Do not replace a collapsed client with work priced in panic

An empty programme creates pressure to say yes

Your biggest client collapses and the coming weeks suddenly look quiet. A new customer offers work at a sharply reduced price. Before accepting, assess whether the job improves the business's position. Replacing lost revenue with work that consumes more cash can deepen the shortage, particularly while old debts and overheads still need attention.

Cost the actual new scope

Imagine a painting contractor offered a large replacement job requiring extensive travel and unfamiliar access arrangements. Do not reuse the old client's rate simply because the work appears similar. Obtain current material and labour estimates and identify mobilisation, supervision and return visits. Explain uncertain items instead of hiding them within a hopeful margin.

Check the effect of the discount

business.gov.au's pricing guidance says discounts can affect the bottom line and should still support costs and business goals. Compare the proposed price with the full cost of delivering this particular job. Ask the accountant or adviser to review the assumptions. A busy crew and a signed contract do not establish that the work is financially useful.

Source: business.gov.au: Choose a pricing strategy

Put payment timing beside the margin

Identify when materials and labour must be paid and when the new customer is expected to pay. Keep any deposit or progress arrangement supported by the actual agreement. In the painting example, travel and setup spending may fall before the first claim. A job can appear profitable while creating a funding gap the business cannot presently cover.

Assess the customer and commitment

Check the contracting party and agreed terms before relying on the opportunity. Obtain advice about the company's wider financial position if obligations cannot be met. Do not treat acceptance of new work as an automatic solution to insolvency concerns. The decision needs to account for the business's capacity to perform and fund what it is promising.

Make the choice explicit

Record the expected contribution, cash requirement and material risks. Compare realistic alternatives with advice rather than assuming any work is better than idle time. The aim is to rebuild sustainable trading after the collapse, not to recreate the lost turnover number while adding a second project that the business cannot afford to complete.