Yes, no or maybe?

There’s a tendency for business owners and entrepreneurs not to want to pass up the opportunity of a potential sale.

The famous saying attributed to Richard Branson goes something like, ‘If some one offers you an opportunity, say yes and think about how you’ll do it afterwards’. 

There is good sense in this. You want to show confidence and enthusiasm to a prospective customer so making them aware of your immediate concerns is not the smartest sales tactic. 

For lifestyle businesses too where the owner is the person delivering the service, saying yes and being positive at the outset is a good tactic. If it turns out on further investigation that it is not such a great idea you can always offer help in some other way. Perhaps refer the prospect on to someone in your network who would do a great job. That way you make two people happy and spread a little bit of goodwill.

Pricing specialist and business thought leader Ron Baker argues that ‘knowledge businesses’ - those that deliver value by means of their intellectual capital and ‘know-how’, should consider charging less if they gain new knowledge from a particular assignment. They may not make as much profit as on a more routine job but they have added to the bank of the firm’s knowledge which should be beneficial in the longer run.

In these challenging times, where sales and cashflow are at a premium, the inclination to say yes is greater than ever.

There are circumstances however where I believe that turning down a potential sale is the best thing to do. By all means try to refer the prospect on to someone else if you can, but sometimes it is better not to to proceed.

An example would be where the business has a clear niche where they do specialised and highly profitable work. Stepping out of that niche to exploit an opportunity will shift focus and resources from what the business already does very successfully. So it may not be the best approach.

Another instance where caution is recommended is where the new opportunity would require significant input from the owner. If this would shift their focus from managing their core business, the benefit from the potential new sale might not outweigh the costs.

Passion and enjoyment are also important. You may make money on a new assignment but if it doesn’t make you happy or inspire you, you may want to think twice.

So in many cases I would agree with the great man and saying, ‘Yes’ and going for it is the best approach. 

Every now and then though, after reflection, a better way forward might be, ‘Thank you for the opportunity but we are not able to help you this time’.

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Back to the fray

For many businesses, after the initial panic and scramble to ensure survival, lockdown has been a time of treading water.

Employees on furlough, rent holidays negotiated with landlords, non essential spending halted, loans secured. Then its been a matter of waiting for things to change.

There is still a long way to go as the Government advisors keep reminding us but lockdown is starting to ease with the re-opening of non essential retail imminent. The hospitality sector is expected to follow soon.

The ‘new normal’ means social distancing and strict hygiene measures will remain in place. Business owners and their teams have been planning how they will re-open in these circumstances.

Much of the planning will be operational - one way systems to limit contact, hand sanitiser stations, screens for employees, restricted customer flows and so on.

There are other factors to consider which may get less attention in the rush to re-open. 

The biggest of these is answering the question, ‘Is your new business model viable?’ 

In other words, after estimating your sales and allowing for costs of your new way of working, are you making a profit? 

If not, what is your ‘break-even’ level of sales?

Knowing the answer to both of these questions is critical in my opinion. 

The first because it is the acid test for your recovery plan. If you are losing money to start with you need to know this and have a projection of how long losses can be sustained for. 

The second is the initial target you are aiming for. Reaching break-even as soon as possible is imperative if the business is to maintain financial viability in the longer run.

I would argue that the most important aspects of financial management at this time are forecasting (of projected profits and cash flows) and regular monitoring and review.

The easing of lockdown is a time for optimism and hope.

Combining this with good financial management will increase your chances of weathering the storm until we reach calmer waters.

www.base52.co.uk

Time for reflection

One of the features of the lockdown, for most of us at least, is having more time.

Less time on commuting, socialising, shopping etc means more time for, well...whatever takes your fancy, as long as it doesn’t involve non essential travel or mingling with other households.

I’ve been working from home, doing a bit more gardening and had more time to think. 

I’m reading, ‘The Passion Economy’ by Adam Davidson and one of the chapters is about a behavioural scientist who is motivated by influencing lots of people to make positive changes in their lives. One of her techniques is to write a long list of things you are good at doing. She is evidently a person of many talents as her list took a few days to compile. I think mine will be finished much sooner.

When you have the list you then draw a circle around the things you enjoy or are passionate about. If you can make these things part of your career or your business, that’s a very good place to be.

This is not too far away from the Japanese concept of ‘Ikigai’. Broadly translated this means. ‘Reason for living’. If you can find enjoyment and purpose in your work, you will be more fulfilled and probably do a much better job.

Before starting my business 17 years ago I read, ‘What colour is your parachute’, the seminal career planning book by Richard N Bolles. This has a similar approach to helping you choose your career path if you reach a fork in the road. What are you good at? What do you enjoy and what kind of environment do you like to work in? It helped me reach a conclusion that I wanted to be my own boss and shape my own destiny.

So most of us have more time. Time to reset and reevaluate things.

I might just have a go at my list today. Not because I’m at a particular crossroads, but because I have the time and it might lead to something positive.

Who knows, a new career as a wine-maker or bee-keeper may beckon?

www.base52.co.uk