If you would like to see how TacDesk keeps those records in one place for your own sites, book a demo and I will show you.

Michael