One of the factors that often makes the difference between success and failure in an enterprise, whether it is in business or personal exploits, is the failure at the beginning of a task to define what the end of the task is. Many times in the area of business I have seen what should have been a profitable job become an unprofitable job because the job end-point was not well defined. For example, in building contracting it is extremely important to define in detail what constitutes the end of the job and that anything done after that is extra work for extra pay. Many a contract has become unprofitable when the customer continues to ask for changes, corrections, and “fixes” that were not part of the original contract. Sometimes this is because the contract was never put into writing or the written contract was not detailed enough.
This same problem exists in the service industries too where often there is no written contract or where the service sought is ill defined. Sometimes we may know what the customer wants but don’t know what is going to be needed to reach the goal. In these cases it is just as important to think ahead and at least try to put some pauses in the work to allow the parties to assess what has been done so far and what may still be needed to reach the goal. It is much better to risk having the customer stop the project at one of these pauses than to incur more costs and have a dispute later about getting paid.
We all have probably seen this concept when someone giving a speech doesn’t quite know how to end their speech. It is very embarrassing to both the speaker and the listeners. You can see the concept plainly if you make the mistake of saying “I’m going to work in the yard today” instead of “I’m going to trim that bush today”. The first statement has no defined end-point but the second statement does. So when the football game comes on you will be glad you used the statement with a definite end-point. So in all our endeavors, both business and personal, define the end before you start.
Loren McCann, CPA, MS (Tax)