Thank you for the opportunity but it’s a no from me
If you’re running a business then you’ll know that new ideas, new opportunities and well, shiny things come up all the time.
Sometimes the new idea is a game-changer, but more likely it’s nothing more than a dangerous distraction. And I don’t know if you can relate to this, but the onslaught of new ideas can be mentally exhausting.So how do you tell the difference without wasting a load of time and energy fleshing out each and every idea?
What’s the cost of the new opportunity?
The new idea or opportunity you’re looking at might have a direct financial cost to your business. Can your business can really afford it? And you need to know the financial downside – what will it cost if it doesn’t work?
When Richard Branson talks about his seemingly risky new ventures he says he always works out the very worst case scenario. And he’s sure he can live with it, financially and emotionally, before he decides to go for it.
Financial risk aside, there’s the very real cost of your time. How will you find the time to do this new idea justice; presumably your diary is already pretty full?
The opportunity cost of the new opportunity
Pursuing a new idea that wasn’t in your plan will eat up financial resources that you hadn’t banked on. Before you say ‘yes’ to this opportunity, what will you now have to say ‘no’ to?
Is it worth it?
If you spend on this, what budget will you have to cut from somewhere else? What can’t you do now?
Never underestimate the time and distraction factor of a new idea. What won’t get your attention now? What other projects will you need to shelve? What do you need to take out of your diary to make this new idea happen?
And by the way, thinking you can cram it all in somehow isn’t going to work!
1. You’ve got to know where you’re going
You gotta have a plan!
When you’ve got a really clear plan of where you and your business are heading, and you’re clear on why you want that future, it becomes much easier to sort the real opportunities from the distractions.
You’ll know instantly if this new idea fits your business strategy, and how it might affect where you want to go. Having a clear plan makes it much easier to accept or reject new ideas.
2. You need a financial strategy
Very few businesses have a financial strategy, and the few that do will always outperform those who wing it. Get clear on how much profit you want to make, how much cash you want in the bank, how much you want your business to be worth, how much you want in your pension, and what financial future you’re building towards.
Having this level of clarity about your future means you’ll be able to see the financial cost and risk of new ideas, giving you a level of certainty about how a new idea does or doesn’t fit in your future.
I often get calls from my clients wanting to run a new idea past me. Being their voice of financial reason, I’ll always check it against the financial strategy and the future I know they want to build. Having this objective sounding board can help to take the excitement factor out of the decision and keep it based on calm logic, based on how well it fits with the current business and financial strategy.
A really great person I know has just become available – can we hire them? (even though we hadn’t planned to recruit anyone just yet).
I’ve just seen a great new office, it will be perfect if we keep growing like we are now…
I’ve just found this expensive training course, looks like it could be interesting, shall I book it?
I’ve had an idea for a new service for our clients…
I’ve just read about this new marketing strategy and think we should invest some money in it.
A client has asked if we can start doing something new for them; we’d need to spend time and money developing it though…
I want to buy an office…
Sometimes you need to take the opportunity
Obviously I’m not saying we should ignore potential opportunities, or shun new ideas. The world keeps changing and we need to keep up. BUT we do need to make sure we’re making decisions that will make our businesses stronger, not weaker, and move us closer towards the life and financial security we want.
I see too many businesses that flit from one idea to another and never get any traction, burning cash on the latest whim, and wondering why they don’t have any profit on their balance sheet or cash in the bank.