It happens all the time. During a weekly (or daily) meeting, someone brings up something "interesting" he saw online or read about in the Harvard Business Review. "Maybe we should try it."
Sometimes one of these spontaneous ideas turns out to be an outburst of genius. It may solve an existing problem efficiently and economically. Or maybe it offers a new way to engage your customers. Other times, though, the excitement of something new leads us in pursuit of time-consuming and costly projects that don’t deliver.
There's no doubt that today's landscape requires companies to move fast so they don't get left behind. But it's also important to be prudent about where you spend your resources. More often than not, the "shiny and new" feature that cost tens of thousands of dollars to build will become obsolete even before launch.
Fortunately, there are four simple ways to evaluate whether a long-term, resource intensive project is really going to be valuable when it's done.
1. Time is money
For every business, time is a cost. There may be opportunities that need to be passed on simply because you don't have the luxury of time. If your cash is going to run out in three months, but the project you want to take on is going to take five months, it doesn't matter how great the idea it is—your company won't be standing by the time it's done. It's not just about whether you can afford to spend the money; you have to consider whether you can afford to spend the time.
2. Count the opportunity cost
The hard costs required to complete a project are easily inputted into a spreadsheet. You can calculate how much new employees or freelancers will cost, as well as the tools needed and other resources required. What's more difficult to calculate (and often overlooked), is the opportunity cost. What are you giving up to pursue this project? Can you be building your company in other, better ways? What resources will be diverted from other areas to support this new feature or service? There are usually many options from which a business can choose for growth. Is this the very best one?
3. Review your priorities
Small businesses rarely have the resources to do absolutely everything they could do to grow revenues and expand their reach. This is where priorities come into play.
Pursue projects that are in line with priorities and high-target goals. Don't get sucked into a sales pitch from the guy who's selling a large package of goodies that are just neat to have. Are there other things you can do that will more effectively meet your most important goals?
4. Don't listen to the squeaky wheel
It's easy to get distracted by a new complaint or an inconsequential but "loud" bug. What's top of mind can quickly become an all-consuming project that no one really cares about.
Whenever a new problem becomes apparent, discuss it with the team, but remember to place it in the queue where it belongs. If it's a blaring bug that demands prompt attention, that's fine. But if it's not, let it go for now and get back to it when it's time.
Keeping resources focused on your high-target, high-yield goals will produce the results your business needs. Stay away from the traps of pursuing projects that cost more than they're worth.