Right now business is pretty good for the clients I work with and my conversations with them include the question about what we’re going to do if things reverse and aren’t so good in the future.
Business is good right now and yet at the same time the amount of optimism from some of my clients is pretty darned low. I find I’m having more alternate scenario conversations than I’ve had in years.
We are actively building strong what if’s that cover business downturns. For my clients the good news is we are also looking at expansion plans that involve moving into new niches. We believe that if a downturn comes we will have plans in place for expansion to a new niche that should help mitigate and in some instances even help the business to continue to grow during a downturn we all expect.
Scenario planning requires flexibility. Successful businesses are flexible. Some businesses move into a new reality easily and some change with a lot of teeth gnashing. Those who do scenario planning tend to pivot to new realities easily.
If your company can pivot easily and change company activities you will have thought through and made plans for actions you will take if the outside environment changes. I’ve come to the belief that good scenario planning can help you have confidence in company changes you might have to make.
Understanding what the next niche is helps you keep from having to make unwanted cuts in your company. One of my clients is now hiring people as fast as they can. I asked them what they would do if business got soft. The CEO told me they would have to just layoff a significant amount of people they just hired.
Just before we started doing some preliminary scenario planning in his company I asked the CEO if this is an activity he wanted to do? His answer was no, he would much rather keep the new people he hired on staff.
After just a few minutes of scenario planning we found that if we were ready to enter a new niche we might have a short term hit to profits, but we likely would have to lay no one off. This business might have to hire more people because of the new niche they will pursue.
Downturns are for those who aren’t prepared. Part of scenario planning is also what I call disaster planning. When we look at the obvious things that could negatively impact our business we at least think about what we can do to make the problem smaller before it happens.
It’s the pre-planning for a scenario that makes the implementation easier and smoother. Understanding change and having planned for it before you need to move makes change easier. This is where the value of scenario planning is most important. It just makes doing the right thing easier.
We have a special report on what I call four tiered marketing. This is an easy and short way to build scenarios about what you think might happen in your company. It could help you avoid a situation where your company becomes frozen when it’s time to make a change. To get this report click on the button below.