Opportunity losses increase as we do more

How many times do you here business people say – “I don’t have enough time to do what I should be doing because of all the paper work” or “I’m not going to delegate that task because no one else does it as well as I can” or “I can’t afford to hire additional help”?

These are all common business issues and ones that managers grapple with daily, but in doing so they are all ignoring the economic theory of comparative advantage which talks about focusing on doing what brings the highest returns rather than what you are good at.

You may be extremely good at sales and very good at office admin, but are you maximising your business potential by doing both? In general the answer is no; if you’re not out selling you’re not building revenues and if your out selling the organisation will start to creek. So decide which activity you should be doing to maximise returns and bring in someone to do the other task.

I used to travel to India a lot on business and was always intrigued to see this theory adopted to the nth degree; irrespective of social standing or wealth everyone seemed to have some form of helper. The theory behind this was very simple; by spending time generating income individuals could afford to hire someone to do those tasks that if they did them would stop them maximising their potential to earn money.

This is such a simple theory yet it is so often ignored.

The knock on effect of ignoring this theory is people work long hours trying to do everything, and because time is limited, performance suffers, errors creep in and everything grinds to a halt.

The first reaction to the suggestion that someone should be hired to fill a particular role is “we can’t afford it” rather than what opportunities will an extra hire create. By seeing the possibilities the decision making criteria becomes revenue versus cost rather than just cost. The opportunity loss may be greater not hiring someone than making the hire.

Businesses don’t have to hire additional staff to be in line with this theory; they can outsource tasks to specialists in those areas so they can focus on core competencies and maximising returns. Business consultants such as ourselves can help by working with the business to understand the business drivers that will lead to increased returns and assist in identifying and implementing solutions to meet this objective.

The important piece is to recognise the trade off between managed costs, opportunity losses and growth.

Businesses will not grow without resources growing. We can’t do everything, so focus on the best course of action to increase returns, trust in others and see both sides of the P&L equation.

All opportunities require action

When ever you read a business plan the business opportunities available are always set out to justify the reason for establishing the business or taking a particular course of action. However, after a conversation recently with a client about a lost opportunity, I started to question how often business opportunities are challenged to ensure they are achievable and, more importantly, to make sure they are complete.

In this particular case the client was bemoaning the fact that they had been approached by a national retailer to provide a large quantity of tulips, something for which they had an extremely good reputation but in this case the volumes where just too much for them. Not only couldn’t they supply the volume, if they had tried other customers would have suffered. The problem was more acute because of the seasonal nature of production and the fact that you can not just increase or decrease production of tulips. Also, the risk of over production on the off chance of a large order was too great.

What does this lost opportunity tell us? In the first instance it was the right decision not to take the order as the knock on effect to existing customers would have been detrimental to future business; but on the other side of the coin the prospective customer is now unlikely to make further enquiries as they will perceive that our client can not deal with large orders.

This lost opportunity highlights the challenges businesses have in identifying business opportunities and managing limited resources to achieve those opportunities and grow the business. In my client’s situation the opportunity of supplying a large national retailer had not even occurred to them; they were content to work within the local area supplying high quality product to local retailers.

But would they have acted differently if this opportunity had been identified? The answer would have been; it depends. It depends on what the objectives of the business are and whether following this opportunity would have been in line with those objectives.

If the objective is to remain a local supplier of high quality tulips with no desire to expand outside that remit then even if the national retailer made the approach my client could turn them down happy in the knowledge that they had recognised the opportunity but made an informed decision not to enter that sector of the market.

However, if the objective is to expand the business outside the local area and the opportunity to supply a national retailer was identified a strategy is required to reduce the risk of over production yet be able to fulfil the order should it come. My client could not have afforded to run the risk of increasing production without a firm order, but they had no other strategy to fill the order if it materialised.

They could have approached other growers to see if they could help fill the order if it came. This way they could have satisfied the order, started to build a relationship with the buyer and share the revenue with other suppliers. Next year they could increase production and share less with other and therefore start to meet the objective of growing the business.

