Do You Take The Business?

Most people - especially those in a consulting role - will agree that not all business is good business. The challenge, though, is being able to accurately gauge what’s good business and what’s not. Then it’s about taking on the new work… or passing. And while no two situations are the same, below are a few criteria that can help us determine whether or not a piece of business is worth it…

  • One of our biggest determining factors? Risk/Reward. Are we exposing ourselves to increased risk (i.e., losses, impracticality of scope, instability, reputation impact, etc.) by taking on a deal? On the flip side, what are the expected/potential rewards in a deal whether it appears risky or not? Could a so-so deal lead to new work with other companies? Might a deal that sounds great actually be logistically challenging? Could a low paying deal have a higher long tail value? Ultimately, determining the risk/reward balance of a piece of new business is the determining factor. (Guess that’s why it came first.) 
  • Next we look at historical experience. Have we done something like this before? Were we successful? Do we know what to avoid? Hindsight is 20-20, especially once you’ve found your niche channel. So use it.
  • Another important evaluator: capacity. We all tend to have the “get more” mentality when it comes to work. While that’s all well and good, that appetite has to be matched with a capacity. If you and your team are at 100 percent, then taking a new piece of business requires a reactive action (i.e., hire, contract out, shed existing business, etc.). Does the piece of business (and it’s risk/reward analysis) warrant more team? Short- or long-term? Do you have prospective candidates in mind? Would these be temp hires? Are existing contracts coming to a close, allowing for open capacity amongst current team members? Capacity is a huge piece of the puzzle because, if you think about it, an overworked team leads to lesser quality output. And the domino effect from there is not so awesome.
  • In a more qualitative way, look at passion. Sure, you sometimes have to take work because you need the actual work, but if you’re not interested in it or passionate about it, what you turn back isn’t going to be top quality. It just isn’t. It’s certainly not a B-school principle, but if a piece of new business isn’t going to be, for the most part, enjoyable, you need to really think about it. If you know you’re going to dread dedicating time to it, it’s probably not the right fit. If your team indirectly communicates that this project is awful, the work will suffer. So whenever possible, win business that’s fun. Easier said than done, we know… but when at all possible…
  • Lastly, and perhaps most importantly is the bottom line. (Yes, we said risk/reward was the most important, but you know what? They’re all important.) The bottom line comes down to planning and forecasting. (Little nod to the guys at Profitably, a great tool for small business planning and analysis. Also a client. Transparency, FTW!) If you’re maintaining real-time financial planning and analysis and you’re staying on track, it makes it that much easier to say yes or no to a piece of new business. If it’s a project that you’re not super-keen on and your bottom line is on track, then you pass. If things are falling short, maybe you take that work. 

So. Do you take the business?