You see, I train and coach in leadership and team building. I’ve also been fortunate to work

Teamwork - Is it for you?

on great teams and I’ve had the opportunity to forge ordinary groups into high-performance teams.

On the other side of that coin,  I was invited on to teams that I was so honoured by the invitation but by the second meeting I knew the project was doomed to failure. I also led some teams (just a few!) that the outcomes were so below expectations that it rinsed out my belly and sent me back to the Leadership and Team-building drawing board.

In both the good teams and the bad, I always asked myself “does every project, issue, etc require a team?”  Every time I attend some form of training that insists that I have to work on a team, I ask myself “are teams always necessary for someone to learn something better?”

Well, to me the answer lies in Kevin Eikenberry concept of teams, a view which I support whole-heartedly. He posits that there are basically two types of teams – a basketball (hockey, football, netball) team and a track and field team.

The “basketball” team must see themselves as a single unit in which regardless to which position you are assigned, the team success requires you to be flexible and able to fill any or many positions on that team at a moment’s notice. The players are interdependent because they know that victory is assured only when they are working together.

The “track and field” team on the other hand, while representing the same club or organization and in this regard can be considered a team, their efforts are really independent. What this means is that if enough of them perform at a high level the team will win but the actions of the sprinter is not dependent on those of the high jumper and neither is hers dependant on the cyclist.

Both types of teams can exist in businesses or organisations and that’s okay. The problem is when we try to apply a standard set of leadership and teamwork approaches to both types of team and expect similar results in each case.

Before I realized this, I had a real problem with teamwork.

You see, my productivity is incredibly high and when I have to work on the hockey-type teams, I don’t do very well unless the others are equally competent. Most of the time, I figure out how to do my part faster and better and spend the extra time sewing buttons on my lips to keep from telling off the rest of the team. The thing is that any offers to help are seen as attempts to expose their incompetency and the resulting resentment is often mutual.

On the other hand, I excel on the track and field team. I can produce at high rates without fear because my performance is not dependant on the other team members. Moreover, they are usually equally talented and skilled in their own area and in no way consider me a threat.

With this insight, I have been able to decide which teams I want to be on, which team best suits which projects, how to better select people for teams and above all, how to lead each type of team. I now teach teambuilding and leadership from this perspective and I no longer feel guilty about not performing well on the “traditional” team.

So I urge you as entrepreneurs and small business owners/managers to first of all decide which type of team would best help you achieve the results you want. Once you do, you can now set appropriate targets and have expectations that are realistic for you as well as team.

In this way, when you pull a team together to work on your projects, their success will almost always be guaranteed.

For me, that article was “sweet like cook food” as we say in our country because it’s the way I approach everything and what I call “knowing the rules to break the rules.”

What this strategic advisor to CEOs and their teams did not discuss in any depth was what is required to play the game that you can win. Now that’s what I want to talk a little bit about.

Self-confidence is the first requirement and I daresay self-esteem as well. You have to trust your unique interpretations of situations and circumstances and be willing to act on them. I can’t tell you how many times I have ignored the “rules” not because I wanted to be rebellious but because they either didn’t make sense or didn’t suit my purposes.

So I write long articles because I find that the attention span of readers expand to match how well the article is written. Furthermore I demand as much of my readers as they demand of me.

Knowing the rules is an absolute must. You may want to call this a no-brainer and I would agree with you because only someone with no brain would attempt to do business without knowing the rules. Yet I see this all the time – directors who have not read the company’s articles of association or business people who know nothing or little of the rules and practices in their area of operation so they break the rules, unconsciously.

By taking the time to learn the rules, I have discovered rules that have been so badly written that all I had to do was to apply those rules to win the game I was playing.

You must know yourself. One of the biggest rules of success is to know your own strengths and weaknesses, or where you have muscle and where you have fat as I like to say. Over the years, I have learnt that this is what my clients are willing to pay for more than anything else.

First of all, I only try to persuade the people that I believe or know that I can help to buy my services, in this way I can provide the experience that I know that they are seeking.

