“Failing to plan is planning to fail.”
– Benjamin Franklin
There’s a lot in the media at the moment about downturns and disaster planning. But there’s not so much about another key area of planning – opportunity preparation.
As I’ve discussed, great fortunes can be made in tough times – and times are definitely exhilarating at the moment.
Why plan for opportunities? Is it even possible?
The bit of the human brain responsible for filtering your perception (formally known as the Reticular Activating System) is mostly coded to respond to what it is primed to LOOK FOR. That’s why, once you choose a new car model, you start seeing them everywhere.
This is sometimes called the Baader-Meinhof phenomenon or the frequency illusion. It applies to all sorts of human activity – including business innovation and opportunity development.
If you don’t have a good awareness of the types of opportunities that would help to grow your business, then your chances of spotting them IN TIME TO ACTION THEM are fairly limited.
Great opportunities show up in tough times – and times in some industries are seriously tough
The October ScotPac SME Growth Index identified that the SME sector is increasingly two-speed – with many businesses looking up AND a disturbingly large percentage going the other way::
- 56% of SMEs projecting business enterprise growth up to 17%
WHILE - 34% of SMEs forecasting a decline in revenue by as much as 28%
It is definitely tough!
Insolvency rates are at record highs in Australian business – and the insolvency experts in my network expect them to increase.
Finding the time to plan is also tough – but the consequences of NOT planning are even tougher. In the same report, ScotPac also noted that:
- 25% of SMEs said the loss of a major client or supplier would tip them into insolvency
AND - 4% of SMEs said they would face immediate closure
YET - 79% of SMEs DON’T have a robust risk management plan in place
Think about it: 79% of SMEs DON’T have a robust risk management plan in place – in today’s conditions! And the chances of them having an opportunity maximisation plan are vanishingly small.
(Do you need to manage debtor risk? A powerful tool for managing customer risk is Debtor Insurance – which can be particularly affordable as an add-on to a business liberating Debtor Finance package. Read more about how to get a good deal on debtor insurance here.)
Is an opportunity about to knock on YOUR door?
If you’re one of the 56% of businesses projecting growth – or even if you’re not – there may well be unrecognised business opportunities about to knock on your door.
Tough times are uncomfortable, but they can help us become smarter and tougher. Tough times can create a lens for us to look at HOW we do WHAT we do – and to build smarter business strategies and practices.
They can push us to make uncomfortable changes for the better. They can discipline us into doing things that we wouldn’t otherwise get around to – things like Working Capital planning.
We hear lots about risk reduction planning
Even if all you’re doing is worrying – you’re probably putting a degree of thought and energy into “preparing for the worst”. The human negativity bias – and our anxiety gene – mean that we’re a bit better at preparing for the worst than we are at preparing for the best.
(If you think you’re ready to do more than worry, then dive into my SME Operator’s Guide to Cash Flow Victory)
I hear MUCH less talk – at least in SME business today – about how to be:
- Opportunity aware
AND (more importantly) - Opportunity CAPABLE.
How do you FIND new opportunities?
An increasingly recognised feature of human perception – especially in day-to-day life – is that most of us, most of the time, mostly see WHAT WE’RE LOOKING FOR AND EXPECTING.
If we’re not scanning for opportunities – and thinking about how to resource them – then they’re all too easy to miss.
To me, the key activities that help create opportunity awareness are:
- Being aware of your market and how it is changing
- Knowing who your competitors are, what they are doing, and their key value propositions.
- Being aware of what’s happening up and down your industry supply chain.
- Keeping an eye on global trends and how they may affect the Australian Market
SMEs today have many more tools to help in this area than we used to – tools that can help improve our opportunity-spotting capacity.
Business coaches and online resources have offered SME owners One Page Plans (2002) and Business Model Canvas (2005) planning tools for over 20 years. Their purpose is to help you look outside your business. Researchers have built tools to help us spot the Blue Ocean Strategy (2005) and act on Lean Solutions (2005). (I have used the technique and it works)
There is a question that these tools don’t always cover: funding opportunity realisation.
How do you FUND new opportunities?
There’s not a lot of point in seeing an opportunity if you’re not able to act on it. If you don’t have the funds and the resources ready to roll, you’ll be last out of the gate.
To be opportunity-capable, it helps to:
- Have an understanding of the resources you would need to mobilise in order to action possible opportunities – (people, tools, materials, cash, etc.)
- Have funding strategies in place that will enable you to move quickly and decisively.
You don’t have to tie up a whole lot of cash in order to be opportunity-ready
One straightforward, business-enabling finance tool that can give you resources to convert new opportunities into business growth s is a non-bank credit tool such as debtor finance or trade finance. Another is establishing a FinTech-supplied unsecured mortgage.
These practical business financing tools offer SMEs some extra liquidity to make the most of unexpected opportunities. And setting up access for them isn’t expensive.
$495 may be all you need to invest
For example, for an unsecured finance facility of $100,000, the annual fee is just $495! If you don’t use the money, then that’s all you pay.
Having that facility in place means that when you find that opportunity to build your business – you have the funds to take maximum advantage of it.
The world is changing faster than ever – and so is business
We’re surfing multiple waves of technology innovation – from eCommerce to AI and EVs. Political and economic disruption look like they’re on the increase.
All of which means that SME business isn’t a familiar game of “swings and roundabouts” anymore – it’s more like a 21st century extreme rollercoaster.
It ALSO means that there are likely to be big opportunities for those who are ready to take them when they show up. What’s sad for a struggling competitor could make it possible to:
- Hire good staff
- Buy out inventory
- Take over a big project
Don’t just “plan for the worst” – make a bit of time to plan for the best as well. Turn on your internal opportunity-spotter.
Better, smarter, non-bank financing lets you do both – AT THE SAME TIME.
If you’re ready to create your SME Opportunity Maximisation Plan, then book a Confidential Working Capital Strategy Review today.
