I think that one of the most difficult things for a company starting up is to NOT chase each and every opportunity that comes its way. I mean how do you even begin to evaluate the potential opportunity when you haven’t good a sense of how the whole sales cycle works yourself or the nuances in your different solutions or the type of clients that actually end up buying your offering.
And then there is the guilt of not chasing the opportunity – how can one motivate not doing everything possible to get that deal – when there isn’t many deals on the table at present.
Well, here are some impacts of chasing the deals – not an exhaustive list by far!
1. Well, the obvious first one is the cost to try to win the business – sleek print outs, possible tailor made demo, travel costs, opportunity costs (time that could be spent elsewhere).
2. Loss of focus – if one tries to become all things to everyone then the risk becomes that you could lose your focus and what makes your business unique.
3. Closing too many deals at the same time – well this sounds like a nice problem to have, but be sure you are prepared for it. Depending on your business this could result in not enough resources to implement, thereby falling short of promises or not enough money to implement as generally with most deals money and time is spent upfront (or part of it) before an invoice can be sent and paid.
Lastly, by no means am I saying not to chase opportunities – just spend a bit of time assessing it first and consciously understanding the impact of this. For instance if there are a group of opportunities that will cost you a significant amount of working capital to try to win them – then rather pick the most promising one and chase that first and then move onto the next. This allows you to spread the risk and not spend all your available cash on all these opportunities.