We have opportunities but are low on revenue. Help!

We have a great business and many opportunities on the go but we don’t seem to turn any of these into revenue. Help.

A business I visited this week reminded me of an observation made by David Packard, the co-founder of HP. He said that a great company is more likely to die of indigestion from too much opportunity than starvation from too little.

The CEO of the company I visited – let’s call it Redco – was a little despairing. “How is it possible”, she said, “to have so many opportunities and yet finish the year in the same place as we started it?”

Redco had done so many things right. Over it’s journey from start up to established business the company had matched quality work with clever marketing and as a result attracted many opportunities.

Problems started to arise however when the sheer number of opportunities started to overwhelm the business. Redco literally pursued every opportunity that presented itself, and – as is not uncommon – the new opportunities felt a little more exciting than the existing ones and so attracted more time and energy from the employees. Consequently, at the end of 2009 the company was sitting on a mass of partially completed projects and not a single finished one.

Looking ahead at 2010 the CEO could see a crisis looming. Unless a few of the projects were actually finished and started to generate income, cashflow was going to become an issue. The business needed to make a tough decision – which projects should they run with?

And that is when the CEO realised that the business had never really adopted a process of evaluating opportunities. Because the investment required for the majority of projects was in the shape of time – overworked employees – rather than money, the magnitude of the investment was largely invisible. And because the management team couldn’t see what they were spending on the projects they didn’t think to evaluate it.

Right now Redco is madly analysing the time cost of its projects and doing return on investment calculations. So if you, like Redco, have a tendency towards a “never turn down an opportunity” mentality, then get smarter and start evaluating your opportunities. You want to say ‘no’ more than you say ‘yes’. If your business is good enough to attract lots of opportunities then you won’t starve by pursuing a few less.

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Julia Bickerstaff’s expertise is in helping businesses grow profitably. She runs two businesses: Butterfly Coaching, a small advisory firm with a unique approach to assisting SMEs with profitable growth; and The Business Bakery, which helps kitchen table tycoons build their best businesses. Julia is the author of “How to Bake a Business” and was previously a partner at Deloitte. She is a chartered accountant and has a degree in economics from The London School of Economics (London University).