Every business faces risks. Some you can control, others not. Either way you must have plans to mitigate them or risk oblivion.
In our recent mastermind session, 20 mid-sized business owners discussed common risks they faced and how some recent, unforeseen events were causing major havoc for them.
One provides software services to tourism and hotel operators worldwide. The corona virus has conservatively cost him $500K just in the last few week as his clients pull back, want to put his services on hold, delay payments etc.
Another in the property management space is facing major disruption from “Proptech” where technology takes over the manual labour, slashing his monthly income.
Changes in technology infrastructure meant one attendee had to completely reengineer her business moving from analogue technology to fibre optic.
We work extensively with financial planners where there’s wholesale disruption due to government legislation changes. Changes which will see thousands of firms shut.
And then there are internal risks.
Key employees may leave. Some may take major clients with them. Another mastermind attendee found an employee who’d been passed over for promotion poisoned the well, both with customers as well as other employees.
Lack of financial controls have led to hundreds of thousands of dollars being embezzled. The list goes on.
Here’s a process we teach our clients around strategy and mitigating risk.
Modelled on Walt Disney, it covers three major aspects of strategy. The Dreamer, The Realist and The Critic.
Effective strategy and planning involves the synthesis of all three.
The dreamer is all about what you want. What you want to achieve. New ideas and your goals. Think long term objectives.
The realist phase transforms the ideas into concrete steps. Think “how to”. This phase defines and implements the path to reaching the outcomes you want. The realist thinks in shorter timeframes.
The critic phase evaluates everything that could go wrong. What could be missing. Working out where risks could be – both internal and external.
Think of the Disney strategy as a recursive loop. For every risk or what could go wrong, cycle back to the dreamer – what could you do to take care of it. Then act as the realist. How specifically could this be implemented. Then the critic. What else is needed or still missing.
The point of all this is you must sleep with one eye open.
Look ahead and determine what risks you could face. And work out how to mitigate them.
Obviously this takes a great deal of strategic focus.
As a business owner that’s your job. Don’t make the mistake of getting subsumed in the day to day operations. You must regularly lift yourself up and work on your business.
But as business owners it’s often difficult to step outside the business and work on strategy and planning. Setting the right priorities and determining who should do what, by when. Mitigating risk.
If this is you, we offer strategy sessions where we determine your short, medium and long term goals, risks which could disrupt your operation and put in place a plan to help you achieve them.
Call Rashid on 0414 913 334 for a confidential discussion on how we can help you move forward.