MBA1854 Can You Future Proof Your Business?

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Let's get right into answering today's question. Can you 100% future proof your business? Of course, the answer is no, you can't 100%. But very little in life is guaranteed 100%. Your success in your business today is not guaranteed 100%. There's always going to be a margin of error, but it doesn't mean we don't try. It means that we got to prepare and mitigate our risk. We got to do whatever we can to help improve our chances for whatever comes in the future. This became obviously important with COVID 19, right? With this pandemic, so many businesses had to shut down or pivot or change or move industries to stay alive. And it's not just the pandemic, it's innovation. At one time, owning a cabby medallion in New York City was a great investment. After Uber, not so much. So let's set ourselves up for the highest possible rate of success. There are two parts to this. There's short term planning and long term planning. And we say short term, we're talking about for the next five to 10 years. And long term, we're talking about 10, 20, 30, 50, 100 years. And there's going to be certain things, certain decisions that you're going to make when creating and running your business that are really going to dictate or help you from future proof of your business beyond 10 years. One of them is just the industry you're in, the market you're in. A lot of people don't talk about this, but the level of your success is often greatly dependent on the market you're in. Some markets are just tried and true. They're markets that are just basic human needs and wants that we've all have wanted or needed throughout history. Some of these are like health care, education, security or protection, like the military, entertainment, right? We all want to be entertained, food and beverage. People need to eat, people need to drink. That's why so many people think it's so easy to start a restaurant as their first business. Because, hey, everybody's got to eat right now. With stability or high demand also comes high. You Guessed it, competition, the medical field, the medical industry, whether it's medical devices or medicine, or even the service of medicine, like doctors and nurses, highly competitive space. The same goes with the restaurant industry. This is why you'll often hear the advice to find a in demand market in some of these industries, for example, but to focus on a specific niche in the market so you're not really competing with the giants. A good example of this is Lululemon. Clothing is a basic need, right? Fashion is a part of our lifestyle. But Lululemon focused on a specific type of clothing, athletic wear. And beyond that, they niched even more. Den, we're not just any kind of athletic wear, we're high quality athletic wear. And a big chunk of their business is focused on athletic wear that's high quality, that is around the sport of yoga. So Lululemon is a brand that can foreseeably be around for 100 years. Yes, they'll have challenges, yes, markets will change and even the style and fashion will change, but they can adapt to that. And because they niche down, they became a big brand. They're well known for this niche. So this is one of the best ways to future proof your business with the product itself. Making sure that you're in an in demand market, but you niche down. Let's talk about short term planning to make sure that you're future proofed. Well, one of the things that you can do right now that's super, super simple that we do in our business is creating a what if document and we list a bunch of what ifs. What are what ifs? Well, it's exactly what it sounds like. What if this happens? What if that happens? And we basically write down all our worries, our threats, things that might happen. What if a competitor copies our features? What if the market shifts in this way? What if we currently charge in this currency and that currency plummets? What if, what if, what if? And the point of this what ifs list is not to worry you, it's not to make you feel horrible. It's for you to put everything down so it's documented, so you have a record of what could happen. And then we order it in the order of urgency, like this can possibly happen in the near future. And then every time we meet, we try to go through and answer these what ifs, what will we do? What can we do? What can we do today to work towards a solution? Maybe a solution to one of these what ifs is going to take three years, but let's get started on it so that Three years later, it's not a problem anymore. We also revisit this list often because sometimes these what ifs are irrelevant. For example, you might say, what if the market we're in is just a fad and it's no longer a trend? Two years in, you're going to be like, well, we're still going strong. That's not a fad. That is a new habit. That is a new behavior in the marketplace. So this is super, super helpful in organizing your contingency plans, regardless of what you think may or may not happen. Another piece of advice that I recommend that a lot of people talk about is the financial risk of the future. Now, I'm not a financial advisor. I highly recommend you speak to a financial expert, an accountant, somebody who's certified. But in my experience, it's often helpful to take money off the table from your business. Too many businesses reinvest all their money back in their business. This is okay when you're first getting started in your first couple years, but once you start growing, you need to start having some sort of safety net for a rainy day to take care of salaries, to take care of damaged goods or damaged, you know, maybe equipment that you need to, to create your product. You never know what's going to happen. Your office might collapse because of a hurricane, and natural disasters are not covered in your insurance. The point here is, is that you are in a better situation if you have some cash reserves. Why does Apple literally have billions in the bank? A lot of people think, why does Apple have all that money in the bank? You know, inflation is crazy. They're not making any money off of it. In fact, when you have billions in the bank, it costs you money to run a bank account, right? The bank will charge you for managing all that kind of money. They do it because cash reserves are really important to hedge your bets. Now, you may not have billions in the bank, but 40, 50, 60, $100,000 is good, a good amount of Runway for you. Having four, five, six months of payroll in your bank account will be really handy when something like a pandemic hits or a financial crisis. You know, a lot of people think that we'll just borrow money. Well, sometimes that's not an option. So having some buffer is actually quite helpful. Find your number and then, hey, reinvest the rest or take that money, invest it. Otherwise, that's up to you. But the point here is that save for a rainy day is solid advice.

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To wrap up today's lesson, it's impossible for you to make sure 100% without a shadow of a doubt your business will survive no matter what comes your way in the future. But you can mitigate risks. You can be prepared. You can make sure as much as possible, you're not blindsided. And this is going to help you sleep better at night. It's going to allow you to feel like, okay, I'm ready for whatever the world sends my way. You know, as I run and build this business, I can make sure that my team is protected, that I'm protected. And at the very least, I will feel content that, hey, I've done everything I can to protect the future of my business. Thanks so much for listening to the $100 MBA show. If you love today's episode, let us know in our rating review share. Drop us a rating and review on your favorite podcast app. Also, smash that subscribe button, follow button whatever it says on your podcast app so you get our next episode automatic. Before I go, I want to leave you with this. I recommend you write your what if list away from your office or away from your desk, maybe even on a paper and pen at a park. Get out of your environment. You know, think outside the box a little bit. You know, sometimes when you get out of the box, you think outside the box. But the point here is that what this does is it gets you out of your element a little bit, gets you out of your environment and allows you to remind yourself, hey, this is hypothetical. This is not going to happen for sure, these bad things. But let's think big here a little bit. Let's plan ahead. I know that has helped me when working on these types of lists. Thanks so much for listening and I'll check you in tomorrow's episode Q and A Wednesday. I'll see you then. Take care.

What do the steam engine, electricity and AI have in common? These technologies not only change how we work, they they can transform entire economies. I'm Stephanie Huang, host of where the Internet Lives, a podcast from Google and Latitude Studios about the unseen world of data centers. Explore how data centers are unlocking growth in every sector of the economy, from agriculture to medicine. To manufacturing data centers are powering a new era of AI innovation. Listen to where the Internet lives. Wherever you get your podcasts.