January 23, 2013

Uncertain Times Call For Different "Rules"

What follows is a guest post from Donna Every, a financial advisor and author. Her latest book is her first novel, The Merger Mogul,” (www.donnaevery.com). While the target of her comments are entrepreneurs, i8t occured me that her points are equally valuable to those on a journey toward a satisfying retirement.


Savvy Entrepreneurs Play by Different Rules in Uncertain Times   

“The entrepreneurs who are successful during times of uncertainty are so because they don’t rely on the standard approaches they’d use in predictable times, and they look for opportunities – the positives -- in situations that would have been considered negatives five years ago,” Every says.

“It’s similar to how we deal with the weather. In places where it’s sunny most of the summer, we wouldn’t leave our house each morning packing coats and umbrellas just in case. The weather’s predictable. But in the winter and other seasons when the weather can quickly change, we head out with a different mindset.”

For businesses, switching gears to deal with inclement economic conditions involves adopting new perspectives and practices, she says.

“I incorporated some of these in ‘The Merger Mogul’ because it’s set during the recession and my protagonist, the mogul, had to adapt,” Every says. “He used many of the strategies I teach my business clients for thriving during economic uncertainty.”

What are some of those strategies?
• Build on what you have, not toward what you want: Instead of setting goals and then seeking out the resources you’ll need to meet them, assess what you have available and decide what you can achieve with that. This not only saves you the time and expense of pulling together resources you may not have, it also gives you the advantage of working from your business’s individual and unique strengths.

• Follow the Las Vegas rule: Tourists planning a weekend in Las Vegas will often set aside the amount of money they’re willing to gamble – and lose -- on cards or the slots. That way, they won’t lose more than they can afford. During an uncertain economy, entrepreneurs should calculate their risks the same way. Rather than going for the biggest opportunities as you would in prosperous times, look for the opportunities that won’t require as much of your resources. Calculate how much you can afford to lose, and always consider the worst-case scenario.

• Join hands and hearts: Competition is fine when things are going well, but when times are tough, you need allies. Explore forming partnerships with other entrepreneurs so you can strategize to create opportunities together. With what your partners bring to the table, you’ll have more strength and new options to work with.

• Capitalize on the unexpected: Surprises can have positive outcomes if you handle them nimbly by finding ways to use them to your advantage. Instead of planning damage control for the next unexpected contingency, look at it as an opportunity. Get creative as you look for the positives it presents.

• When life is unpredictable, don’t try to forecast: Focus on what you can do and create now rather than what you can expect based on what happened in the past. In good times, that information can be a helpful and reliable way to make predictions, but savvy entrepreneurs don’t count on that in uncertain times.

“While the U.S. economy certainly is improving, there’s still too much uncertainty both here and abroad to go back to the old ways of doing business just yet,” Every says.
“If you’ve survived the past five years, you’ve probably been relying on many of these strategies – maybe without even realizing it,” she says. “Don’t abandon them yet, and if there are some here you aren’t using, work toward incorporating them, too.”
 
Donna Every is director of Arise Consulting Inc., a company that offers business training, and consulting services. She can be contacted at donnaevery@sunbeach.net.
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There isn't a point she makes that can't apply to building a successful retirement. Read them from your unique perspective and see if you don't agree.

5 comments:

  1. I especially liked "Build on what you have, not toward what you want".

    Several years ago when I was interviewing Financial Advisors they continually asked me "What sort of lifestyle do you want in retirement?" which always struck me as a silly question. My response to them was "Have you ever seen that show Lifestyles of the Rich & Famous? If I get to choose, I pick a retirement lifestyle like that."

    Of course very few of us get to choose "Rich & Famous". The fact of the matter is that we need to make sensible choices with the resources we have and see where we end up. If you do the right things you'll probably be okay but there'll be a lot of twists and turns along the way.

    Which kind of goes along with the last point "Life is unpredictable, don’t try to forecast". We all try but it never goes 100% the way you think it will and you've got to play the hand you're dealt.

    It's just the way life is.
    - David

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    1. Certainly from a retirement perspective, I have been much happier since I built my life around what I have now. My life isn't what I pictured almost 12 years ago when I took my last paycheck...it is so much better. Different but better.

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  2. I almost didn't read this because of the target audience of entrepreneurs. But you were right (again)! This is a great post for all of us. It confirmed some of the contrary-to-conventional-wisdom choices I've made in the past year or two. Thanks for sharing this great advice.

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    1. I had the same reaction when the post was submitted to me. But, it quickly became obvious that the points applied to more than just entrepreneurs. I'm glad I didn't dump it in the trash!

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  3. We had a long conversation over the holidays with our kids.
    "Follow the Las Vegas rule" was the highlight.
    In Vegas I usually win and then my hubby promptly loses it all for us.
    When he said we are not gambling we joined hearts and hands
    With a few other family members and did not join this last bull market.
    Sometimes sleep is more important than risk.
    Excellent post.
    I, too am glad it did not end up in the trash.

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