How To Reduce Or Mitigate The Uncertainty In Planning

TRANSCRIPT AUTOMATICALLY GENERATED [00:00:00] Hey, Hey, as promised this week, I'm going to dive into the uncertainty around planning and what you can do to reduce or mitigate that. I think a lot of times entrepreneurs use uncertainty as a reason not to make any kind of plan. Well, if at all, could potentially go wrong. Why bother. Oh, who knows how to predict what's going to happen next year. So why bother? The reality is that planning as an exercise helps to focus you and your team on what direction you're driving in next year. And the uncertainty around that provides an opportunity for you. If you are prepared for it. So let's chat through some of the things I want you to think about as you hit moments of uncertainty in your planning process. The planning process is a bunch of inputs coming at you and you putting them together like a puzzle. To create a view of what you think could happen next year. One of the best ways for you to reduce some of that uncertainty. Is to measure some of those puzzle pieces now. So, if you don't know which offers made you the most money, which clients made you the most money, which strategies worked, what your financials have looked like recently, what the market's been doing? Where inflation is going. All of these things impact onto your plan. But you have time now to go and start to measure those. For example, if you have a membership and you don't know your churn rate, Now is the time to go and calculate your churn rate. Not just recently, but you look back at it over a trend so that you can forecast that churn. Into 2024. It's also an opportunity to look at what is your lifetime value of a client? If I bring in one new client, do they buy product a and then product B and then product C on average. Do some of them go to product E O F depending on your office suite. It's about making sure, you know, as much about your business as possible. Before you start planning. So some of that uncertainty you feel in planning is actually just a lack of [00:02:00] data. So, first of all, where do you need data and go and gather that that's at least going to help you feel like were you all making an estimate it's based on real facts rather than just being a guesstimate? The second place. We get some uncertainty coming up in planning. Is in the fact that we have to make a lot of assumptions. We have to assume if say, we're looking at this year and we sold this many products in our launch. We potentially assume that we're going to sell the same number in next year as launch, or maybe we're going to do something a little bit extra and we're going to sell. 20% more in next year's launch. There's a lot of the future that we can't predict. And therefore we need to make an assumption about it. However, What you can do year after year after year. Is get better at making those assumptions. In the same way that we gather data, we want to learn from one planning process to the next, where our assumptions are. On-point. And where they might've missed the Mark A. Little bit. So that when you come to do planning the next time around, you know, that let's say generally, you know, that you overestimate your launch take-up by 10% or maybe you underestimate it by 10%. Now, when you do your next planning process, You can adjust that assumption. You have more information about the process to use, Which starts to move us again from guesstimate to estimate, but the only way for you to do this is for you to document. All the assumptions you make in your pan. And I know you're thinking, oh, of course, I'm going to remember that. I said it was that I expected to make 20% more on my launch. This is the part of planning where it's like, you know, when you have that great idea at three in the morning, and you don't wanna turn on your phone and tap it into your notes app. And you'll definitely remember it in the morning. And then you wake up in the morning and you're like, wait, I had a really great idea. What was it? This is what assumptions is like implanting. If you don't write them down, you will not remember them. A lot of things are gonna happen between now and then. So don't assume that your brain has space to remember [00:04:00] all of these assumptions for you. Write them down. Okay, next up. We're going to assume that some of the things in our plan are going to be incorrect. There's a lot of uncertainty. There are a lot of inputs. There's a lot of calculations, the chance of something not being a hundred percent right. Is probably like 150%. So, what we want to do is add some buffets. And we want to add them in two very specific areas. Money. And time. There's a well-known budgeting principle. I don't know who first said it, but it's that everything will take twice as long and cost twice as much as you think it will. So I want you to look at everything that you've put that you're thinking about putting into your plan. And if you think, oh, I can do that in a week. I want you to allow yourself two weeks in the plan. If you can't bear to allow two weeks and how we can half give yourself some time so that if something happens. , you can stay on track. And the cost twice as my Johnny to think of us in terms of money. A hundred