Should You Take That Opportunity? What the Numbers Reveal

Introduction - Should You Take That Opportunity

Every construction and engineering business faces moments when a new opportunity looks too good to miss, whether it’s a large contract, a joint venture, or expanding into a new sector.

The temptation is to say “yes” quickly, driven by ambition and the potential for growth. But here’s the reality: without checking the numbers, opportunities can turn into liabilities. Extra work can stretch cash flow, eat into margins, and expose the business to risks you didn’t anticipate.

At Jones Financial Accounts (JFA), we help SMEs make smarter choices by putting financial evidence behind big decisions. In this blog, we’ll break down what to review, why it matters, and how to decide confidently whether to take the leap, or walk away.

What You Need to Review

Before committing to a new opportunity, directors must look beyond the headline revenue. Three areas deserve close attention:

• Profitability – Does the contract or project deliver enough margin after labour, materials, prelims, and overheads? A £1m job at 5% margin is less attractive than a £500k job at 15%.

  
  

• Cash flow impact – Construction projects often involve delayed stage payments and retention. Can your business fund labour and materials until cash comes in? If not, the project could starve your business of working capital.

  
  

• Capacity and resources – Do you have the staff, subcontractors, and equipment to deliver without overstretching? Taking on too much too quickly risks delivery delays and reputational damage.

  
  

Reviewing these areas ensures that decisions are based on sustainable growth, not just immediate excitement. A clear-eyed assessment of numbers helps leadership understand if an opportunity will strengthen the business, or weaken i

Why It Matters for Businesses

One construction firm accepted a £3m project that promised big revenues. But they failed to forecast cash flow. Delayed stage payments left them £400k short within three months. They struggled to pay suppliers, subcontractors downed tools, and the business faced reputational damage.

Contrast that with another firm who evaluated carefully. They turned down a low-margin contract but pursued smaller projects where they could guarantee stronger cash flow. Over two years, they improved profitability, built cash reserves, and expanded steadily without overstretching.

The lesson is simple: ignoring the financial reality behind an opportunity risks more than profit. It affects staff morale, client relationships, and your ability to deliver future projects. Taking the time to assess properly ensures that growth decisions enhance stability instead of threatening survival.

Strategy to Get It Right

To make confident decisions, construction businesses should take these steps:

1. Run a margin analysis – Compare the forecast profit against fixed overheads and expected risks. Is the reward worth the effort?

   
   

2. Build a cash flow forecast – Map project inflows and outflows. If stage payments are delayed, do you have enough cash buffer to cover wages and suppliers?

   
   

3. Check capacity – Align the opportunity with your current workforce and subcontractor availability. If hiring is required, include the cost and lead time in your forecast.

   
   

4. Stress test the numbers – Model worst-case scenarios: what if payment is delayed, costs rise 10%, or a subcontractor drops out? Can the business still cope?

   
   

5. Set clear decision thresholds – Define in advance what level of margin, risk, or cash commitment your business is comfortable with.

   
   

This process turns gut instinct into evidence-based decision-making. The right opportunity should fit both your strategic goals and financial capacity, not just your ambition.

5. Common Mistakes (with Consequences)

• Chasing revenue, not profit – High turnover with low margins drains resources and delivers little return.

  
  

• Ignoring cash flow timing – Winning a project but running out of cash mid-way can cripple operations.

  
  

• Overstretching resources – Accepting work without the capacity to deliver damages reputation and risks contract penalties.

  
  

• No risk planning – Without stress testing, even small problems can escalate into major financial setbacks.

  
  

• Relying on gut feel – Skipping financial analysis leads to costly, avoidable mistakes.

Each mistake carries operational, reputational, and financial consequences, often more damaging than walking away from the deal.

Misconceptions

• “Big projects always mean bigger profit.” Not true, large contracts often come with tighter margins, longer payment cycles, and higher risk.

  
  

• “Cash will sort itself out.” It won’t. Without forecasting, delays in payments can derail even profitable projects.

  
  

• “We can always find more labour.” In reality, labour shortages and subcontractor availability can limit delivery capacity and add unexpected costs.

  
  

Why Professional Support Pays Off

At JFA, we help construction and engineering businesses replace guesswork with clarity. We build project forecasts, run scenario analysis, and integrate opportunities into your wider financial strategy. This ensures directors know whether an opportunity strengthens cash flow, boosts profitability, or risks overstretching the company.

Our role is more than compliance, it’s about helping leadership teams make confident, evidence-based decisions. With JFA’s support, businesses can focus on winning the right contracts, not just any contracts. That means stronger margins, better cash flow, and growth that’s sustainable in the long term.

Key Takeaways

• Don’t judge opportunities by revenue alone, review profitability, cash flow, and capacity.

• Done right, opportunities fuel growth; done wrong, they create risk and financial stress.

• Use forecasting and stress testing to make evidence-based decisions.

• Professional support ensures you say “yes” only when the numbers agree.

Wrapping up today's insights, tomorrow we simplify another accounting challenge