Perhaps even more than the lure of money, optimism dominates the entrepreneurial mind. Whether it’s well-grounded or not, every business enterprise is fueled by it.
“During the Great Recession, more Americans have become entrepreneurs than at any time in the past 15 years,” states the Kauffman Index of Entrepreneurial Activity. Even with the nation’s economy in a persistent slump, more individuals opted for business ownership.
As history tells us, many of these fledgling enterprises will fail. Yet, even taking the step to “go out on your own” is an act of incredible optimism, particularly since others often talk about “going into business” but never act.
It shouldn’t be surprising that any talk about a downside is intolerable to the entrepreneurial spirit. Optimism trumps all challenges, including recessions.
While a positive attitude is essential in business, ignoring the downside can spell trouble and even worse – and the best way to avoid crises is to head them off before they take their toll.
Even more to the point, failing to think about the unthinkable is not a plan. Halloween, as we all know, has become the nation’s second biggest holiday event. In 2011, the Massachusetts-based 54-store retailer, iParty, was more than ready, having rented extra space in malls. Then came a major storm that wrecked sales.
Having gone through this devastating experience, it was somewhat surprising that the retailer was not better prepared for Halloween 2012 when hurricane Sandy wiped out sales. Although management evidently considered buying business interruption insurance, it dropped the idea due to the cost, as reported by The Boston Business Journal. CEO Sal Perisano said they “hoped lightning would not strike twice.” The company’s future remains in question.
Thinking The Unthinkable
One of the best ways to think about the unthinkable is to ask “what if” questions. Here are a few worth considering.
What if we outlive our value? It can and does happen. Even though we see it in other enterprises, we have great difficulty in recognizing it in ourselves. While a “nothing can stop us” attitude is both commendable and useful, it’s easy for companies to blind themselves to a creeping loss of relevance.
It’s prudent that every business ask, “What should we do to make sure we never outlive our value?”
What if we drag our feet with technology? It seems as if the vast majority of small- to medium-sized businesses are close to clueless about their customers. They act as if customer data is unrelated to their success, let alone their continued existence. Even though they may accumulate customer data, they’re totally ignorant of how to take advantage of it and leverage technology to better target customer preferences, buying cycle stage and sales opportunities. In effect, they send an unavoidable message: “We don’t care about our customers.”
What if a new competitor moves in on us? Between believing “nothing can stop us” and failing to probe the competitive landscape, it’s easy to be blindsided, to wake up one morning and say, “We have a problem.”
Staying on the offensive is critical, but having a defensive strategy is equally important.
What if we lose a major supplier? You may think certain vendors love you. But just remember: “Love is blind.” Far too often, businesses see what they want to see – and then it’s too late. Nothing is forever, so make sure your options are always lined up.
What if a key person leaves? Count on it because it always happens. It will be the one who’s “indispensable,” the one “we can’t do without.” But that actually may be the person who specializes in maintaining the status quo, who impedes change, who makes it difficult for the business to make the right moves.
When the indispensable person makes an exit, the door of opportunity opens wide.
What if we have a serious problem that impacts our customers? Plan on it. It will occur. That’s why having a plan ready is absolutely necessary. And, by the way, denial is not a plan, neither is trying to put a “spin” on it or hiding from the media – “no comment” doesn’t make the cut.
What if your largest customer leaves? It may be closing its doors, being sold or moving to a new vendor. Whatever the cause, it can instantly raise doubts among employees who fear for their jobs. The effects often extend to customers and other business relationships.
Many businesses seem to rely on keeping their fingers crossed when it comes to the unthinkable rather than asking themselves a serious question: What steps should we be taking to mitigate the effects of losing a large customer?
While every business is faced with overcoming challenges, avoiding unnecessary damage is more than worth the effort to think about the unthinkable. Ironically, focusing on the “what if” questions may be the path to getting over the hurdles and reaching your company’s objective.
John R. Graham of GrahamComm is a marketing and sales consultant and business writer. He publishes a monthly eNewsletter, “No Nonsense Marketing & Sales.” Email: johnrg31@me.com
