How to Build a Backup Business Plan
Things can change quickly in the entrepreneurial world and it’s important for you to be able to adapt quickly. Nobody goes into business expecting for their entrepreneurial venture to fail. The very idea violates everything that the entrepreneurial mindset stands for, which doesn’t change the fact that 92 percent of startups fail. It’s because of these unkind statistics that it’s important for every entrepreneur to be realistic about their chances for success and develop alternative strategies to ensure the success and longevity of their business. Here’s how to build a backup plan in case your business needs to take a quick 360.
A backup plan isn’t an alternative to running the business. The backup plan isn’t a second choice to the business you are running, meaning that going back to your day job isn’t a backup plan for your entrepreneurial starting. A backup plan is intended to protect the essential elements of your business from risk and uncertainty and to ensure that those elements keep generating income if something goes wrong.
Even you need a backup plan. Entrepreneurs are often self-centered and confident by nature but it also makes them a point of risk in their own entrepreneurial venture. If they are so essential to the business that they can’t even take a day off for fear of the enterprise crumbling, then they are a problem and not an asset. Good leadership necessitates effective delegation.
Back up your revenue stream. Diversification doesn’t necessitate a lack of focus. If your company is making a healthy profit, it’s worth investing some of the money elsewhere as a way of making even more money but also to hedge any potential losses from your entrepreneurial venture.
Back up your suppliers. One benefit of competition is that it makes the prices of goods cheaper. If your startup relies on only one supplier, it leaves you at their mercy. If they decide to hike their prices or worse, go out of business, they could leave your business high and dry. If you have different suppliers, you can always alternate between them to get the best deal. Relying on only one supplier is really only a good idea if you’re getting incredibly favorable rates or have a healthy, long-standing relationship. Regardless, it’s still a good idea to have an alternative supplier in your back pocket for the day that call becomes necessary.
Back up your records. Good record keeping is essential for any entrepreneurial venture. Not only does good record keeping help with budgeting, cash flow predictions and legal affairs, but it also offers ongoing lessons on how to run your business. Imagine the damage that would be done to your startup if all your records were lost. In the era of cloud computing, there’s no reason not to ensure that your records are kept safe all day every day.