"Hope springs eternal" were the words Alexander Pope used to glorify the promise of an afterlife. Where business is concerned, hope springs off a cliff. Below there might be rocks or a refreshing pool of water. It is of no use for an entrepreneur to hope that sales will increase, or employees will come to work on time, or production will complete enough units. The contrary could just as easily happen, and according to Murphy's Law, usually does.
A business owner's time is better spent preparing for the inevitable. Here are a few things that are inevitable: The economy will rise and fall. Products become obsolete. Customers are fickle. Entrepreneurs die; many get old before they die. Employees can amaze and disappoint. Technology can solve and make problems.
Politicians exploit economic fluctuations. Why are entrepreneurs so passive about this absolute? We know that the economy will rise again; we must prepare for it. It's not wise to hire when income is down, but you should project what positions will be needed and start looking for professionals to fill them. You may need a new location. Now is the time to search for one. An increase in orders may require new technology; now is the time to determine what you will buy. Additionally, in good times we need to set money aside for the inevitable decline.
Every product or service has a finite lifespan. The hedge against declining sales is always innovation and improvement. Wherever there is money to be made, competition will emerge. Whether your product is competitive is irrelevant; it must be better. We've grown cotton in the valley for a 100 years. Who would have guessed that all the processors would relocate overseas, making our products more costly to produce and distribute? But that's what happened. Those who invested overseas won. Those who didn't, lost. Alternate investment is another reason to save money for a decline.
Customers have many choices. They are hard to keep, but every positive experience they have with your business creates a stronger bond. The entrepreneur must work so every customer interaction is positive. On the other hand, death is negative and many business owners deny that one day death will visit them. It is madness to imagine that you will live forever, so why not prepare your business and estate for the inevitable? You should also allocate time to develop your personal life.
The search for business balance includes the relationship between humanity and technology. Automation can improve many human functions and enhance business growth. For example, the use of bar-codes eliminates human input errors. An accounting program can facilitate bank reconciliation and expedite important management information. However, some processes stifle human creativity.
Knowing these inevitable occurrences can aid the entrepreneur to avoid imbalance. It is only rational to expend effort where we can predict a positive outcome.
-- Russ Allred, MBA, is a business consultant and author with Sunbelt Business Brokers & Advisors. These are his opinions, not necessarily those of The Californian.