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ENExample situation: Bid for a Tender That Would Double Revenue
Imagine a tender you cannot afford to ignore.
Question
“We are a profitable manufacturer with about 60 employees and EUR 6 million in annual revenue. We can bid on a three-year tender worth around EUR 4.5 million per year, which would almost double our revenue, but it would require about EUR 900,000 in new equipment, hiring around 25 people, accepting 60-day payment terms and strict penalties for late delivery. Should we bid?”
What to question
Could the company survive the first six months of the contract if delivery penalties are triggered and the buyer pays only after 60 days? What happens to the new equipment and 25 new employees when the contract ends after three years? Would bidding for one lot or with a partner capture most of the benefit with a fraction of the risk?
How the depth changes
Focused → broader → deepest
Four perspectives quickly separate the size of the opportunity from the capacity to deliver it: whether current production, management and quality…
Five additional perspectives challenge the assumption that winning is automatically good news, model a downside where equipment arrives late, new…
Six further perspectives stress-test the financing structure, including the bank lines, leasing and guarantees needed to cover the cash-flow gap,…
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