It’s a clear day, the sun is shining, birds are chirping, dogs and cats are playing together, a unicorn just danced for you on your front lawn. Life is goooood.
There are clouds in the distance, but they will pass. There is too much good energy around you, what can possibly spoil this perfect day? (Insert deep joyous sigh and blissful smile).
I had one of those days in 1996, right before I lost $1,000,000.
Sorry for spoiling your picture-perfect day, but for the rest of this story think of me as the ‘equalizer’. I’m the guy that just might take a speed bump or two out of your future, and have you turn a rocky road in your business into a racetrack.
I have the good fortune of speaking to hundreds of business owners each year as I go about my engagements, and with many of the conversations there is a recurring theme: “We’re so glad the Global Financial Crisis of 2008 is behind us and we’ve been able to recover, I’m so grateful that’ll never happen again.”
Here’s the bad news. Yes, it will happen again, and no, being ‘grateful’ is not a strategy to survive it.
Going back to the stock market crash of 1929 and the subsequent great depression of the 1930’s the economy has worked in cycles: boom - bust - recovery. And when you look back over the timeline, it comes around every 7 -10 years. Even if you cast your mind back over the last 40 years you’ll remember significant moments such Black Monday in 1987, the Asian Financial Crisis of 1997, the Tech Wreck of 2000, and the most recent GFC of 2008.
So what does this all mean? We’re overdue for another economic correction. Will you be ready?
Let me preface this by saying I am not an economist, nor am I an accountant. So outside of what you pick up from my personal experiences and business journey, you should seek your own professional advice with a financial advisor.
What I have done is steer 12 companies through 4 major economic shifts over 29 years and survived. So let me share with you my 5-point survival guide to Future-Proofing Your Business through the next, inevitable, financial correction.
Survival tip #1 - Stand in your truth
Right about now 90% of business owners are NOT preparing for an economic shift, believing “what could possibly go wrong?”
Market corrections do not come without signs; we just ignore them because we are afraid of the change that correction will bring. Truth is, if we really look into the metrics of our business we can see the shifts happening. Truth is, that if we listen to market and industry conversations and feedback we can feel when something is not right. Truth is, we sometimes just don’t want to admit it.
In our businesses, we have a 5-year rolling strategic plan. I want to be able to measure what is going on in the business so I can see trends in the industry. Without the strategic plan, I have no benchmark. Without a benchmark, I can’t spot a market trend.
On a rolling 12-monthly basis, I know the metrics of our leads, to deal flow, to revenue, to cash flow, to future revenue opportunities. And I have that data going back 20 years because I want to not only spot the trend I want to be on the leading edge of that trend.
Survivor tip #2 - In obstacles, there are opportunities
Because we had the relevance of data and the clarity of metrics in our business in 2006, we could spot some changes in the market. It was clear something was about to shift, but not clear enough to us as to how big it would be. In 2007 that became more obvious, so we shifted focus.
We had always had a desire to move our business from my home country of Australia to the USA, but could not get the traction. The market crash of 2008 gave us the opportunity.
Prior to 2008 it was tough to get a callback or a meeting, from anyone. They were all too busy to talk to me. And if they did answer the call the only response was, “when you move here, call us again.”
And then the music stopped. That was our opportunity to ask for the next dance. With the downturn, people now had time to talk, and they were looking for ‘new’ and ‘next’. They needed the fresh ideas and street smarts of someone that had survived a shift like 2008 to partner with. My $1,000,000 loss of 22 years earlier turned out to be our opportunity in an obstacle.
For us, one of the secrets of keeping ahead of the curve is to anticipate what the market is going to need next, and seek to deliver that today.
In a market shift there is always opportunity.
Survivor tip #3 - The worst time to ask for money is when you need it.
We’ve learned that there really is only one way to ride out the financial pressure of an economic correction and that is to have the cash to do that.
There is NO value in you scrambling for money after the fact. Be clear, in a correction, you’re friendly banker will be under pressure to keep their lending ratios in check, and you can bet the first thing they will do is seek to transfer some of that pressure to you.
I’ve learned over the years that solid money management advice does not come from your bank. Instead, I’ve chosen to surround myself with quality professional advisors that do not have self-interest in my finances, only my future.
For us, it’s not only about wealth creation it’s about wealth protection through an economic cycle.
Survivor tip #4 – Solve a problem
When times are good, deal flow in any business is a plenty. When times are tough, you’d want to be that person who solves a problem for your clients, because that’s all they are focused on.
When a market focus shifts, consider what your focus should be. A market positioning for your business that is laser-focused on the value you bring to the problem you solve for that client is your value proposition.
And you’d want to have some credibility behind the promise you make of the problem you’ll solve.
Survivor tip #5 – Have clarity and conviction of your vision
Over our years in business, we’ve been able to develop a clear roadmap to be one step ahead of a shift, a market change, or an industry trend. You can only do that if you have a distinct clarity of vision, and a conviction to pursue that vision.
We create vision in our business by starting with personal vision. What do YOU want out of life, what’s important to you and your family, and then how is your business going to help you deliver on that personal vision?
With personal vision in place, it’s then so much easier to match your business vision to suit your personal vision. This way you’re building your future bottom up, not top down. It’s not about blue sky and unicorns. The grounding of a personal vision for your future answers one simple question that lies deep within all of us – what will make me happy?
If you can answer that, then the speed bumps of a rocky road might not seem as rough to ride.
Economic corrections don’t need to be rough they just need to be respected. To Future-Proof our business we need to simply learn from the past, apply that to the present, to protect our future, because what goes around comes around.
SIDE BAR – 5 questions to ask to ‘self check’
Are you looking at your business in truth or fear?
The market and the economy are driven by the human emotions of fear and greed, and panic or pride. Face your future standing in your truth.
Can you spot an obstacle in an opportunity?
Are you ready to run into the burning building? Opportunity comes from obstacles, but only for the brave.
Cash is king. Do you have enough?
He, who holds the gold, wins. In an economic shift it never rains, it pours, so have your bucket ready because you’ll want to be ‘liquid’.
Positioning is everything, what is yours?
How will you position yourself in an economic correction in the eyes of your client, what specific problem will you solve for them?
Do you have clarity of vision?
If you want to avoid the accident, be clear on the road ahead. What is your vision of the future, beyond the inevitable economic shift?
Troy Hazard is a keynote speaker on business strategy, growth and change. He is an Amazon business books best selling author and television host. He has owned 12 companies over 29 years, and has consulted to 300+ companies in 16 countries.