November 22, 2011
Nash Law Firm, PLLC
By: Stephen J. Nash, Esq.
nash@nash-law.com
Tweet
Uncertainty to business is like kryptonite to Superman but in the end, kryptonite never stopped Superman from fighting crime and uncertainty shouldn't stop your business from going forward. On the flip side, it is foolish to go forward without carefully considering the uncertainties that can impact you business. The following are the top three things every business must do to plan for uncertainties.
One
How Likely Are The Uncertainties to Turn Bad
Everyone can normally see the uncertainties that may impact their business but rarely spend the time to really consider how likely the uncertainties might actually come to be and hurt their business. The more likely the uncertainty will come to be, the more risk you take by ignoring them.
How do you evaluate the likelihood that the uncertainties will come to be? Is there a historical precedence to what you are facing - i.e., can you use history to predict the future? Are experts writing about the uncertainties that you are concerned about? Have you consulted an experienced, knowledgeable professional that you trust? Using their experience and knowledge can provide you great insight into the likelihood of the worried about uncertainties coming to be.
In the end, you must make an educated guess as to the what may or may not happen.
Two
If The Uncertainties Turn Bad, How Bad Can Bad Be?
Not all uncertainties have an equal impact on your business. Why worry about an uncertainty that does not greatly impact your business even if it hits? On the other hand, an uncertainty that is unlikely to hit but is devastating if it does hit must be considered. In other words, the risk of a nuclear bomb being dropped on your town may be small, but if it hits, the result will be devastating.
Three
Can You Go Forward But Eliminate the Possibility for the Uncertainties to Turn Bad or to Minimize them if They Do?
There is only one way that I know of to eliminate all uncertainties in business and that is to do no business - not a very practical solution.
Some changes to your business are fairly easier to do but just the the will power to do them. Others involve totally restructuring your business. This can be expensive and time consuming.
Generally, the more likely the uncertainties will hit and the greater the impact if they do, the more pain the business should be willing to bear to avoid or minimize the impact of the feared uncertainties.
Four
How Much Risk are You Willing to Take?
Everyone has a different risk tolerance. When running a business you have to understand what kind of risk you are willing to take. Those with a high threshold for risk are able to undertake a business plan that others will shy away from. Less competition generally brings higher profits. Of course, it the risk comes home to roost, the high risk taker will pay the price.
Bootleggers made a lot of money, but most ended up in jail and broke. Many ended up dead by the hands of the police or their rivals.
Conclusion
We are living in unusual times. Nobody could have predicted what has happened over the last 10 years. We have gone from a booming economy to the worst economy since the Great Depression with no end in sight. Many businesses, large and small, have gone out of business or have downsized. Financing for businesses, especially small businesses, have disappeared.
The future is filled with uncertainties. When will the economy begin to recover? When will financing become available to small businesses? What will be the impact of new government regulations and how aggressive will the government enforce those regulations?
To freeze with fear in the face of these uncertainties will kill your business. To ignore these uncertainties leaves your businesses fate in the hands of luck. To educate yourself, to create a business plan that takes these uncertainties, your evaluation of risk and tolerance for risk into account will give you the greatest chance to survive and even prosper in the face of these uncertainties.
For Real Estate Professionals:
How to reduce risks when working with short sales
NOTICE
The foregoing is not intended to constitute legal advice for any specific circumstance, but is intended to reflect broadly applicable principles, under Minnesota law, relevant to a typical situation. Each set of facts and each contract is, or can be unique; the unique facts and specific language of the contract may require a different legal analysis and may result in a different outcome. Before proceeding in reliance upon this or any other general description of law, consult with an attorney competent in the field of practice relevant to your situation.
Copyright 2011 Nash Law Firm
]]>