If you’re worried about what the next 12 months will bring for your business, you’re not alone. As the economy slows, startups in the tech space in particular are worried about how their enterprises can be successful with so much uncertainty about funding and the broader economy.
While Buddhists (and others) will tell you that you can’t control, well, anything, really, there are steps you can take now to increase the chances of your business succeeding, despite an uncertain future.
3 Tips for Navigating the Future Now
1. No plan = a high probability of failure
Even having a bad plan is generally better than no plan at all because at least you’ll set a direction and can use it to gauge progress. (Plus, others can use it as an example of what not to do). So, avoid letting uncertainty about the future paralyze you. You can use common sense and what you know about your business and customers to build a plan to survive financially.
Some businesses won’t need to raise funds as investors tighten their belts and some will be successful raising capital in the near term. But, it’s best to be conservative and plan for the scenario of no new funding for the next 12-18 months. One rule of thumb is to have 20 months of cash on hand. Make sure you know your burn rate and work on a plan that targets cutting it in half to give you twice the runway you have with your current funding.
Pausing to plan and staying focused on short term execution will yield better results than simply carrying on and hoping for the best
Work with every member of your management team to understand the tradeoffs of investing or divesting in various people, technologies and programs. Collectively discuss what is necessary and best for the business and what will enable the business to survive to fight another day. Often this includes the difficult decision to cut salaries and/or jobs and it is best to do this more deeply than is comfortable so you only have to do it once.
2. Focus will be required
What will quickly become obvious if you are having genuine discussions about how to pull back on spending, is that it won’t be possible to continue all your current or planned activities. Serious focus will be required. Not focus like reading a long document, but focus like ‘our company will figure out what we uniquely do that drives the most value for our customers and ONLY invest in that for the next 12 months’. If you have 5 products and one is driving all your revenues, that will likely be the ONLY product you will improve and market and sell in the next 12 months. This kind of focus takes honest reflection and courage – the courage to say no and to commit to staying strong by filtering out distractions you can’t afford.
3. A short view supports the long game
The long game is the marathon but the short game is the next leg of the run. This is what you have to succeed in now. There is no marathon finish if you don’t get through the next leg. So, with your reduced spending and laser focus, look to the next 6 months and figure out how to maintain and build your brand, customer base and revenues over the next two quarters. What does success look like in that time frame? What will allow you to say you survived and can continue on to the next leg of the race?
Seeing the big picture and planning for the near term may also benefit your organization long term. You may find you want to keep up this cadence of assessment and planning to stay agile and continue strengthening your team-building muscles. In any case, pausing to plan and staying focused on short term execution will yield better results than simply carrying on and hoping for the best.