It’s not by chance that my mantra is “you’re at the core of our solutions!” My clients play a big part in determining what a solution to their problem would look and feel like and then together we move it from conception to reality.

I’m honest and straightforward by default and a day does not pass without someone saying to me “how could you say that?” All of the time it’s because that’s what I think or feel and because I have learnt that in the game of bullshit, a good dose of horse sense is a rare treasure which people will pay top dollar for.

Research is a key factor in playing the game that you know you can win. I don’t mean the generic type of market research you learn in business school. I mean knowing who the real influencers are in a business and understanding and being able to predict human behavior.

I mean understanding that when you do repairs at a house, a woman is more concerned that you don’t mess up her house while a man is more concerned about the quality of the job you do.

So what is your game? Have you discovered your exceptional skills and talents? Have you also discovered that large group of people called a niche that NEED your skills and talents? Or are you still playing the game of convincing everyone within a 20-mile radius that they should WANT your skills and talent?

If you’re not playing the game that you can win, it’s not too late to call a timeout and rethink your game plan. After all, winning is not for losers.

It’s true. Most business people pay to have business plans written to get

Businessman reviewing business plan

funding for their business and then afterwards they don’t seem to find them very useful. I’ve often wondered why. Could it be that they are usually written from a long term perspective (typically five years) and the owners cannot find any short term uses for them?

Well, I’m here to help. I’m going to suggest at least three ways in which you can get more out of your business plans. Ready?

1)    Review your business plan frequently

Business plans aren’t meant to be static. They are mostly a long-term strategic tool, but to be effective you need to look at them regularly and update your strategies. How often should you do this? I would suggest quarterly. Look at which of your strategies are working and which are not. Do more of what is working and less of what isn’t but learn lessons from both. The whole idea is to use the business plan to make you business stronger.

2)    Turn your business plan into an action plan.

Your business plan is all about long term strategy. It’s really the big picture about how you’ll run your business. So take that long-term strategy and turn it into a short-term action plan. For each strategy you have in your business plan, write a short-term action plan.

This plan should be for the next three to six months and it should include every step you will need to take to accomplish each goal in your plan. Include what the actual activity will be, what resources you need to do it (employees, money, time, equipment, etc) and write out a detailed plan for it including deadlines.

I have to advise you that depending on the level of detail you add, the first time you engage in this activity, it may take between two and eight hours. But the next time you do it, (remember to review and revise this quarterly) it will take a lot less time.

Each time you do this you are building on the time before and your planning skills will become more and more effective. My experience also shows that the more detail you include the more effective your plan will be.

3)    Add a lifestyle component to your business plan.

I am really serious. Don’t be afraid to do this because as an entrepreneur your business life affects your personal life and vice versa. Some years ago, I wrote a business plan for my business and included a component that described my ideal lifestyle. My bank manager nearly had a heart attack. Does a bank care about your lifestyle? Mine didn’t but you should. Take time this week to add a lifestyle page to your business plan. At a minimum, include the following:

• how many hours you want to work
• where you want to work
• how much vacation you would like
•  and what your work/life schedule would look like

You have to go through your business plan and make sure your business strategies support your lifestyle goals. What you may find is that you’ll have to employ strategies for hiring additional staff, streamlining operations, and creating better business systems, but it will be worth it.

So there you have it! Three strategies to guarantee a business plan that works now go out there and work that plan!

First of all you will need to remember that writing a speech is not like writing a report or a proposal. These are usually delivered to the user to be read and decided on in the user’s time. These users do not care about your body language when you hit the send button on the email or the fact that you’re not making eye contact with them as the document sails down the cyber highway.

On the other hand, the speech that you write will be listened to by an audience whose mood you cannot predict, whose eyes you will have to meet at some time and whose attention you had better win within the first 8.57 seconds of your speech.

So, do you want to write a speech that grabs your audience’s attention, one that is fit for its purpose and rushes you to the top of the “must listen to” speakers? Then here are some tips to have you writing speeches like a boss!

