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Profit or Peril?
How to Decide Whether or Not to Take on a Project
By Deborah L. Daily
We’ve all heard the saying, "time is money." Knowing this is true, how we spend our time is critical – understanding how and when to take on a project is essential. What’s more important, we don’t want to take on a project just for revenue – a good businessperson seeks out profit!
If you’ve been invited to bid on a project, that’s great! You’ve done your networking, made the right contacts, and your marketing is actually working. However, before spewing out a proposal, get the facts…to ensure a successful project.
Here are key questions to ask to avoid having a project suffer from too little funding, not enough detail, or too much scope creep:
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Are the project’s objectives and benefits clearly defined? An ill-defined project is a good indicator that your buyer may be “green” or new to the industry, or he/she may be unsure of exactly what needs to be done. You don’t want to have multiple proposals created, only to find out that you just helped your buyer define his/her needs in order to turn the order over to your competition. If a novice buyer is involved, you’ll want to position yourself by “lending a helping hand” to enhance buying loyalty. |
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A critical yet often over looked question, “Do you have a budget?” It is important to determine if there’s a “magic” number that the buyer is comfortable with. Or better yet, what are their expectations? Do they want a 2007 BMW for the price of a 1980 Chevy Pick-Up truck? Has the buyer even considered the source of funding? This question is also a good indicator as to whether this is a viable project or simply a pipe dream on someone’s wish list. |
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Who’s responsible for making the buying decision? The builder, the general contractor, the client? Is it a committee? If so, who are all the players involved? Understanding who has the “power ball” can often help you negotiate any political waters that may exist. |
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Who else is bidding on the project? Knowing who the other players/competitors are is essential. It can help you do your “homework” in understanding what makes your company “stand-out” and why someone should do business with you. |
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Ask yourself; can you truly deliver what you promise? If a project will over-extend your resources such as cash flow, key-personnel, time, and other vital resources, it may be better for you to walk away from the project rather than become enamored with the dollar signs. Biting off more than you can chew will come back to haunt you. |
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Why did the prospective client or buyer call you? Did another company or individual refer you to them? Are you simply there to fulfill the “third-bid” requirement? What are they looking for in a business partner? These questions can help you determine your buyer’s hot buttons and assess if this project is a good fit for you and your company. |
There are obviously many other questions you can ask – some more specific to your industry. However, it’s important to do your homework and find out as much as you can about the project BEFORE submitting your bid. Last but not least, be sure to LISTEN to the prospective buyer’s answers! Better to have a FUN and PROFITABLE project rather than lost revenue and peril!
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Final Thought...
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