On paper, the FEI World Equestrian Games™ is a fantastic concept. It’s a true celebration of horse sport with all FEI disciplines united under ‘one roof. The only problem: It’s expensive and a logistical nightmare. What makes its beauty, also makes its downfall.
One event hosting eight World Championships at once, featuring the best in show jumping, dressage and para-equestrian dressage, eventing, driving, endurance, vaulting and reining might be too much for the return it generates. And as a result, no organizer seems to want to host the next Games. The 2018 WEG already faced adversity when Bromont pulled out for lack of funding, and they were taken on by Tryon with mixed results. The FEI opened the bidding process to host the 2022 Games twice, without any takers. It hasn’t closed the door on the Games but it will open bids for individual world championships instead. It’s a less sexy option, but a pragmatic one. And in business, common sense is key.
Here are some business lessons we can learn from the decision to ‘drop’ the WEG:
1. Where’s the beef?
Big, cool projects are fun – you really, really want to do them – but sometimes, you don’t make any money with them. “Yes, but it’s good for PR!” you may say. Not necessarily. In business, you need to generate a profit. The higher the risk, the higher the reward needs to be. If the cost outweighs the benefits, you shouldn’t do it. It’s simple ROI (return on investment).
2. What else could you have been doing instead?
The decision is not simply A/B, doing it or not. Always consider the C option. Would it have been more profitable to do something else? Could you have served 50 smaller clients in that time and made twice the amount? If you take on big clients and projects, you need to be able to extract more value that compensates for your investment in time and effort.
3. Bite off what you can chew.
It might be an amazing opportunity and profitable, but can you do it well? Disappointing a big client because you just couldn’t deliver can be worse than not doing it at all. It can set you back, so don’t try to ‘fake it til you make it’. Either give yourself the resources to do it successfully or focus on the clients you can serve well. Because you don’t just want one deal, you want the next one. Serving current clients well is how you get repeat business and referrals that lead to new opportunities. Don’t half-ass it.
4. Assume everything will go wrong.
If everything goes wrong and there’s a hurricane, what happens? Are you able to withstand the damage? Entrepreneurs sometimes look at scenarios with their rosy-colored-glasses on. You don’t want to put yourself in situations where the risk could be fatal. Do it only if you can take the loss.