Begin writing your speech by being clear about your purpose for

The Best Way to Write a Speech

speaking. Write it out if you have to. The first thing I write for every speech is “the purpose of this speech is to…” Remember that there are 6 main purposes for speaking: to inform, explain, entertain, inspire, persuade and to impress.

Then you want to collect all your ideas and information on the topic. A good place to begin is by asking the question “what do I know on this topic?” Unless it’s a topic that you know little or nothing about (in that case you should politely refuse the speaking opportunity) inside your head is a good place to start. Then you can follow this with the regular research that you’re familiar with, you know: searching the internet, the library, friends and colleagues, etc

Next you have to think of a clear, specific, easy-to-understand structure for your speech and organise your material in a way to support this format. You absolutely need to do this because if a speech is to achieve its purpose, your audience must be able to follow it. Some ways you can arrange your speech include: past-present-future; problem-cause-solution or first-next-last.

Just remember that a speech which is well structured allows your listeners to accept your ideas, remember what you say and take the action you want them to. That’s what you want when you speak, don’t you?

A speech usually has an opening, a body and a conclusion. That’s how you deliver it but when you write it, you’re going to prepare the discussion part first. Yes, you heard me so I won’t even repeat it. Think about it. The discussion is the main part of your speech accounting for about 75% of the content. Doesn’t it make sense to begin with the most important part of the speech first? Even so, it’s easier to design an appropriate introduction after you have something to introduce.

When you’re finished with the discussion or body of your speech, then you want design an appropriate introduction. I say design because an introduction must be really fit for purpose. Also it’s a two-part process made up of an attention-getter followed by a preview. Together they work like this: Did you know that there is about $680 worth of transactions on e-bay every second?(attention-getter) That’s why I will spend the next 20 minutes telling you exactly how you can make $18,000 in one minute flat on e-bay (preview).

Your next step is to plan a meaningful ending. This is another two-part process made up of a review/summary of your speech followed by a memorable statement. The first part is pretty straightforward. You can review the main idea of your speech, summarise the main points or combine a review and a summary.

The memorable statement can take many forms including a return to the theme of the attention-getter, pointing the audience to the future, calling for some specific action or a tie-in with whatever or whoever will follow your speech.

Now for the big question: should I write the speech out in full or should I just make notes? Well, it depends on your mode of delivery. Are you going to deliver a memorised speech? Read a script? Or give an extemporaneous speech? That’s up to you.

You can write out you speech and memorise it or present it from the script. This is called the manuscript speech and is used for formal speeches where it is important to say the right words and not forget any important points. This requires superior presentation skills so that you do not appear as though well…you’re reading the speech or you have memorised it.

That leaves the extemporaneous speech, the preferred approach by far for many speakers. This is when you prepare note cards with the exact ideas and information that you want to share, but the way you share that information is decided as you go along since you have emancipated yourself from a prepared script.

Whatever you choose, write in a conversational style using the active voice as I have done in this article. This gives you a chance to sound more sincere, confident and authoritative. And finally, just remember: how effective you are at achieving your purpose begins with how efficient you are at writing your speech.

You will spend all your money on Christmas items you will no longer want in the New Year. You will eat and drink food that will be distributed evenly across your butt and gut in unseemly proportions.

And on New Year’s Eve you will become contrite and remorseful and you will make New Year’s resolutions designed to ensure it does not happen next year!

The tradition of the New Year’s Resolutions goes all the way back to 153 B.C. when Janus, a mythical king of early Rome was placed at the head of the calendar. With his two faces, Janus could look back on past events and look forward to the future all at the same time.

New Year’s is the only holiday that celebrates the passage of time and as one year closes and another opens, people become introspective and often make lofty but well-meaning resolutions intended to bring about meaningful change in their lives.

However well-intended, research and reality shows that a high percentage of these resolutions are not kept. Don’t ask me why because I can only speculate!

Perhaps too many are made because you’re swept along on the holiday tide. Or maybe you do want to make some changes in your life and you believe that making profound declaration on how these will happen at the beginning of the calendar year will actually make them happen.

