How to plan for the unknown
There is a lot of uncertainty around at the moment. Of course there is the political and economic uncertainty that comes with major event like Brexit, but there are also plenty of other unknowns, even at the best of times.
Markets go up and down. New technology can dramatically transform an industry, sometimes almost overnight. On a smaller scale, supply and demand often fluctuates dramatically, and the suppliers and partners we trust to deliver for us might go out of business or shift their focus elsewhere.
So where does all this uncertainty leave us as small business owners? How do we deal with these unknown risks and mitigate against them? Here are a few thoughts.
Getting to grips with risk
Clearly, as we attempt to grow our businesses, we need to do everything we can to identify what risks there are out there that might impact our business – and prepare ourselves. This might take the form of market data analysis, or a thorough review of all of the current partnerships and relationships you have with everyone from suppliers to partners. This process is all about stress testing – identifying those areas where your business is vulnerable, and those areas where it can withstand the pressures of changing circumstances. And understanding the nature of risks, the likelihood of them happening, and the potential consequences if they do, is a crucial part of this.
Prioritise and know what you can control
Once you have an idea of where the relative strengths and weaknesses of your business lie, it is now a case of getting a better idea of what the risks might turn out to be. A major event like a market crash or major technical discovery in your sector might be a great unknown, but you can probably guess at the component smaller risks that make up that event, and prepare for them. And this is the key at this stage – identifying what risks are out there that impact you, what (if anything) you can do to lessen them, and prioritising the potential risks in order to be able to better focus your efforts.
Use your small size and structure as a strength
It is often easy to look at larger organisations and imagine that they are in a far better position to deal with ‘the unknown’ than we are as small business owners and entrepreneurs. They have the operational scale and the financial security to absorb shocks, and the workforce to be able to research and analyse ahead in order to try and accurately predict what might be coming.
But we have found that often the opposite is actually the case. When changes do occur, it is the organisations that are able to react quickly and without too much difficulty that are the ones who survive. A small organisation is often better suited to coping with the ups and downs of the market because its agile way of working allows it to quickly come up with solutions to unexpected problems. While a large, slow moving organisation might be better at planning for the unexpected, we’ve found that smaller ones are often better at actually dealing with it.
Clearly, as small business owners we can’t plan for every eventuality. We can research all of the available data, make predictions about potential risks and prepare for them as far as possible – but for most small businesses, uncertainty is a fact of life.
The good news is that our small size and the flexibility of our internal structures and processes are actually an advantage in a changing, uncertain world. So, maybe it is time to embrace the uncertainty, and use it to our benefit.
Jürg Widmer Probst