The stronger your business is, the more you stand to lose. Here's a helpful approach to making sure your business is bulletproof. Q: I'm up late at night wondering what could sink my business. How can I know where I'm vulnerable? -- Chris G., New York ...
Here's how to spot hidden weaknesses within your operation and steel yourself for unexpected battles.
March 16, 2018 4 min read
This story appears in the March 2018 issue of Entrepreneur. Subscribe »
The stronger your business is, the more you stand to lose. Here's a helpful approach to making sure your business is bulletproof.
Q: I’m up late at night wondering what could sink my business. How can I know where I’m vulnerable? -- Chris G., New York
Chris, let me tell you what you don’t want to happen. About a year ago, I had a cancer scare. I was sick for more than 70 days, and I watched my business turn upside down. Decision-making slowed to a halt, and every inefficiency was magnified. Did we weather the storm? Yes. But it served as a reminder that as an entrepreneur, there’s no such thing as too much preparation.
Related: By Failing to Prepare, You Are Indeed Preparing to Fail
That’s why we’d built stress tests into our business, and it’s a part of the services we offer for our consulting clients. While we had thought of many ways to plug vulnerabilities, my illness helped inspire us to create an additional line of defense. The following questions will help you identify the scenario that could crush your business -- and in turn, point you toward a strategy to keep your business going strong, no matter what.
Related: How to Discover the Stronger Side of Your Vulnerability
Stress test 1: What happens if everything goes right?
Not all stress tests are negative. Rapid growth can be the kiss of death. Let’s say your business does 10 sales per day. What would happen if you had 100 orders to fulfill? Or 1,000?
We created this test for a client, a high-end fitness facility called Resilience Code. They offer medical services and a concierge approach to wellness. We asked, “What if 50 people wanted to sign up tomorrow?” The answer was, about 45 would go home very upset. That was a problem -- one that required a new sales system that could handle inbound interest and create a better first touchpoint for potential clients.
Stress test 2: If I remove one piece that’s central to the functionality of my business, what happens?
Businesses are machines. The components are people, systems and technology. If a door falls off your car, it will suck, but you can still drive. You can’t say the same if your engine blows up. In business, know what components are the doors and what is the engine.
Imagine a valuable supplier shuts down. Or an employee quits without warning. Or -- like I encountered -- you get sick and can’t do anything. Analyze the question and emphasize the functionality of your business and day-to-day operations. Create fail-safes to keep it all running.
Related: The 8 Biggest Challenges for New Entrepreneurs
Stress test 3: Is my business valued?
You know what stinks, Chris? Not knowing if your buyers love what you have to offer. Lots of people do market research, but not enough survey their actual customers. Be in constant contact with yours. On a scale of 1 to 10, how much did you love the service? Would you tell someone else to purchase? If you could change anything, what would it be?
Oftentimes, customers will help you see the barriers between your business and growth. Communicating with them will help you understand how you can do your job better.
Related: 4 Simple Ways to Communicate Better With Your Customers
Stress test 4: What’s the worst that could happen?
We learned this one from our client Tim Ferriss. Create your nightmare scenario -- then figure out how to rebuild. Just as important, think about how you can preemptively lessen the damage. If you’re in a product-based industry, what happens if you lose all your inventory? What’s your backup? How will you interact with customers? Any situation will seem tame after this drill.
These stress tests are scary, I know. But when done right, they improve your infrastructure -- and help you sleep soundly at night.
Growth Strategies,Mistakes,Problem Solving,Project Grow,Grow Your Business,Challenges,Success and Failures