How to prepare your business for uncertainty

 By preparing for all possible scenarios and diversifying your products and services, you won’t be caught by surprise. [iStockphoto]

As the world recovers from the adverse effects of the Covid-19 pandemic, business owners have learnt an important lesson - to prepare their businesses for an uncertain future.  

Change is inevitable and continuous. To survive and thrive, business owners need to always be prepared to respond to change.

Bear in mind that preparing for change isn’t a one-time effort aimed at achieving a “new normal” and then relaxing. As we’ve noted, change is continuous - and so should your business efforts to respond to it.

While it is impossible to perfectly predict the future, there are some steps you can take to protect your business. Here are some of the best ways to prepare your business for an unforeseen future.

Keep up with current events

While we cannot predict the future, we can try to anticipate and prepare for changes. Keeping up with current events in terms of politics, social issues, and economics can help you react fast to any developments that may affect your firm.

Keeping an ear on the news can help you understand and anticipate your customers’ changing needs and make products aligned with current trends.

It also makes you understand the macro-economic factors that may affect your industry. With the right information, you can plan and respond promptly when the unexpected occurs.

As an entrepreneur, make a habit of reading and watching the news. Subscribe to relevant industry blogs, podcasts, YouTube channels, and magazines to make sure you’re always in the know. Adequately prepared to respond to change.

Prepare for multiple outcomes

When man landed on the moon, two different speeches had been prepared – one to celebrate a successful return home, and another to commemorate them in the event they weren’t able to return home safely.

Similarly, comedians formulate different responses to heckling before they even take the stage. The most successful salespeople prepare different responses for the various directions a customer might take.

Your business needs to be ready to pivot at a moment’s notice. [iStockphoto]

As a smart business person, you should also always be prepared for different scenarios and outcomes.

Even if you’re convinced that events will go a certain way, prepare your business for different possible outcomes. For example, you might expect a certain policy that favours your business to be passed.

But you also have to prepare for an eventuality where the policy isn’t passed as expected.

In the case of the pandemic, businesses that had plans that accounted for full lockdowns, partial lockdowns, and total removal of restrictions were more prepared for changes than those who only planned for one outcome. By preparing for all possible scenarios, you won’t be caught by surprise by any changes.

Diversify your products and services

To successfully navigate an uncertain future, your business needs to be ready to pivot at a moment’s notice. The best way to be prepared for such changes is by diversifying your products and services.

Diversifying how you offer a service can mean changing and updating your processes, adopting new systems, changing business locations, and venturing into e-commerce instead of relying fully on your brick-and-mortar shop.

Such changes should always be informed by your customers’ needs and market demands, not just the need to appear like a cool business. In an uncertain and ever-evolving business world, it’s always wise to have a variety of ways of generating income for your business.

Review your business strategy

The unexpected has the potential to upend your entire business strategy in an instant. It’s always a good idea to regularly review your business strategy and make any necessary changes in your path to success.

It’s especially important to do so when you’re expecting changes in your industry.

By rethinking your company plan, you can look for methods to develop and thrive rather than merely survive in the face of unpredictability.

To properly conduct a strategy review, start by taking a step back to examine each element of your current strategy. This will help you to pinpoint where you need to make changes, especially elements that have been disrupted by technology, politics, the environment and other factors. For instance, you may find that a new competitor has entered the market and introduced a pricing model that is changing the entire market.

Adequately prepared to respond to change. [iStockphoto]

Review details of your strategic plan such as objectives, measures, and initiatives. The goal is to ensure that each element is updated to reflect your new reality and expected changes.

After conducting a review of your strategy, communicate the changes to every member of your team. This way, you’ll create an organisation-wide buy-in, which makes it easier to attain strategic success.

Know your business numbers and KPIS

In the face of uncertainty, it’s critical to understand your key business figures and KPIs.

This way, you can see where your company stands at a glance.

Every entrepreneur should always have a good grasp of business numbers such as the cash flow, net income, profit and loss, cost of revenue, gross margins, total inventory, price point, expenses, and day’s sales.

Keeping an eye on these important figures helps you to spot when your business is in trouble early enough so that you can implement appropriate changes.