Now and then, a great new opportunity appears on the horizon. Maybe it's a piece of property you've dreamed of developing as your office space; perhaps it's a great deal on a second home in the mountains; or maybe it's the presidency of the local industry association. Whatever it is, it almost always looks too good to pass up. So you begin to build the case for the new opportunity, selling it to anyone who will listen, including yourself.

But taking on any big new opportunity is highly risky. That's why I like to call it an “N.O.” for short. We like to think that an N.O. will solve the current problems we face; but, in fact, it typically compounds their effect. Often, the prudent response to an N.O. is “No,” but many business owners will pursue every N.O. to the edge of bankruptcy and maybe beyond. I can hear you asking, “If not now, when?” The answer is simple: “At the right time.”

The trick is to properly identify the “right time” by making sure it fits with both your short- and long-term strategy. Did you really plan on buying and remodeling a new office during the next three years of your company plan? Was a vacation home in the cards? Is being an association officer part of your marketing plan?

If you've honestly scored “B” or better on the questionnaire, then  it's worth spending some time investigating the new opportunity. But if  your score is lower, then say “No” for now.
If you've honestly scored “B” or better on the questionnaire, then it's worth spending some time investigating the new opportunity. But if your score is lower, then say “No” for now.

In each case, you must also consider whether or not you have developed sufficient assets to convert the N.O. into an action plan. Those assets include not just available cash, but your time and focus as well. An N.O. pulls you away from company management at the same time that it pulls cash out of your bank accounts.

A simple true-false questionnaire (left) can help you better understand if the time is right for an N.O. Any “false” answer indicates an area that needs improvement, which will require time and often some financial investment in people and systems.

If you've honestly scored “B” or better, then it's worth spending some time investigating the N.O. If after due diligence it passes muster, then slot it into your strategic and financial plans. But if your score is lower, then just say “No” for now and focus instead on those areas of your business that require immediate attention. Plan to bring your grade to at least a B so that when the next N.O. appears you'll be better able to take advantage of it. —Judith Miller is a Seattle-based construction business consultant and trainer specializing in accounting, finance, and computerization.