In my last post, I offered some guidance on weathering business downturns, based on my experiences at HighPoint during the recession. This month, I want to move to the next phase of the cycle – stabilizing ahead of the upswing. Recessions and financial crises quickly teach you some tough lessons in business, so it’s easy to get excited once things start to turn around. But putting the business back on a steady course following a down cycle brings a host of new issues that can prove equally challenging. When I tried to get HighPoint Associates back on track after the global financial crisis, I chased too many off-target deals – projects with minimal (or no) budgets or situations where a client had an idea of what they wanted help with, but no actual mandate to act on it – only to find that they created more headaches.
It took two years for demand to finally bounce back to normal, pre-crisis levels. Looking back at that time, I learned a few things about minimizing the problems that come when you’re aggressively chasing new opportunities:
- Define project parameters up front. Instead of spending time fruitlessly chasing projects that will never go anywhere, have candid conversations with prospective customers about the likelihood they will do business with you and when. This is not a car salesman asking “So, are we gonna make a deal?” Instead, focus on asking specific questions that allow you to make a judgment call. For example:
- Tell me about the genesis of this need.
- What was the catalyst to pick up the phone and call us?
- What have you already done on this front?
- Who has worked on this issue before?
- Who is currently focused on this area?
- Is there an upcoming decision point, management or board meeting, budgeting process, deal, etc., that you are targeting?
- How are you thinking about this with regards to start date / end date.
This is a practice we now take to heart. In our internal “Monday Morning Meeting” at HighPoint, every single new opportunity is given a “probability grade” based on our initial conversations that cover the above questions. We won’t add a project into the meeting review sheet unless we’ve had a verbal exchange with the client. If someone can’t get on the phone to discuss their need, then it’s not likely an important one for them.
- Make budget a qualifier. Monetary discussions are critical to work into initial conversations as well. We ask directly what the client’s budget is. If they demur, we don’t let it drop; instead, we offer up an approximate cost based on what we’ve heard thus far. We may qualify it because we need to know more, but at least we’ve given an estimate based on our experience. We then make a point to ask if our estimate is in the range for the client’s budget. If it isn’t, no harm, no foul. No one wastes any time.
- Scope the project in real time. Separate from project parameters, we also scope the work before investing time. We often field inquires from clients that are still unclear about their end goals or haven’t fully defined their need. We might be a great fit, but it might be that they need a more specialized service such as a software development firm or an accounting firm. Having a verbal conversation helps us flesh out the issue more fully and accomplishes two things:
- It gives the client confidence that our capabilities go far beyond simply staffing a project; we take the time to think through their needs with them.
- It helps us determine if and where we can be helpful, so that we can jointly decide with the client whether to invest further time.
Chasing business while under pressure is tempting, but it can also lead to a tremendous waste of valuable time and resources. Developing a solid methodology and strategy behind the growth opportunities you pursue as you get your business back on track leads to better decision-making and better results.