A SECTION FOR ENTREPRENEURS: Building to last - It's a tall order

A SECTION FOR ENTREPRENEURS: Building to last - It's a tall order - DILEMMA: This could be it, the big breakthrough we've been waiting for - the biggest and most prestigious order we've ever had. The team is so excited. It's great. Well, it would be if I

by PATRICK DUNNE works with 3i
Last Updated: 31 Aug 2010

DILEMMA: This could be it, the big breakthrough we've been waiting for - the biggest and most prestigious order we've ever had. The team is so excited. It's great. Well, it would be if I wasn't so terrified that we won't be able to handle it. If we turn this down, our competitors will have a field day. If we take it on and can't hack it, we're dead. What should we do?

ISSUES: This is a big judgment call. How are you going to establish a process that is well informed, considers all the options and has the support of the top team?

A realistic assessment of the opportunity, your current capabilities, your competitive position, the additional resources re- quired, the financial implications and the key risks is essential. Gather all the relevant facts and opinions. Be clear which are most important and be cynical about prestige.

How profitable is the order? Is it priced right? Pricing to win with no margin for error could prove fatal. Can you drop less attractive business to reduce the operational stress? If it means a steep increase in costs for a one-off order, how will you adjust costs later? Will additional finance be required? If so, how easy will it be to raise?

How will the market react? If you aren't the leader, it may move you above the threshold of irritation and provoke a hostile response. If you don't go for the order, will you keep your best people?

Taking high risk without high potential reward is dumb. Think how you might reduce the risk and maximise the upside. One way might be partnering. The customer won't want you to fail, so see what help it can offer you. A big order can be galvanising for the business and may provide an excellent opportunity to challenge your business model.

Elation and terror are perfectly understandable, but making your decision on the 'shall I, shan't I?' see-saw is inadvisable. Stand back and approach it rationally.

ACTION

- Decide how you are going to decide.

- Make sure your process is well informed, and think radically about your business model.

- Brainstorm the options as a top team.

- Don't be afraid to be bold, even if ultimately it means not going for the order.

- Be clear about what you're doing, go for maximum profit and manage the risks.

- Brace yourself for a few more moments of terror.

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