I wrote a column on Wednesday about the decisions we, as Entrepreneurs, can make to improve our businesses. Today’s column is about the five outside threats we face where the only thing we can do is respond.
These are what’s known as the Five Externals, which include…
Government / Law – The government can pass restrictions on your products or services or ban them altogether by passing a law.
Morals / Style – Buyers are fickle. What happens when your offerings are no longer part of popular morality or maybe style changes for that season?
Competition – We can never predict what our competitors will do. but must always remain competitive to maintain our market share.
Technology – What happens if your business is radically altered or effectively shut down given technology changes?
Economy – Many businesses will do nothing but suffer from a bad economy.
These are all examples of decisions where an Entrepreneur can only respond to an outside threat.
Sometimes there are good choices to be made. Sometimes not.
Let me leave you with this…
One of the reasons I wanted to discuss the Entrepreneurial Decision Making Matrix was to break it down into its purest form. In studying the concept, many who have difficulties in this respect can improve their skills.
The other reason is to help entrepreneurs stop wasting time and precious resources by pushing a bad position. In order to explain, let’s use a few examples.
1 – What happens if the government passes a law or puts a restriction on your business making it impossible to turn a profit?
2 – What happens if you’re in the business of manufacturing pink parasols and this season, consumers only want to buy red ones?
3 – What happens if a new, major competitor enters your marketplace and sells similar products at half the cost making it impossible for you to earn a living?
4 – What happens if technology improves making your product or service obsolete?
5 – What happens if you’re selling a luxury item to middle class buyers and the economy tanks making it impossible for your buyers to make purchases?
These are impossibly difficult decisions to make. You’ve spent years building infrastructure and a client base. You’ve invested your life savings doing this and one of these external factors rolls in and hits you like a brick.
What do you do? Do you continue to push a bad position or do you pivot?
I’ve seen situations where continuing on in the same fashion did nothing but drive those entrepreneurs into bankruptcy. I’ve seen others where they were able to tweak their offerings and save the overall business, but one thing is certain.
Sticking your head in the sand and waiting for the threat to pass is not an option. A decision must be made.
If your decision is to pivot into something new, then it’s always easier to start a new business out of an existing one. If, on the other hand, your decision is to tweak your existing offerings, then get to it already.
Either way, one thing is certain.
Sooner is always better than later. A good plan today generally beats a perfect plan tomorrow.
We’re all going to face a significant number of changes in the coming months. Some may be great, while others may be terrible.
But either way, we’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
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