Whatever your reason, I’d like to increase your chances of keeping those resolutions. So I’m sharing the best way I know how for making resolutions and actually keeping them, including my SUPER “New Year” approach that guarantees me almost 100% success every time.

I will share with you:

1. The best way to make your resolutions so that you will keep them
2. What to do to increase your “keeping” success rate by at least 45%
3. Some of the personal attributes that will help you
4. Why you need to celebrate your successes
5. And my SUPER “New Year” approach that works every time!

So go on!  Discover how to make and keep New Year’s Resolutions!

Happy New Year to You! And I want you to start the New Year right!

In response, I was so tempted to point out that if you’re in the business of delivering a service especially if it’s in the information sector, then you and your business are one and the same. But not being one to miss an opportunity to add insight, I decided that if you and your business are so connected, personal success must equal business success.

So I asked myself what makes me successful as a person? Assuming that you’re just like me, I sharing my top 7 principles of success that I know help me to be the person and then the business person that I am, hoping that they will help you too. Are you ready?

1. Resolve to succeed. Yes! Simply decide to be successful. If you don’t make this decision then you will find that you give up and give in before you even begin. This helps me to ignore the naysayers and opens my eyes to many, many ways to achieve my goals.

2. Set goals. This is really your gateway to success. There is something about writing down your goals, I mean real pen and paper writing down that seems to imprint them so completely on your psyche. And when you determine the steps that must be taken to achieve them and be willing to take those steps, as we say in the Caribbean “yuh gone clear!” or more sedately, success is assured.

3. Doing what must be done when it must be done. In a word – focus! Focus and self-discipline go hand in hand and between them both, I can resist the temptation to have a good time and miss the “lifeline” by which I told the client that I would submit the proposal. For me, doing what must be done when it must be done is seldom negotiable.

4. Take action – especially in the face of uncertainty. To me the fastest way to acquire a large piece of real estate on Failure Street is to know what must be done and being paralysed by fear into inaction. I know you need to be certain about the outcome; your perfectionist attitude steps in. But in the words of Michael Port, Author of Book Yourself Solid: Often the very people who are perfectionists, control freaks we might also call them, and who therefore think that the projects they complete will be perfect can’t actually complete projects, much less get started, in many cases. I learn to take action even as I am scared of the challenge, and learn as I go forward.

5. Know the rules. I never cease to be annoyed, amazed and amused by the rate at which people enter a particular arena and try to survive without so much as glancing at the rules. There are rules for living, for parenting for using the bathroom, for relationship and there are rules for doing business. At some point, mostly near the beginning, I learn the rules inside out and because of this, I learnt that knowing the rules and applying them is more likely to get you what you want than breaking rules you don’t even know.

6. Get in touch with your spirit. Notice I did not say join a religion or go to a church – although this could be a part of the process of finding your spirit. When you’re in touch with your spirit the entire world looks so completely different. The drama falls away, there is no problem that does not have a solution and hope truly, truly springs eternal in your breast. Yeah, getting in touch with your spirit guarantees success.

7. Laugh. You heard me correctly, LAUGH. I laugh at life. I laugh when the document that I worked on for two days disappear down a computer dark hole and I laugh when people recite to me all the things I must change about me. I laugh at the antics of my grandchildren and when my darling dog Peaches takes 5 seconds to disdainfully reject the dinner I specially prepared with love for her. And above all, I laugh at me and remind myself that no one died and made me God.

So now I’ve bared my soul and shared with you the top seven principles I live by that makes me successful. I admit that I could write a whole chapter on each of these and perhaps I will but for now, it’s just to get you thinking on how to be a successful person.

Of course my success isn’t complete because I’m still growing and learning and unavoidably, I keep moving the goal posts and constantly redefining success. I also want to remind you that the measurement of success is individual to the individual but the world seems to agree that the common yardstick is money.

Now all I ask of you is that you help us all to grow and succeed, so drop your comments below and share your success principles with everybody so that we can learn from each other and be successful together.

