The biggest mistake I was making in my first 10 years of business, is “not preparing” for business uncertainty.
I loved my business idea like my baby, so I kept feeding it without any plan. It kept getting weight, on my chest, and pulling me down until it finally failed. So, I lost all my investments in this idea.
Why it didn’t succeed?
Because I was trying to follow other successful businesses in the field, from the outside. I didn’t consider the obstacles they have faced, the factors of their success and the business uncertainty they prepared for. So, I just kept doing what they do, and fall under any small challenge I go through.
I loved my idea, but it seems that I wasn’t serious. Because I didn’t have one concept. preparing for business uncertainty.
You can’t remove uncertainty, but you can prepare for it. Simply. Because you can’t predict the future. You can only learn from history, or past experience of yours or other players in your field. But you can’t one hundred percent tell that the future is identical to the past.
So how to prepare for small business uncertainty? Strategic Planning.
Oh, that’s big.
As a small business, you may be running your company from a home based office, a small shop or even a furnished office in a nice business building, but having a few employees. You might believe that strategic planning is for big corporations, or public companies were investors have to make sure, or be certain, that your business will make them money.
No. Strategic planning is the cure of business uncertainty issue, for all business sizes.
Whether you are a small or big business, you have to plan for your company to succeed.
In other words, you have to know the best actions, or reactions, to future uncertain things that might happen.
As I mentioned earlier in other posts. My business was my passion, I loved the idea of having a business and be my own boss. So I started a business with what I do best at that time, web development and hosting.
I had no permanent team, no enough money and no plan.
I was very young and my vision was very short sighted. So, I couldn’t succeed.
I kept struggling and tuning for years in the same business, but nothing happened. Why? Because every time I start to make money or gain some momentum, I get hit with an unexpected challenge that brings me down, and then I had to start from scratch.
So, I started to read and research about this issue. Why I am unable to succeed? I was doing the same things my competitors are doing.
And the common answer was, business planning.
I hated this answer. Because like most of sole business owners, I thought why should I plan. I am the only owner, no one will judge me, and it is so silly to put a plan were only me will read.
But here is the thing. I gave it a try!
I made a business plan, based on the official long form business plan template. Actually, I bought the template online.
Then I started following the included guide until I finally wrote a plan for my business.
Once, I finished reading the whole plan, I discovered a very obvious thing. I am not able to estimate the future. There is no real preparation for uncertainty. I don’t really understand the market. And I don’t have the resources to succeed. So, the plan showed me one thing that I became certain about. This business idea has to fail!
Since then I started to embrace strategic planning. Simply because it could save me 10 years of struggling and a ton of hard-earned money that I got from my day job and wasted on my failing business idea.
“There is a huge difference between persistence and stubbornness.”
On my second business, I wanted a more efficient strategic planning approach. So, I used The Lean Plan, by Tim Berry.
With “lean” planning, my new business idea showed signs of success in the early few months of operation. I planned well, and prepared for business uncertainty, by considering most known scenarios, and setting tactics for each that lead to success.
I didn’t predict the future, but I was prepared for uncertainty.
With lean planning also, you have to review and update the plan monthly “For example”. So, by the end of the month, if changes occur that may affect your plan, you have to update the entire areas of your plan that are affected. You will then adjust for success, instead of sticking to the failing long form plan, no matter what.
A monthly update is more effective than a yearly review, which will not help fixing issues as they occur.
So, I kept tuning and updating assumptions, tactics and schedules, until I finally reached my first goals.
Now, here are a few tips to help and motivate you in planning for business uncertainty.
Because we are afraid to fail at something, we tend to postpone actions in order to delay the results. This is known as procrastination.
Procrastination is one of the main factors for failure. Because simply success is the result of taking action.
If you believe that the steps to reach your goals are too difficult to achieve, chuck them down into smaller steps, and short attainable goals. But you have to take action.
See? I keep mentioning goals and taking action. This what lean planning is all about. You can write the whole first version of the plan in a few hours, and start taking action.
I used to postpone the planning idea as I said above, because it was too time consuming and stuffed with lots of paragraphs that are unrelated to taking action.
Once I started to plan for taking action, it was so easy for me to prepare for my business uncertainty. And I wasn’t afraid to make some mistakes in my plan, because it is review-able and updatable.
Always Put An Enough Margin
I have learnt long time ago from some deadly mistakes, that putting margins is a life saver.
When you plan and prepare for your business uncertainty, you can be totally sure about many things.
For example, if you allocate one week for a certain task that you can actually complete in one week, you have to extend this time slot to ten days or , preferably if possible, two weeks.
You can’t stop unexpected circumstances from occurring, like sickness, business or personal conflicts or even a natural phenomena like hurricanes and earthquakes.
Another example is, when you set budgets for your new or current business. You have to add an extra buffer. A big change in currency exchange rate, or unexpected increase in costs of manufacturing, can be show stoppers if you tightly set your budgets.
Because unexpected things will usually happen, you will need to update your plan regularly, based on the new facts.
With lean planning, review and update are part of the process. And this is why it Is efficient.
The most recent version of my business lean plan is the most accurate one. It includes good margins, solutions for faced issues, and is minimizing uncertainty to the lowest levels.
You may say, this is not useful after the fact. However if you fail to plan, you plain to fail. Because if you plan to build a sustainable business, you should consider the future as well. You did your best on the first version of the plan. However, the most recent version is the best preparation for the future, with the highest ratio of success.
Learn from Mistakes and Document Them
Now, the most important part that most business owners overlook, is documenting the mistakes and their solutions.
You don’t want to face the same mistakes over and over, then think about the solution from scratch. Just take a look at your most recent version of the plan, and you are good to go.
Relying on your memory is not really helpful. Because your business will have lots of activities and issues to fix, you will not be able to remember every step you made to succeed.
Just take a few extra minutes to document by writing, audio or even video.
Conclusions to Prepare for Small Business Uncertainty
To sum up, one of the most important tools to help you preparing for uncertainty, is strategic planning. And this can be easily and efficiently done, using the lean plan method.
With lean planning, you can quickly start now to take action and avoid procrastination. Be realistic by putting enough time margin, and budget buffer. Keep documenting mistakes, and update any changes regularly.
There is no way to remove uncertainty, but preparing for it is your solution to success.
You can add to this topic by sharing your thoughts with us in the comments below.