Our business becomes our own little world. It is the center of our universe, almost to the point where we forget about the outside world around it.
A huge amount of business advice and guidance focuses on looking inward. It talks about the small details in your company and the issues that might arise with your own section of industry. It’s all geared towards the single company that you have control of; that is where you are constantly asked to focus your efforts.
Obviously, there is nothing intrinsically wrong with this approach. By taking your eye off your own business ball, you could find yourself juggling more than you can handle. Whether you are a start-up or an existing company, it’s only right that this dominates your thinking.
There’s also a but, isn’t there? (Or a however – though as Rachel on Friends once put it, that’s just “a fancy but”). As with most things, the above central-focused philosophy has its flaws. To return to the idea of juggling, imagine that the separate areas of your business are juggling balls. There is one for finance; one for advertising; one for marketing and so on and so forth. Most of the time, you have your eyes on them as they spin through the air. You’re in control; potentially stressed frequently, but you’re in command of the situation.
In trying to keep them upright, you are so focused on them that you miss the wind that is beginning to pick up around you. The wind is ferocious. Suddenly, you can’t catch the balls and continue to juggle them – they have been swept up by the tornado that you didn’t see coming.
This is your fate if you focus so much on your own business and forget you are part of a global picture.
If you have a small or start-up business, it can be easy to dismiss the concerns of current global affairs as irrelevant. You aren’t a limited company; you don’t have to focus on worrying about that side of things. If you’re an optimist, you might tack the word “yet” on there, but generally, your attitude is dismissive.
Another reason that you might ignore the situation outside of your comfort zone is because you don’t understand it. The global marketplace is a house of cards waiting to fall. It’s happened before and will almost certainly happen again. Some of the ways in which it operates are mysterious or even just plain contradictory. If you don’t understand it, it can feel like a massive waste of time trying to learn. Time, you feel, would be better spent focusing on your interests.
Is there anything to be said for these arguments? Not quite…
The below apply to the smallest sole-trader business right through the top of the chain with the multinationals. There is no escaping these issues.
When you understand the importance of paying attention to global affairs, you can begin to find a way to manage it. It is unreasonable to expect yourself to be able to consume the news as it happens; you wouldn’t have time for anything else!
To begin to narrow it down, look at the areas of your business that might be vulnerable. Look at your suppliers, especially if they are overseas. Think how you would be able to cope if they were hit by a natural disaster or prices unexpectedly rose. Also look at the political climate in the country: is it stable? Is there an election due soon?
Put together a diary of potential issues. For example, US companies tend to have quiet periods after the time of a presidential election. Furthermore, customer spending tends to increase in the summer – if it doesn’t, you need to know why not. You should soon begin to get the year mapped out and a list of areas you need to give more attention to at given times.
When you have done the above, you can then start to learn patterns and anticipate problems. If you see there is trouble coming, then you need to have a backup plan.
For every supplier that you have, think what you would do if you could no longer use them. Look for alternatives and figure out what the difference to your bottom line would be if it alters your purchase price.
It’s important to know exactly what you would do if any of the above circumstances occur. This is a contingency plan, and it’s one you should constantly be tweaking and updating as situations change. Keep a note of things that are currently weak – such as oil prices – and join the dots until you see how it will impact you. Do the same for items experiencing a surge, such as gold.
While the above is important, an essential area to focus on is how consumers are behaving. You can have the best business in the world, but without customers, you’ve got nothing. Any possible signs of consumer financial issues such as a rise in personal bankruptcies should be factored in. These are your harbingers of real doom; if you only have the time and resource to track one area, make it this one.
In a word, no. It’s unlikely that you can have any influence over the global situation, but that doesn’t mean you can shrug and give up. All you can do is anticipate, spot problems and have an answer to them – before you even need it. Not doing so could bring everything crashing down around you.