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Business Development – Questions That An Engineering Consultant / Contractors Needs To Answer

There are many engineering consultants / contractors in the field of Chemical Process industry which may further be sub-divided into Oil & Gas, Refining, Petrochemicals, Fine Chemicals, Water Resource Management etc. Most of these consultants / contractors have a Business Development (BD) cell whose job is basically get business or in other words projects for the company. But, is getting business based purely on earning revenue and profit for the company the sole objective of the Business Development Manager? In my opinion, it certainly is not. Unfortunately the current scenario relates to a tunnel vision from the BD guys wherein the sole objective is to engage in business solely for revenue generation and profit. Some introspection needs to be done by the BD guys to encompass all aspects of doing business which is not only beneficial to their employer but benefits the client as well as the whole society and the environment. Revenue and profit are just one small part of the whole idea of developing a business.

The introspection that I have mentioned above could be in the form of having a questionnaire that needs to be filled in by the BD person before presenting it to the management for approval and acceptance. Most reputed engineering consultants / contractors have such a questionnaire available as part of their system to assess whether the business opportunity is viable from all aspects or not.

Most of these questions relate to nothing but common sense and do not require any special learning or knowledge. I am listing down some of these questions based on my understanding and in context to the chemical process industry. All the questions are in a narrative style for sake of clarity and not in any legal or contractual language. None of the questions mentioned below are in any sequence or any order of importance. All of them are equally important in my opinion. However, individual companies may assign a sequence or order of importance based on their short-term or long-term business objectives.

Here it goes:

Q.1 Is the project commercially and financially viable?

Commercial and financial viability does not mean only to the board members and shareholders of the company. Broadly defined, does it benefit all concerned? The all concerned for example would include the land owners whose land is being acquired for the project. Are they being given a fair share of the benefits of the project or is it likely that they become litigants in a prolonged battle in a court of law due to the contentious issue of land acquisition.

Q.2 What is the reputation of the promoter or group of promoters of the project?

Is the project promoter a responsible corporate entity? Is there a background check on who is promoting the project? Are there any civil or criminal proceedings going on against the promoter? Does the promoter have the confidence of reputed financial lending institutions for raising capital for the project?

Q.3 Does the promoter have any prior experience of executing a project similar to the proposed one?
If yes, then what is the current state of the executed project? Is it a success or a failure for any reason whatsoever?

Q.4 What is the safety and environmental record of the previous project? Does the promoter value safety and environmental protection? Are any legal proceedings going on against the promoter for violation of safety and environmental laws and codes for their existing plant / project?

Q.5 What are the clauses for punitive damages (penalties) in the project tender or contract?
Do these clauses violate the business model adopted by the engineering consultant / contractor? Are they legal with respect to the law of the land? Are they fair or unfair from the moral viewpoint? Does the engineering consultant / contractor have the capacity to absorb the penalties due to unforeseen circumstances?

Q.6 Am I (engineering contractor / consultant) capable to execute the size and type of project as described in the project tender?
Do I have the resources such as skilled manpower, software, knowledge and past experience to perform a satisfactory job? If I don't have existing resources, am I willing to deploy necessary resources in order to bag and execute the project to the utmost satisfaction of the client?

Q.7 Am I looking at the project from the short term view of revenue and profit generation only or my goal is to establish my reputation as a reliable and dependable partner in engineering and project management over the long run?

Q.8 Am I willing to forego or walk out of the project if I am asked to participate in or ignore unethical business practices such as bribery, pay-offs and any other illegal practices which violate local and international laws? Do I have the capacity to say NO to the client for indulging in corrupt and illegal practices?

Q.9 Have I made efforts to diversify my engineering portfolio so that I am not dependent on a single or limited source of business?

Q.10 Am I going to make money (revenue and profit) from the project to sustain my survival and growth?
Do my overheads and expenses allow me to take up any kind of project or do I need to restrict myself to projects with a certain minimum project value? For example, for some large engineering companies a minimum project value of USD 100 million only can ensure profitability.

There could be even more questions that require attention by the BD guys before undertaking any business venture. Readers may suggest more questions that need to be scrutinized before attempting to conclude a business deal.

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