The Worst Advice I Ever Took: ‘Go After Big Contracts,’ Says CEO Amber S. Hawkins
February 7, 2013 in Entrepreneurs, Female Business Owners, Lessons Learned, Q&A, Women Entrepreneurs, Worst Advice
Tons of interviews out there are Q&A’s with wise women who share words of wisdom from mentors that helped them start their businesses. This isn’t one of those. This post is part of a series of profiles in which female entrepreneurs reveal the advice they regret taking. Their lessons will save you valuable time and money when launching your small business.
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Amber S. Hawkins is the President/CEO of Your Computer Needs of Toledo, LLC based in in Toledo, OH. And, last month was the eighth year she put her business motto to use “Computer Training & MORE That Comes To You!” But, success didn’t come so easily to her at first. Here’s her story.
“Though surviving and getting past failure is part of entrepreneurship, Hawkins would advise those starting their businesses NOT to go after big contracts at first –as opposed the to nuggets of knowledge she received when she started –unless you’re well equipped to do so:
“I would suggest the four following things when it comes to handling big contracts before you leap,” says Hawkins.
- In your network of small business owners, find out the answers to the below questions from those that were awarded big contracts. What were the ins and outs? What were the requirements? Were they the type of contracts in which you weren’t paid until the job is complete? What was the time cycle as far as getting paid, and what problems were encountered? These are just some of the questions that should be asked BEFORE thinking about going after a big contract.
- Find out everything about any bids including if the business has to be bonded, certified and other credentials required.
- Though you may have work experience in the field of the small business you’re in, make sure you’re ready. The small business world frowns upon unsatisfactorily completing the terms of the contract and a bad reputation spreads fast from the contract source. It’s great if you’re a “newbie” and they understand. Unfortunately, nine times out of 10 that’s not the case.
- Completion of successful smaller contracts can be your ally. Believe it or not, contract sources do talk to each other. The question you then need to answer as a woman entrepreneur is: will the contract sources talk highly of me or will they talk badly about me?”
Any questions for these ladies? Post them below or share with the rest of the ProfessionGal community on Facebook!
Very good perspective. I have another take on big versus small contracts as well. It’s been my experience that larger contracts come from larger companies, and the overhead of dealing with larger companies can be daunting, if not downright untenable. Sales cycles take longer, they have more draconian contract compliance requirements, and they’re often predisposed to work with established vendors or large suppliers from the get-go. If you focus on smaller companies and smaller contracts, it’s much easier to hone your sales and delivery processes, establish more meaningful/personal relationships with decision makers, and leverage these opportunities as you move forward.
Thanks for reading and leaving a comment, Roger! Great tack-on points to this piece. The worst thing to do when starting out is to bite off more than you can chew, leaving a bad mark on your record with clients right out of the gate. What do you consider a benchmark to measure that can show entrepreneurs that they are now ready to pitch for larger contracts?
The benchmark I’ve always used is relating to scaling the business model. Hopefully, as a new business owner starts out, she/he is insanely focused on the existing contracts, making sure that all the details are covered and that the customer relationship is maintained at a high level. This means one is investing extra blood, sweat, and tears in the “as-is”, before jumping feet first into getting more business. While doing this, the entrepreneur ought to be building repeatable and scalable processes that can be applied to the next contact, and then the next, and then on to larger ones. What this means is avoiding the situation where the entrepreneur must be personally involved in every nuance of the existing customer relationships, making sure that other staff members are “plug-and-play” from the customer’s perspective, and that there is capacity to take on new business without missing a beat, and most importantly without taking away from existing contracts. The questions I would ask regarding larger contracts are:
1. Do you have the capacity to take on new business and maintain your as-is business?
2. Are your processes scalable? Can you leverage repeatable processes that you have already developed, or are you building a brand new delivery model for the next customer? [The smart business owner will always endeavor to benefit from economies of scale derived from existing customers, whether it's just a simple process, or something more concrete like business automation, or intellectual property.]
3. Have you projected the impact to your business if you win a larger contract — all the intangibles like business insurance (general liability, professional liability, workers comp, other business taxes, etc). Does winning a larger contract change the nature of your relationship with existing customers? [Not all customers will be happy to hear you've won a huge contract, as they will correctly surmise that you will be less available to them.]
My overall advice – slow and steady wins the race. Too often people enter the “race” with the belief that it needs to be a sprint to the finish line. In my view, the most successful business owners are the ones that take a long-term view of growing a business.