There’s an old saying that life doesn’t always go according to plan. Business certainly doesn’t.
You can have your goals written down, your budget prepared and a pretty good idea of where you want the business to be in 12 months, five years or even ten years.
Then it doesn’t rain. Prices move. Interest rates change. A key employee leaves. Someone gets sick.
Or the next generation decides their future looks very different to the one you had imagined.
Some things we can control. Plenty we can’t.
That’s why I’m a big believer in contingency planning.
Planning for the “what if?”
Contingency planning isn’t about being negative and constantly expecting the worst.
It’s about asking: “If this happens, what are we going to do?”
What concerns you most about achieving your goals? What factors could change the outcome? At what point would you need to change direction?
Think about the process of updating your Will. Your solicitor works through different scenarios and asks what should happen under each set of circumstances. Business planning should involve some of the same thinking.
Rather than waiting until you’re in the middle of a problem, you’ve already spent some time thinking about your options.
Know when you need to pivot
One of the biggest dangers in planning is becoming so committed to the original plan that we fail to recognise when circumstances have changed.
Identifying the critical factors affecting a decision and establishing the point at which those factors would cause you to reconsider your approach is key in any business.
Having those conversations before the pressure is on can make decision-making considerably easier.
In farming, we do this all the time.
When do we sow? How much do we spend? Do we hold livestock or sell? Do we proceed with that machinery purchase? At what point does Plan A become Plan B?
You don’t have to work it out alone
Whether you’re working through a business goal, succession planning or estate planning, there’s value in bringing the right people around the table.
That might include your accountant, solicitor, lender, financial planner, business consultant and, importantly, your family.
You might know what you want to achieve, but involving others can help identify consequences or opportunities you hadn’t considered.
Keep moving forward
Setbacks don’t necessarily mean the goal was wrong. Sometimes the path simply needs to change.
Break big goals into smaller steps. Review your progress. Focus on the handful of projects that genuinely matter. Build some emergency reserves into your time, resources and finances. And don’t be afraid to ask for help.
Most importantly, remember that a good plan gives you direction. A good contingency plan gives you options.
And when things don’t go according to plan, having options can make all the difference.
If it’s time to step away and review the priorities, goals and future direction of your business, contact me on 08 8253 2906 or info@financialservicessa.com.au.
