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Monthly Business e-Tips Vol 1
Issue 5

Opportunity is Knocking - What's the Price?

Most opportunities that come before us carry a cost. Many times the benefits of the offer outweigh the investment. The cost may be an associated financial fee or an expenditure of valuable time and energy. If your business is to be profitable and your role in it balanced, you need to think about the price you'll pay for each opportunity that comes your way.

Recently I met with a colleague for coffee. His company finds office space for small businesses. That morning he told me about a client he has been working with for 2 1/2 years. Originally he started working with them for a major move but after looking at many properties, they changed their minds. Recently they started to look again. He spent about a third of our meeting talking about this very frustrating company. Usually a very mild-mannered person, he was quite agitated during our conversation.

Although he has built good relationships within this organization, as a whole working with this company is problematical. They were disloyal, unreasonable and outright difficult. My colleague was investing a lot of time and energy on something that will probably never materialize. Even if he does make the sale, what is the cost of this opportunity? The amount of time and energy expended would most likely not be made up. How could he have otherwise utilized his time? How many other prospects could he have uncovered and closed if he spent his time on business development activities?

Most of us don't want to pass up potential business. However, there are some customers or clients who are just not worth the trouble.

There are many other types of opportunities that may have a steep admission price. For example, here are other forms of opportunities:

  • Building partnerships with other businesses.
  • Exhibiting in a trade show, sponsoring a professional organization or advertising in a special addition of a journal.
  • Attending networking events.
  • Getting involved or holding office in an associations.
  • Making unqualified sales calls and writing proposals too soon.
  • Working with clients or customers who don't fit into your usual model.

Though I am not aware of any easy formula for determining how worthwhile any of the above relationships or activities will be, there are questions to ask yourself. By answering these questions, you can determine if there is a return on investment for your time and money.

Ways to evaluate the cost of opportunity:

  • Are potential partners or associates in sync with your mission and values? Strong differences in these areas indicate future problems and imply mismatched expectations. Will the parties involved share in the responsibility for the relationship? When they are aligned in purpose and responsibility, alliances can be effective. When these elements are not in place, the drain is substantial and rate of failure high.
  • Trade shows can be great but the cost to exhibit is often expensive including the time investment, travel and shipping costs. To determine whether or not to participate, ask the following questions. Is it worth the preparation time and follow up on the many unqualified leads and a few maybes? Will your sales staff value and pursue the "prospect list?" Analyze the past attendee demographics before committing.
  • Many small business owners can spend almost every hour of the day at networking events. Be selective about which programs you attend and how many. You don't want to be over-exposed by being at meetings of every association in town. It will appear that you don't have enough business to keep you busy.
  • Is the association you participate in on target with the direction of your business? If you plan to get involved in a professional association, will you meet prospective clients? Will it help build your business in time in some way? If not, find one that will. Spend your time and money wisely.
  • How many times have you had countless meetings with prospects who can never make a decision? Cut your losses and run. If you have tried several approaches and nothing has worked, it's time to let go.
  • All business is not good business. When someone approaches you with a request that takes you too far away from your core services, think twice. Is it a one-time project or can you develop more work in this direction? Those questions should help determine if you should accept the project. If not, pass on this one and offer an alternative resource. You will still provide value to this prospect and they may come back for "good business."

Often business owners need to try new things to test the effectiveness on their business. There is risk for many things you do in your company. You may be able to recoup your money on a purchase but you can never get back your time or effort that went into the initiative. The challenge is not just in identifying the opportunities that are worthwhile but in cutting your losses if you find the cost outweighs the benefit. If you work smart, there will always be more opportunities knocking on your door. | 978-255-1767 | 25 Storey Avenue #290, Newburyport, MA 01950
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