Originally published on HuffPost Business:
Small business owners aren’t known for being great planners. That’s because small businesses tend to react more than they plan, or they created a plan 10 years ago and haven’t revisited it since. Such an approach may have worked well in the past, but today — in the aftermath of the global recession — the business world is different. Many small business owners are wondering what to do to sustain or regain their past success.
Believe it or not, there has never been as much opportunity for small businesses to create new products and services, as well as grow their companies, as there is today. Even though we are surrounded by a fog of bad news regarding the economy and a slow jobs recovery, there is a mountain of great opportunity right in front of us. We simply have to blow away the fog to see it. Planning — using the science of certainty — is the key to getting rid of the fog.
Over the course of my career, I have started six companies — three of which were national leaders in the first year. So I know what it’s like to start a small business and grow it rapidly. Here are the planning keys I used to be successful.
1. Start with certainty
Whenever I did business planning, I always started with certainty because strategy based on certainty has low risk and high reward. So in a world of uncertainty, the first step to planning is to ask yourself, “What am I certain about?”
Certainties fall into two categories: hard trends and soft trends. A hard trend is a projection based on measurable, tangible, and fully predictable facts, events, or objects. A soft trend is something you have the ability to change or influence. For example, saying that Baby Boomers are aging is a hard trend — it’s a definite certainty. But saying there won’t be enough doctors to treat aging Baby Boomers is a soft trend — it’s something people can control and choose to address or ignore. In other words, a hard trend is something that will happen: a future fact. A soft trend is something that might happen: a future maybe. Therefore, to begin your planning:
- • Make a list of all the hard trends that are taking place in your industry, so you know what you can be certain about. Eliminate from this list anything you are not certain is a hard trend.
- • Make a list of all the soft trends taking place in your industry, so you can see what you can change or influence.
- • Ask yourself: What do I know will happen in the next few weeks, months, and years? And how can I innovate to take advantage of what I now know for certain about the future?
You can use the power of certainty to identify, plan, and profit from future trends long before your competitors do. Just look at Apple, who accurately saw the trends of accelerating bandwidth, processing power, and high-capacity storage and harnessed them to create the megahits iPod, iTunes, iPhone, and iPad. Meanwhile, Polaroid, Kodak, and Motorola spent years clinging to analog models as their competitors triumphed by grasping the arrival of the digital age. Can small businesses see the future and profit from it as Apple did? Yes, but only when they start their plans with certainty.
Update: Gene Marks of the NY Times included a mention of the above article on his You’re the Boss blog.