6. Coaching an employee who is having trouble with company policies, another co-worker or having performance issues. You want the best for your business, don’t you? Then you have to be able to coach your employees to give you just that.

7. Developing and recording HR policies – Do you have an employee handbook so that everyone knows the rules and understands them clearly? If not, this leaves your company vulnerable if an ex-employee decides he or she has cause to sue you.

8. Developing Standard Operating Procedures (SOPs) is an HR function that is critical to the protection of your business. For example, ensuring that keys and equipment are handled properly, that employees follow the procedures for delivering exceptional customer service and handling cash correctly can make the difference between a profit and a loss.

9. Handling grievances and disciplinary matters is an important HR function that must be well managed since it has the potential for the most fall out and possible cost to the business. Yes, that’s true. Too many cases are lost by employers because they either did not know or did not handle grievance and disciplinary matters correctly.

10. Terminating an employee – do you know the difference in meaning and procedure between laying-off and terminating an employee? If you answered “no” you will be surprised to learn that some businesses that are bigger than yours do not know either. And pleased be informed that “go from round me!” as a tool for terminating an employee is really a direct route to a law court.

Now I have completed my ten HR functions for small business, I hasten to remind you that these are not the only functions that should engage your attention but these are among the important ones.

Sadly, many small businesses neglect this aspect of their business and not even high employee turnover, visits by personnel from the Labour Department or malicious maligning of the business by past employees can serve as motivators to changing this.

Perhaps you are among those small business owners that believe that they are doing just great without HR functions or skills, thank you very much! Wise up right now because with your head buried so deeply in the sand, people will begin to believe that you are thinking with the part of your anatomy that is exposed.

I want to remind you that just as much as you need professional level skills in the form of an accountant or a lawyer, you should know that you need that degree of skill to professionally manage your human resource.

If you don’t have the required HR skill and or experience and you believe that your business is too small to have even a part-time employee for this purpose, consider outsourcing to a company that specializes in HR for small businesses like yours. This option will give you the benefit of the expertise you need while still keeping your costs as low as possible.

Remember, HR does impact the bottom line.

P.S: Drop me a line and let me know how you’re handling your HR. May be I can help if it’s not where you want.

Human Resources Management (HRM) is a delicate balancing act in allocating resources that you can’t continue to ignore and be successful. Don’t believe me?

 Try solving this equation that I came up with:

[Mhr = (Xcs + Ie/er)c ] =SROIf   

Give up? Would the key below help?

M = management

hr = human resource

X = Excellent

cs = customer service

I = improved

e/er = employee/employer relations

n = infinite

S = Superior

ROI = Return on Investments

f = forever

Did you come up with something like this?

Management of the human resource results in continuously excellent customer service and improved employee/employer relations and these together guarantee superior returns on your investment forever.

Then I’m proud of you and you’re well on the way to making sure that your people are truly your greatest asset.

Most small businesses have limited financial resources. Therefore, I’m not surprised that you tend to concentrate these on the obvious activities that directly increase your income. No problem there.

What surprises me is that very often, HR issues do not make it onto that list and when they do, they are so far down that a simple frown can knock them completely off!

What! You don’t think that with one employee you need bother about managing any human resource? Guess what? I’m not even mad at you because that’s also the mindset of business with five or more employees and even some with as many as 150 employees!

Ok. I can hear you asking: So what is this management of human resources? What are these HR issues you keep talking about and why should I want to spend any of my limited time and scarce money on these areas?

I have been challenged on this so many times and from so many perspectives that I have decided to “answer” in black and white right now before you begin to think that I don’t know what I’m talking about.

So what is Human Resource Management (HRM)? I’ve come to realize that it is how you acquire, retain, manage and develop people for and separate them from your business such that they help you to reduce cost and or increase revenue.

This definition throws up a wide range of issues and suggests that a business should engage in an unending number of functions with little regard as to if you have one employee or one hundred.

