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Don't promise what you can't deliver

by Janet Attard

The inability to fill orders is one of the leading problems that small businesses face when they try to grow. Either they can't raise money fast enough to cover all the costs of producing and distributing the products, they can't find enough employees to produce the work, or they can't do the work at all.

To minimize the problem, find out what will be involved in scaling up your production before you line up sales representatives or rent space at a trade show. Find out what quantities you'd need to purchase to get better wholesale prices, and what you'd need to do and what it would cost to secure the financing if you have to ramp up in a hurry. Check with employment agencies and talk to others in local business organizations to find out how much difficulty you are likely to have finding employees in the skill and salary range you will need.

A counselor at a local SCORE or Small Business Development Center should be able to help you work up the numbers and alert you to potential funding sources that may be available.

Remember, if you sign a contract to do a job or deliver a product by a certain date, you are legally bound to live up to the terms of that contract. If you don't you could be sued and either asked to pay the cost of having someone else complete the job, or sued for damages such as lost income due to your negligence. Depending on how your business is operated, you could lose not only your business, but your home and any other assets. So, be sure you really can do what you say before you sign that contract.

More: The Problem with Growth

Posted by Janet on March 12, 2008 at 10:16 AM | Comments (0)

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