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Saturday, November 01, 2008

The Renovators Guide

What should you do when you are presented with an apparently tempting business opportunity which doesn't fit within your business plan? Do you forget your plan and grab the opportunity, or do you say "no thanks" and walk away? In some cases, you'll find the answer is bluntly straightforward -- it doesn't match your markets, skills and resources, and you really don't expect to make any money on it. Then it is easy to say 'no'.

But sometimes situations are more complex, and we had just that challenge a couple of months ago when I learned that the Greater Ottawa Home Builders' Association Renovators Council wanted a new Renovators Guide for the public in time for the annual January renovators' show here.

As contract publishers of the associations' internal newsletter for close to two decades, we clearly know the people there, and are knowledgeable and experienced in print advertising. But this is a consumer-focused publication, not a business-to-business publication serving the construction industry, our mandate and focus. In other words, while many of our clients would be interested in the Renovators' Guide, and we had a logical inside track on winning the contract, I needed to decide (quickly) whether we should pursue it.

In making this sort of decision, you should remember one of the simple rules of PCL Construction founder Ernie Poole: "Don't have sidelines." But is this initiative a sideline?

I decided the right way to handle this opportunity would be to set it outside my existing business and so called designer Gordon Keith, who I knew from years within the GOHBA as a competent retail focused designer and marketer. He instantly suggested a third partner, Brian Warren, who has published primarily retail magazines and special projects for years within Ottawa.

We had a meeting and I provided some information about the project and why I thought we had a very good chance of winning the bid, and decided on a three-way-joint venture. Gordon will co-ordinate design and editorial, Brian sales, and I will oversee client (GOHBA) relationships and administer the accounting and billing. The result: Our business is not strained; sales staff are not diverted and editorial and production resources are not forced to absorb an unplanned publication (but our administrative staff will have an increased workload, to some extent, in handling the back-end accounting and paperwork for the project).

Is this a wise decision? In deciding to move forward with the joint venture, I looked at the potential -- the profitable opportunities that could be extended from this simple initiative -- but I also considered the risks; without a place in our business plan, the project could truly disrupt and damage the business cohesion and focus if we pushed forward internally, or, for that matter, extended this initiative too rapidly. But right now, the decision seems right -- if it is an opportunity not in the plan, and it isn't a wild-goose-chase sideline, the best answer, indeed, may be to segregate it and put it into a new business.

Have you ever had these types of choices/decisions? How did you handle them?

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