Actually, even if you have no employees and intend to hire, you should also be aware of these issues and be planning for them.

So let’s begin by considering an incomplete list of some of these functions. In this post I will share five and in the next post five more. So here are your first five:

1. Finding employees when you need them, and hiring the best ones that you possibly can. Will you use qualifications, experience, skill, personality or some combination of these? Or will you outsource the function to a service provider who looks after these issues for small businesses?

2. Rewarding employees for work – How will you pay them? Statutory minimum wages, market rate, above market rate, between statutory minimum and market rate, by the hour, the week or by performance? Or will you let them take home products at the end of the week?

3. How will you keep them – Above average pay? Offering substantial benefits? Sharing your vision for the business and encouraging them to grow with you? Or will you just tie them to a post until you need them?

4. Helping employees to add value to the business – including training and development programs to help employees do their work better, learn company policies and procedures, as well as any new job responsibilities.

5. Do you have job descriptions for every position backed by performance standards and annual performance evaluations? Or will your evaluations consist of “I ain’t like how you working”?

Yes, I understand first hand your time and money constraints which lead you to priotise based on the urgency of the problem. I have these constraints too but I know from experience that looking out for and looking after your people really matters to the growth of your business.

I also know that this is not easy when you have to negotiate with suppliers, prevent the new client from going south and look after your ailing mother all at the same time.

So! Watch out for the next post where I will share five more of the HR functions that you should be performing in your business with the intention of raising your consciousness of the fact that HR is big business for small business.

In the meantime, step out of your comfort zone and drop a comment in the box below and let me know what are some of your HR challenges. Chances are I can give you a tip or two that can help you. Do you want to pass up on that?

But vessels weren’t meant to remain in safe harbor. So, pretty soon, I will  watch in awe as another fishing boat loads up with bait and supplies and sail into the mighty ocean for the fishermen to ply their trade. To get the best catch, they have to lose sight of the shore and occasionally we hear of fishermen who go missing for sometimes more than 20 days and then turn up safe in another island.

 The true spirit of an entrepreneur is evident when you can live your life and grow your business using this “fisherman approach”.

 Many times in your business and in your lives you reach a point when you’re no longer growing and change is necessary. This means that you have to leave the safe and familiar behind; you have to let go to hold on.

But unlike the fishermen, even though circumstances are not pleasant, you  tolerate the increasing discomfort because you’re afraid of the unknown and dare not lose sight of the shore. This leads you to convince yourself that what is wrong is external to you – the government, the church, the economy, your partner, your children.  I don’t even want to say that you’re wrong but what I want to say is that when you change the way your perceive these external “causes” your whole world, including your business, changes as well.

 I have learnt from experience that these unfavourable circumstances in our businesses are signals that we’ve done as well as we can at this level and now it’s time for us to move up and experience new levels of business and personal potential.

 Holding on feels safe but just like the fishing boat, our businesses aren’t meant to always stay in a safe place. They were meant to grow and provide society with valuable products and services and provide us with an income, a comfortable life and personal satisfaction.

 I encourage you to examine your business in its entirety and if you’re unhappy with how it’s performing, examine yourself. Perhaps you’re ignoring some of the immutable laws of business/life. For example, it is pretty well known that as an entrepreneur the rate of your success is significantly determined by your network of friends, associates, vendors, mentors, advisors, etc, who can help you to overcome challenges fast and provide guidance as you grow.

 Yet too many entrepreneurs extend the pain or difficulty by trying to “do it” alone. I have mentors, advisors, business associates, a personal trainer, a money management coach, all designed to help me achieve my goals speedily and safely.

 So I encourage you to step out and accept new challenges. Remember that every one of us has been designed to achieve high levels of success backed by the ability to prosper and the right to be happy. The resources you need to do this are within you and you will discover them when you sail out of your safe harbor, lose sight of the shore and take on the rapid waters of opportunity.

You will hold on when you let go!

