What are the indicators that we might be focusing on the wrong opportunity, or we might be putting too much effort in chasing opportunities? As we try to grow our own businesses, sometimes we put too much effort and resources into accounts / clients that might never be able to give us ROI. It is essential to balance the desire to make a positive impact in the business with the practical considerations of running a business, particularly for a small company.

Here are some indicators that the cost of opportunity may be too high:

Limited Financial Sustainability 

If the brand constantly struggles financially due to working exclusively with smaller accounts, it might impact its own sustainability. There must be a balance to ensure the brand can cover its costs and invest in its growth. 

Resource Strain 

If working with numerous small accounts spreads the company’s resources too thin, it could lead to inefficiencies. This includes time spent on administrative tasks, project management, and client communication. An overextended team may struggle to deliver high-quality services. 

Inability to Invest in Growth 

A Brand needs resources for ongoing learning, technology upgrades, and business development. If the focus on smaller clients hinders the brand's ability to invest in its own growth, it might limit its capacity to provide better services in the long run. 

Opportunity Cost 

Every hour spent working with a client is an opportunity cost. If the Brand is devoting significant time to smaller clients at the expense of pursuing larger or more strategic opportunities, it may be missing out on growth potential. 

Struggling to Demonstrate Value 

If the Brand finds it challenging to demonstrate the value it provides to smaller accounts, it may be an indication that the fit is not optimal. Clear communication of the Brands's value proposition is crucial for building long-term relationships. 

Client Dependency Issues 

Relying too heavily on a few accounts may create dependency issues. If one or a few clients account for a substantial portion of the Brand’s revenue, their financial stability can significantly impact the Brand. 

To navigate these challenges, Beyond Business recommends you consider the following strategies:

Diversification

Seek a balance between working with smaller accounts and pursuing larger, more stable clients to create a diversified client portfolio. 

Strategic Partnerships

We shouldn’t think that this only applies to opening accounts that are a good fit for our business. Explore partnerships or collaborations with other brands or organizations to pool resources and tackle larger projects that can help build brand awareness. For example, you can have quarterly meetings with other brands in the industry to learn from each other, learn about key accounts and create strategies together.  

Clear Offerings

Clearly define and communicate the brand’s offerings. Too much variety or trying to be a good fit for everyone leads to confusion. Do you offer too many products? Do you have different products that deliver the same benefits? Understanding how your selection could confuse the customer is key. As painful as it feels to have to discontinue items, evaluating the resources it takes to have more variety needs to be considered in every strategic plan. SKU Rationalization is important! 

Financial Planning

Implement sound financial planning to ensure the company can cover its operational costs, invest in growth, and weather unforeseen challenges. In today’s ever-changing environment where the cost of doing business with accounts keeps rising, it’s easy to lose profitability. What do you do when your profitability is below the company’s expectations? How do you decide if this is a partnership you should sustain? Understand the value the account brings to your brand, sometimes they are not as profitable as you would expect (don’t lose money), but they add value and recognition to your brand that you can leverage to grow in the channel. 

Regular Evaluation

Periodically assess your account portfolio to ensure it aligns with your mission and business goals. Check for profitability!  

Ultimately, the cost of opportunity becomes too high when the company's ability to sustain itself, grow, and fulfill its mission is compromised. Striking a balance that allows the brand to make a positive impact while ensuring its own sustainability is key.

How can Beyond Business help?

We can review your portfolio, discuss industry standards, expectations and help you make decisions that many times feel difficult or overwhelming. We can help you create or review your channel strategy and create priorities. We can also help you reallocate resources within other departments, to support the sales that your business needs.

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