I had an interesting conversation with a business owner the other day. He is well experienced and successful. His thought of the day.
“Running a business is like parenting a two-year-old. You should worry most when it is very quiet.”
Businesses are not static. They are vibrant entities. There are hundreds of variables which converge to produce product or service. Sometimes a variable changes and puts the system out of kilter. People manage so that these are absorbed. The system runs smoothly.
According to my friend that is when you must be more alert not less. It is easy to be accepting of the pleasant situation. His view is that complacency leads to destruction. Somewhere out there, something fundamental is about to change or there is a competitor plotting how to eat your lunch.
Be vigilant. Paranoia is not the answer although some would argue that you can never be paranoid enough. The answer lies in a deep understanding of your business and the marketplace that it serves.
You cannot be vigilant for the things that matter unless you know the things that matter and potential range of change. For example, if you have cross border transactions, how much does it affect you if the relative currency values change? What of the minimum wage? Alberta seems convinced that raising it 50% or so would be a good idea. If most of your sales are financed by banks or others, what if rates return to something more historically normal?
Every business has crucial variables. It is like the Pareto Principal once you iterate it twice. 1% of the inputs generate 50% of the outcomes. You had better have a general idea where the 1% lives.
The good news is that when it is quiet, you have more time to survey the field and seek options. Don’t waste the time. The quiet is not going to last or become even more quiet.
Anticipation and option seeking are hallmarks of successful entrepreneurs.
Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.