What am I talking about? You know, that large contract from a prestigious  client that sets you up for at least a year. It lets you pay off all the non-routine bills and buy a membership in the local “Holier-than-thou club.” Your colleagues regard you with awe and admiration and your competition coughs and sneezes from all the dust you kick in their faces.

So you’re fortunate and your dreams come true and now you’re asking: How did this gem of a contract morph into the worse nightmare of my life?

I know. In the excitement of bidding for the contract, you forgot to consider the cons and pros of delivering on the contract. Well, let me examine some of them for you.

Cons of big contracts for small businesses

1. You need the cash flow and infrastructure to manage a really big contract. Depending on the nature of the contact, yes, you may be able to sub-contract but that requires you to manage that relationship(s) as well as deliver on the contract as required. You also hve to be able to pay your sub-contractors when they have delivered their part of the job.

2. The bidding process can be long, complex and costly. I can tell you about this! Once, out of curiosity, I decided to initiate the process of going after a big contract. The specs were on a CD for which I had to pay US$50.00 and having bought it, I nearly had to hire someone to help me understand the requirements. And I hate to tell you that sometimes they have already selected a consultant and putting the job out to tender is only to appear transparent or satisfy some statutory requirement.

3. A big business might negotiate you into the ground. You see, they have the power and the bigger the contract, the bigger the discounts they are looking for. Furthermore, they will sometimes want something redesigned that you already have in stock – at no cost to them.

4. They demand more and better service. You were going along peacefully running items through your cash register and placing them in a plain plastic bag and handing them to your customers with a smile. Now that you’ve landed that big order, you’re required to have bar coding on the items, inventory controlled tags as well, and they need to be shipped in a special way. The changes that you made to your business wiped out 75% of your profit on the contract.

5. The agreed payment terms may lead you to cash flow problems. Think about it. Your smaller customers pay in 25 to 30 days but this big customer wants to pay in 60 – 90 days. Moreover, your suppliers and your landlord will not wait this length of time to get paid from you. If you don’t have enough cash to pay your bills until you collect, you’ll need to borrow money for working capital or factor your receivables. Either option will add to your costs and cut your profit.

Now that you have been warned somewhat about going after big contracts for your small business, that does not mean that you shouldn’t go after the big bucks.  After all it does have its advantages. 

Pros of big contracts for small businesses

1. They are a yardstick of success. Don’t pretend you don’t know what I’m talking about. When you land a big client, all your little repeat customers or clients seem to fade into insignificance. When you can brag that you did work for “Big Mcguffie Inc” some people will not wait to find out what you did before they begin to spread the word about your success.

2. They can improve your bottom line. Yes, if you get it right, you will be able to buy your dream thingamagig and pay off your non-routine bills as well, when you land that big contract.

3. A big contract can work wonders for your reputation. When you successfully acquire and deliver on a big contract, the word that gets out is equally large and the reputation which you will gain will attract more sizeable contracts.

4. They can improve your business operations. Just imagine that you have decided to do what is required to go after a big contract and to make as much money as you can from it. This may require you to examine many of your systems, hire new staff and buy new equipment. While these may be in the short term, the benefits continue way into the future.

The big question is: Now that I have weighed the pros and the cons, how do I decide if to go after that big contract for my small business?

The answer is in the numbers.

Start by looking at all the cost involved in bidding for and delivering on that big contract. Include the cost of your and your team’s time to prepare the bid.

If it’s for the supply of products, determine what your cost of goods or inventory costs are at different volumes. Know what the packaging and shipping costs would be – being sure to include the hourly cost of the employees needed to pack and ship the goods and the actual cost of the packaging and labels.

Determine whether your company would have the manpower and equipment to get the big order out on time – and do it without interrupting service to your existing customers.

And put your cash flow under the microscope. Do you have the cash to satisfy a big order and then wait 60 – 90 days for payment? If you have to borrow  money, check the interest rates to be sure it’s worth the while.

When you have all the numbers in front of you, then and only then should you answer the question: This big contract for my small business – Is it worth the money?

For more resources for your small business do checkout http://www.itds-training.com or http://www.lornabarrow.com