percent assume that whatever you think is going to cost to deliver the new offer, to run the new marketing campaign. We'll be twice as much as you think it is. But also think it will be twice as much energy. It's really easy to think, oh, I'm going to launch this amazing thing and not factor in how exhausted you're going to be from that launch. To budget in some recovery time. Also when you're doing the it'll cost twice as much. Don't forget that your time is not free. This is a favorite of mine. Assign yourself, an hourly rates and quote unquote, charge yourself to your projects. When you're evaluating ideas, don't take your time for granted. Assume that it's a cost. And then assume it's going to take twice as long. So it costs. Twice as much. the next uncertainty strategy that I want you to use. Is one that I know that you are going to rebel against every entrepreneur. Hates this idea. I need you to make a contingency plan. The reason people don't like to make contingency plans is they see it as like Penn be like, I don't have enough confidence in plan a. We're taught all these things. Uh, when we start entrepreneurship as new baby business owners, that we need to burn all the bridges so that we [00:06:00] commit. We need to. Leap and the net will appear and all of those things. That's great. When you're a baby business and you've got nothing to lose. By all means. As an established business owner. Especially if you have a team that is not a sound business principle. You don't need to get depressed. You don't need to spiral into it. But you can say, like this could go really well. As long as this happens. Where you've got like an as long as, or if this happens, then this will happen. I want you to think about what happens if it doesn't. What happens if the opposite happens so that you can prepare for that now, while you're calm while you're not in the midst of the stress and the panic of a crisis. And what you can do is work out. how much of a risk is it? How likely is it to happen? And then if it's really a huge risk to your business and it's likely to happen, you can think about how can I prevent it, or what would I do if it did happen? If it's smaller. You can decide to take the risk, or you can say, okay, if this happens, then I want to do this. Uh, having made some of those decisions upfront is going to allow you to take action really quickly in a crisis. And that's kind of how you win in a crisis is being decisive and taking action. Getting feedback and then trying the next thing. So as much as you don't want to quote unquote, focus on the negative or, you know, trust. The universe will deliver what you've asked for. You have a lot riding on that trust. And so it doesn't hurt to say. This is my plan a and I firmly believe in it. However, there were a lot of moving parts in plan a. And I need to make sure that we don't lose the whole of plan a. If the very first piece or the third piece or the seventh piece. Happens to go wrong. The final piece of dealing with uncertainty. Is some work that you, as the CEO need to do yourself. This is the development and the growth moment. The planning offers to you as the CEO. I want you to ask yourself, what is your resilience plan? What skills do you have that you can use that are in your toolbox? Then I want you to think about what people are in your life [00:08:00] specifically You can provide emotional support. When something goes wrong. Who can you talk to? Because what you don't want to do as the CEO is when something doesn't go, according to plan is vomit that onto your team, right? So you need to have your own backup. I want you to think about what you do from a self care or personal care perspective. You will react better when something doesn't go according to Pam, when you've had a good night's sleep, when you've had decent food in your body, when you have moved your body in some way, So, what are those personal care or self care habits that you are developing as a CEO? That will stand you in good state. If something doesn't go according to plan. So in the previous step, we built the contingency plan with the team so that everyone kind of knows what to do. If something doesn't go according to plan. This one, we're building your personal resilience plan. So that you understand. That you can bounce back when things go wrong, you don't spiral. You're ready to be decisive. Take action. Lead your team through it. And you can only do that. If you are ready to be resilient. I think we're very afraid as entrepreneurs that we're going to build this plan and it's going to be wrong. I did planning for a decade in banking. I have never. Been spot on with a plan. Never. I don't know anyone who's been spot on with the plan. What the plan is there for is to guide you in the direction that you want your business to move it's to guide your team in that same direction. It's to give everyone something to strive for. And everybody. Clear priorities and. Touch points as they go through the year. Whether you make the plan or not, that uncertainty is still there. What making the plan does is focus you on where is there uncertainty? Where can you do something about it and where can you prepare for it? And how can you reduce it the next time around?