Capture all opportunities as they arise irrespective of where you are in the business cycle or development plan. If following the opportunity is in line with business objectives plan the next stage. If following the opportunity detracts from business goals either challenge and restate the goals, or set aside the opportunity. It is only a lost opportunity if no action is taken.

Work experience opportunities to enhance your future

Responding to the growing number of talented young graduates looking to secure employment; we are offering unpaid internship placements of between 3-6 months with local businesses and employers.

Successful applicants will be trained and supported in their placement, offered on-the-job training and mentoring opportunities with senior managers. Experience can be gained working within the voluntary and community sector, a private company or with a public sector agency.

ARE YOU ?

• A graduate living in the Sevenoaks district? If you live outside Sevenoaks, you can still apply as long as you are prepared to work for an organisation in the Sevenoaks district.
• Wanting to improve your employability and career prospects?
• Wanting to gain new skills and access training?

Getting an internship is one way of building on the skills you gained at university. It can also give you real life work experience, let you try your hand at a possible career, and prove yourself to a potential employer.

We are working with local businesses and employers to identify and develop internships that represent genuine work experience opportunities to enhance your future prospects.

For full details contact Liz James, Development Officer on: 01732 454785 / 01892 530330 or email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Original Article

RE-Computer Recycling is the preferred collector/recycler for many of the largest PLCs in the UK, ensuring compliant clearing of their IT equipment. RE-Computer Recycling offers a one-stop, secure collection and disposal service.

 

International Aid

RE-Computer Recycling are able to refurbish up to 85% of all equipment collected. The majority of this is supplied to Computer Aid International for use in emerging African nations or will be sold, at a reasonable cost, to other charities and community projects and people on low incomes.

Equipment that is too old or damaged to be refurbished is dismantled and the various parts and materials are recycled via accredited companies.

All equipment is collected by RE-Computer Recycling from across the South East. Collections are regularly made at businesses, schools and hospitals, as well as from the general public in accordance with the WEEE directive. RE-Computer Recycling issues Duty of Care notices upon completion of every collection.

RE-Computer Recycling is a not-for-profit organisation with any surplus income being used to support the RE-Computer Recycling project and other voluntary projects operated by Voluntary Action Within Kent.

Helping the Community

Our aim is to help people who are unemployed and continue to have difficulties in gaining employment. This may be due to having been out of work for many years due to health problems, mental or physical disabilities, social problems and/or people who will not be able to work fulltime again due to injuries they have suffered in accidents.

RE-Computer Recycling is about putting people first, looking at what skill sets they have, what their aspirations are and what work they want to do. If we employ, or place someone doing what they enjoy, then a much higher percentage will stay long term or gain new paid employment.

For more information visit:

www.re-computer.co.uk Online shop: www.re-computer.co.uk/shop

Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

10B Revenge Road, Lordswood, Chatham, Kent, ME5 8UD

Telephone: 01634 684271

Vanquish  Developments offers businesses and individuals the opportunity to be part of our unique overseas developments through investment, joint venturing  on the construction and development of key facilities or business set-up and expansion to serve the local economy.

In Egypt, our  key project is the build of a marina and motor sport development at Palo Verde, about two hours’ west of Cairo on the Sinai coast of the Red Sea.  The development is more than a resort in that it will house educational facilities  associated with the motor sport activities. We have been working in Egypt for many years now and our team and partners based in Egypt work with British companies looking to expand into this exciting, growth market.

In Britain we are the major supporter of Motorsport Endeavour, the charity which creates driving experiences for wounded services personnel and veterans as well as disabled youngsters.  V1 Motorsport Endeavour,  created at the request of the British armed forces is the touring go-karting championship for active service personnel and will create employment for veterans as well as raising money through corporate sponsorship for Motorsport Endeavour, Combat Stress and other motor sport related charities.

Sarah’s background is based in the pharmaceutical and medical industry where she progressed to  management level working with Abbott Laboratories’ and the UK’s National Health Service. Over the past 10 years, Sarah has been actively involved in property management and development. Taking on overseas projects, Sarah has overseen a development in Hurghada on the Red Sea Riviera in Egypt and has managed and worked locally there for a number of years.

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