Ask SCORE: When to Say No to a Business Opportunity – Albert Lea Tribune

Ask SCORE by Dean Swanson

In my experience, it’s hard for a small business CEO to say no to a potential opportunity. I often see times when a business owner needs help making these kinds of decisions. So when should an entrepreneurial CEO say ‘no’?

Dean swanson

To help entrepreneurs make strategic decisions in these situations, Brett Farmloe, Founder and CEO of Markitors (and one of SCORE’s content partners), asked CEOs and business leaders for their best perspective. He asked “What is the sign that a business owner should probably say ‘no’ – and pass up an opportunity?” I share several ideas of CEOs of small businesses.

When you go beyond

Sometimes the timing just isn’t right and you won’t have the resources to say “yes” to a new opportunity – and you will. Let’s say you’ve just finished expanding your business premises and someone contacts you about a new business or partnership.

The temptation might be there to take the plunge, but you know you’ve almost exhausted your line of credit, and you can’t spare employees for the new project either. Don’t stretch out too much. Just say no. “

– Lily Yu, Oak Springs Realty

When the long-term costs outweigh the short-term benefits

There are times when a chance offers a clear short-term advantage – a position with a good title, an investor offering to save your cash-strapped business in exchange for a 50% stake.

However, you are well aware that there will be considerable costs in the long run. Perhaps the opportunity with better benefits offers little prospect of advancement and causes you to focus on an area that you don’t particularly enjoy. Alternatively, you value autonomy and control and see that being a part owner will only cause you problems in the future.

Randall Smalley, Cruise America

When you share your time too much

I’ve seen a lot of entrepreneurs do this often, with four or five business ideas coming up simultaneously. One fantastic business is worth more than several bad ones. It is almost impossible to divide your time, focus, and dedication among many projects. Focus on one and make it shine

– Henry Babicheknko, Stomadent

When you don’t have the capacity

As a business owner, it’s important to know how much work your team can take on. You’ll likely have opportunities that will be hard to pass up, but do a thorough audit of each team member’s ability for the job they are currently doing before taking on more responsibility. You want to be sure that everyone has the ability and the capacity to meet new commitments and impress your new customer.

Nick Santora, Programs

When the numbers don’t support the decision

You may feel great and excited about a business opportunity, but if a spreadsheet can’t validate the worst-case scenario, a business owner probably should be successful. Common examples might be extending a job offer for a new role or taking on a new cost at the expense of another opportunity.

Before you say “yes” or “no” to an opportunity, do the best and worst calculations to see what would happen to the business with either path.

Brett Farmiloe, Markitors

When a toxic customer wants to do business

It’s likely that at least 80% of the external friction your business faces comes from 20% or less of your customers. Business owners should consider “firing” problem customers and using their team’s physical and emotional energy to find and serve more ideal customers.

Saying “no” to continuing your toxic business relationships can pay off for the success of your business. Passing on toxic customers can reduce your business’s bottom line, increase efficiency, and allow you to focus on what makes your business great.

Wesley Jacobs, Apollo Medical Travel LLC

When a potential partner is out of state

Partnerships are a way for business owners to market their business and collaborate with like-minded businesses. Sometimes this may require a partnership agreement.

If a partnership agreement requires the business owner to accept applicable law outside of their national or local jurisdiction, they should probably pass up the opportunity. Should a contractual dispute arise, the business owner would be responsible for travel and expenses to attend court hearings.

Annette Harris, Harris Financial Coach

When a different option could lead to better returns

As a business owner, you have to take a lot of risks. Risks are a good thing; it’s hard to be successful without risking failure, and you tend to learn a lot. That said, it’s important to understand the extent of risk you face when you come across an opportunity.

Sometimes the risks aren’t just about how you might fail. Instead, they relate to how much you could earn. Equally important to consider is the lost profit of an option not chosen. In other words, you need to determine if the opportunity before you is the best one available.

If a different choice could lead to better returns, be sure to fully assess the scope of your options before allocating time, capital, and internal resources.

Mike Grossman, GoodHire

Dean Swanson is a SCORE Certified Volunteer Mentor and past SCORE Chapter President, District Director and Regional Vice President for the Northwest Region.

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