It would be foolish to start a business and think that things will flow smoothly. It just never happens. It is important to have an idea of what difficulties lay ahead of you. For example if I projected that Inteco would be chunning 100 sanitary pads a day but that doesn’t happen. What shall happen to the business? What if your sales are not as your projected? Let us say by 25% or even by 50% will you still be able to run the business? What will you do if that scenario was to play out? You need two to five contingency plans.
You need to ask yourself what if. It is a VERY powerful question. If we switch up the earlier example and say that you are surpassing your expectations. You projected sales to be 100 but they are now 150- 200. How will you consider that a risk? Should you consider it a risk is a better question? Yes you should. Why? Well, because your resources were allocated for 100 units. It means that you need more resources to cater for the extra units been sold. Do you have the ability to do so?
It is as important to know how you will mitigate these risks as it is to identify them. It serves no purpose knowing the risks and doing nothing about it. If you plan to use your business plan to get investments this is even more important. Investors understand that there is a lot of risks involved in business. They want to see how these risks shall be reduced. If the document is for your own personal internal use then it is still good to right them down. It is a great asset to go back and look at how you have planned to tackle issues.
A great way to do this is to sift through your plan and say what if this does not happen? What if it happens differently? What if the factors surrounding this particular element get affected (list the ways they can be affected) what shall we do? Once you have finished with the extreme negative go back and work out what ifs for extreme positive. What if I surpass my projected sales? What if my marketing is so successful and I have a massive wave of customers? What if people start looking for my business and I am not the one pushing anymore?
Until next time