It is July and I had expected to be writing about Wimbledon and playing tennis with clients. However, that would not be authentic with things as they are in the UK. The business community seems to think the future is very uncertain and is reacting.
I write this not three weeks on from the referendum; yes, I am sorry to mention it again. Everything around us is trying to whip us into a state of frenzy – the papers, TV, radio, social media. The general feeling seems to be that the country is going to Hell in a handcart. However just a couple of hours ago Andrea Leadsom withdrew from the Conservative leadership contest and it looks like Theresa May might be installed as Prime Minister on Wednesday. Thank goodness the UK will no longer be leaderless and perhaps some of the hysteria might calm down.
Those who enjoy nothing more than the excitement of a crisis are having a field day and have been trying to depress you. Undoubtedly a rudderless country facing a possible election, uncertain trade agreements and a possible recession is a depressing prospect but all these events may not come to pass. I am not easily panicked but as you know I also do not hide behind the sofa. In business terms things are not good. Everything I hear indicates that business is starting to batten down the hatches. It is not waiting for the politicians. Minds have been made up and action is being taken. I hope that you are not being affected but you might be.
This is not a good place to be but my default response is not to react to emotion and hysteria. I try to look the issue in the eye and think, evaluate and create a strategy. In every business there are trigger points when action must be taken; they are different for each one of us but we know them. I find once I have a contingency plan this allows me to shelf the problem until the trigger points are reached. If they are never reached, then great; if they are I am ready!
So what the tips for contingency planning in the current situation?
Be brutally honest and quantify the threats to your business:
- Currency fluctuations
- Stock Market volatility
- Possible interest rate increases or decreases
- How healthy is your cashflow?
- Instability in your suppliers – will they be reliable and consistent in delivering your materials; will the price be stable; how honest will they be in declaring any problems they are having? What are your alternative sources of supply?
- How secure is your order book? Do you have customers or clients who will batten down their hatches and reduce or terminate your product or service? Will your contract allow this? Will they use the situation to try to reduce prices or lengthen terms of payment?
- How vulnerable are you to business loss?
- Where do you have flexibility? Which costs could you reduce or cut out all together and how quickly?
- How can you protect your revenue best? Should you shorten your terms of business? Bear in mind that Waitrose has just announced it will match Tesco in paying its small suppliers within 7 days. It can be achieved.
- What is your best guess about your market sector as things currently stand? What might happen if there is an election in the autumn or spring? What might happen if there is a full scale recession?
- Where are you vulnerable and how can you protect yourself?
- What are the trigger points that indicate you should react immediately and put your plan into place without delay
And then quantify the opportunities:
- Which business strengths and skills do you have to bring to bear in this situation?
- Which personal strengths do you have to weather the storm?
- How strong are your customer relationships and how can you improve them further?
- What are the opportunities in these scenarios for you?
- Which potential clients will be available to you because you are able to do things differently to the competition?
- Where can you react quicker or more effectively than the competition?
The business drivers will not change. It will still be a numbers game when you seek out new customers; it will continue to be about value for money and quality of service. Being fast on your feet will make the difference.
“Wait and see” is not a good plan in the current UK situation. Once you have faced the worst I guarantee you will feel better; once you have quantified the threats you will feel better; once you have worked out your options, you will feel better.
If the trigger points occur, then react immediately. You might not like what has to be done but there is no time to lose in putting a well-considered plan into operation.
None of this is original. You have heard it all before. Make the plan, file it and hopefully you will never need to look at it again. Doing it puts you in control; you will not then be spooked by all the noise going on around you. Let’s hope we will be through this turbulent period quickly.
If this has been interesting, please share it. If you are thinking of working with a mentor, please chat with me about what you are hoping to achieve. I might be the right person for you or I can help you find someone who is. In the meantime, life is good; let’s live it to the full and be the best we can be.