*Last Updated May 19, 2022
If there is one thing we have all learned through the pandemic, it is this: uncertainty is an absolute certainty. Yes, COVID-19 was a disruption of epic proportions but the truth is, life is more unpredictable than we’d like to admit. We don’t know what’s going to happen in the future but we can count on change and the ambiguity that comes along with it, in our lives and in our businesses.
But despite not knowing what may come, you still have to make plans. For example, you have to guess what your inventory needs will be and how much labor you will require. Or whether you should pivot completely.
Forecasting for uncertainty isn’t easy, and it’s certainly nerve-wracking, but there are good and bad ways to go about it. I learned a couple of the don’ts the hard way: with abject failure. Yeah, a big ole belly flop in the pool when I’d been planning on a graceful dive. But, as they say, you can learn a lot from failure. I did. And you can learn a lot from my failure, too, you lucky devil.
Learn From My Failure When Forecasting For Uncertainty
About three years ago, Office Accomplice was kicking it. We were acquiring clients, bringing in revenue, and expanding the business. So I decided to add to our client offerings by providing HR services.
I was ready to grow and grow big! I hired an employee with HR experience—who wasn’t cheap—and a manager to oversee bookkeeping operations, freeing up my time so I could conduct business development. Sounds good, right?
What went wrong? In a word: everything.
The plan didn’t work. Not even a little. It was DOA. I had a full-time person on the payroll who didn’t have enough work to justify full-time hours. She also didn’t have the necessary sales experience (or desire) to woo clients. The bottom line, she didn’t bring in enough income to pay for her costs.
The bookkeeping manager was also a failure. How should I put this? She didn’t do her work. I don’t know what she was doing when I was paying her, but it wasn’t working on delighting Office Accomplice clients. We started to lose clients because she would not respond to their questions or concerns. I spent my time bailing water out of the boat.
After a few months, I made the hard decision to unwind from my mistakes. I had to fire two people in three weeks and decrease the HR part of my business to zero. It has taken two years to recover from the financial damage I did to my company.
I Made Assumptions (Without Realizing It)
In terms of forecasting for uncertainty, my crystal ball really let me down. In the years since, I have had a lot of time to think about why. Here are some of the things I realized:
- There was basically one narrow path to success that relied completely on the HR professional and on me to sell services. Unfortunately, when I encountered bandwidth issues, success was not possible.
- When I hired the HR person, I was not clear to her (or me) that I expected her to make sales and bring in clients. I didn’t realize it was an expectation until she didn’t meet it. More effective communication would have served us both well.
- I assumed the new management hire would jump in and be successful from Day 1. Instead, she was wildly unsuccessful, and we had not prepared for that contingency.
- HR is a different sales process than we had encountered before. However, I had assumed it would be the same.
- I only had a plan A. I needed plans B, C, and D so we could change direction to achieve success.
I Failed to be Honest About All the Variables
- Bringing in two more employees required a lot more management. I had small children and didn’t have the capacity to supervise two strangers. I had ignored these factors since they weren’t part of the business.
- I didn’t do the necessary research or forecasting for various possibilities. I should have broken my forecast into time-based (monthly) success metrics. Without that, I had no weekly measure of where the business was supposed to be.
- I took too long to realize it wasn’t working. Because I hadn’t set out benchmarks ahead of time, I didn’t realize it was time to throw in the towel.
Preparing for the Future
The early 2020’s have provided a perfect example of just what can go wrong – we’ve had a pandemic, murder hornets, and fire tornados. We’ve seen the end of a war and the beginning of another, three billionaires racing to space, and the pentagon admitting that UFOs are actually a thing. The unidentified flying object could have booted out an actual green alien and we wouldn’t have been surprised in the slightest.
If you’re starting a new business line or making other significant changes, spend time forecasting and breaking those forecasts into time-based milestones. And be honest about variables. What are all the things that could go wrong? What will you do if they happen?
Identify what failure will look like, so you can recognize it.
- Outline contingency plans. If plan A doesn’t work, what are plans B, C, and D? Know how you can pivot to the alternate method if necessary.
- Keep yourself accountable. Before starting, know how long you will give your new endeavor. What are the metrics for success or for calling it quits? Know when you will bail out and how you will move on.
- Have an exit strategy in mind. Knowing variables ahead of time helps make decisions when you’re in the mix.
And that’s how you forecast uncertainty. Frankly, it’s a good strategy for everything in your business right now—since pretty much everything is uncertain.
Making plans for your business? Contact Office Accomplice and find out how we can help.