We lost a customer that kept the team busy. How do we decide whether to cut costs or wait for new work?

Question

Tyler Smith · Accepted Answer

Make the decision from cash capacity and credible demand, not from how busy the team used to be. Keeping capacity can be sensible, but only when you can fund it and explain what evidence supports the wait.

Calculate the account's lost contribution after costs that genuinely disappear. Then identify the costs that remain, including commitments that cannot be canceled immediately. This prevents a common mistake: treating the entire revenue loss as either profit lost or cost savings available.

Create separate views of confirmed business, qualified opportunities, and speculative replacement work. Do not let the most optimistic sales forecast determine what the company can afford.

Set explicit decision triggers:
- What cash position requires further action?
- Which customer commitments must arrive to justify retaining unused capacity?
- When must those commitments become real?
- Which spending decisions are reversible, and which create lasting damage?

Choose low-regret actions first where possible, such as pausing discretionary purchases or avoiding new commitments. But do not let reversible measures become an excuse to postpone a necessary structural reduction.

Use EOS to make the trade-off visible. Put the unresolved decision on the Issues List, assign ownership, and review the relevant cash and demand measures consistently.

A contingency plan should specify what happens if replacement work does not arrive. Waiting is a decision with a cost, not a neutral position.