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Why 2020 Could be the Year Your Company Implodes?

The cliched phrase is, “failing to plan is planning to fail”.

Planning in theory is about clarity of purpose and tactics.

I kind of feel that for the great bulk of companies it’s just not relevant. Ambiguity and a degree of fuzziness is actually fine.

If you’re a one-person-band or a small company of say ten or less then the real plan is more likely to be a primary rational goal, maybe even a stretch goal.

You may have cracked the $1m of annual revenue and feel like you can realistically more than double that number. You may have hit $300k and feel you could crank that up.

What’s a plan look like for these two businesses?

I think it can be really simple, as in, ask what have we been doing that’s working well? and then, great lets focus on doing lots more of that.

A perfectly legitimate plan.

So, why did the headline ask, “Why 2020 Could be the Year Your Company Implodes?”

Here’s the thing about this rather turbulent world we live in.

None of us have much control over the shit we get to deal with on a daily basis. I mean the shit that we didn’t “make” or “plan” for.

You woke up feeling good; energy level high; sky is blue; the coffee tasted extra fine; the traffic was actually light; this will be a good day.

Photo by Nicole Honeywill / Sincerely Media on Unsplash

And then you open email and the first thing you read is that your government announced overnight that everything you buy from Chinese suppliers will cost 25% more, or that your country’s fickle currency got slammed and is now worth 15% less than yesterday.

Neither change was in your control. Both changes hammer your gross margin and clawing it back from customers is close to impossible.

The day that started out so great turned into a giant vat of caca and you didn’t see it coming.

We all know that climate-change is real, no matter who or what created it. CC is super real and having major impacts; and you and I can’t control those impacts.

Here’s the thing about these kinds of changes; it wasn’t your fault, you didn’t screw up, you’ve been doing so much right and then — wham!!!!

BTW, I sincerely hope this isn’t the scenario you face as you return to work for 2020.

Problem is neither of us know and we won’t know until that massive pile of dragon shit falls out of the sky onto our head.

At that moment you are so shocked you can’t even move let alone begin to think clearly about how to clean dragon shit out of your hair.

Sitting in a smelly pile of dragon caca; what is THE most important and valuable capability that you need?

I say it’s flexibility. And I don’t mean you can twist your body into a strange and impossible contortion.

I mean that in any business the flexibility that you need is the ability to turn off your expenses until you can take stock and assess how to respond.

So, as the business owner, here’s the most important plan you do need:

At least 50% of your regular costs can be shut off with less than 24 hours notice.

This is because when the proverbial hits the fan, it’s usually unexpected, i.e. you couldn’t have planned for it and that means you need to buy time.

And the very best way to buy time is to turn down your overheads until the plan becomes clear.

Otherwise that massive change has a good chance of taking you out — out of business.

As we run down 2019 and head into the great unknown of 2020, spend some time to look at all your costs.

Obviously you should be thinking in terms of are the costs absolutely essential to your ongoing operations. That’s a given.

What’s next is to check are they fixed costs and if so can they be changed to optional costs — costs that can be shut down fast.

IMHO, that’s THE plan that about 80% of businesses need in place.

Navy Seals say, “one plan is no plan and two plans are one at best”; or something like that. The ‘Seals deal with life and death just about every time they head out on a mission.

You’re not dealing with those high stakes — you are dealing with your livelihood and perhaps that of people you employ.

Just be sure you know how you’ll shutdown costs when turbulent times throw you a curve-ball.

About the author:

Greg Twemlow is the founder and director of SEVENmile Venture Lab, a for-purpose enterprise supporting the entrepreneurial community on Sydney’s northern beaches.