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.
One of the best ways to think about the unthinkable is to ask “what if” questions. Here are a dozen 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 these businesses don’t get is that customers know when they are being ignored and taken for granted.
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. Getting caught off guard can lead to negative consequences.
What if we lose a major supplier?
You may think certain vendors love you. Perhaps. 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 we don’t know what we don’t know?
Businesses are often closed systems, more akin to solitary confinement than they are to classrooms. Employees know the topics that are off limits to open discussion, while impenetrable walls guard against the threat of fresh ideas.
In such a stultifying atmosphere is it any wonder that companies fail to meet new challenges and opportunities?