I have not written about a golf metaphor for entrepreneurship in quite a while, but the US Open from this past weekend offered an important lesson.
No matter how good you are or how well you prepare, there are certain things that can happen that are totally outside of your control. The golfers who got the bad end of the weather this past weekend at the US Open experienced this first hand. Some of the golfers played their early rounds in constant rain and windy weather. Others, due to their tee times, played with little or no rain — just a soft and receptive course awaited them after the rains ended.
Was this fair? That is not the point. It is, as they say, what it is.
I tell my students that we can help them manage about 80% of the causes for failure in their businesses.
About 40% of failure happens because the entrepreneur jumped into a business that was doomed from the start. They did not properly assess the opportunity prior to launch. Rather, they impulsively moved ahead with little forethought.
About 40% of failure happens because the entrepreneur is not ready for success once it happens. Growth is a dangerous time for a small business — just ask any banker. If you are not prepared to properly manage and develop your business as it grows, you will soon join the legions of entrepreneurs who failed due to their own success. They did not create the systems, grow the team, or secure the resources necessary to deal with the growing pains that sink so many promising ventures. We try to prepare our students with the skills and knowledge to manage their growing ventures successfully.
But then there is that other 20% of business failure. This failure comes from what you cannot predict nor plan for. Call it uncertainty, risk, or just bad luck. Sometimes things happen to even the most skilled and prepared entrepreneurs that are totally outside of their ability to manage.
My favorite example of this is an old diet supplement that used to be on the market — it was called Ayds. The product was growing nicely until a deadly disease with the same sounding name crept into our consciousness — AIDS. The sales of the product plummeted. The spread of a deadly disease with a similar sounding name is nothing that could have been predicted, and there was very little they could do to adjust in time once people stopped buying the product.
This is why I put the Serenity Prayer, or as I call it the Entrepreneurs’ Prayer at the end of most of my syllabi for my classes:
GOD, GRANT ME THE SERENITY
TO ACCEPT THOSE I CANNOT CHANGE,
THE COURAGE TO CHANGE THE THINGS I CAN,
AND THE WISDOM TO KNOW THE DIFFERENCE
I completely agree that there are things that happen that we cannot predict. For those 20% that face these situations, it can be tough to see their dream die.
However, I think that it is important to point out a couple of factors that I feel are key for success.
First, EDUCATION, EDUCATION, EDUCATION. It is important to educate yourself before starting a business. Talk to people, learn about the environment that you are entering, take some courses, etc. Education raises your chance for success from just over 50% to 80-90%. My only caution on this point would be: don’t use a lack of education as a barrier.
Another important aspect (that you would hopefully learn as a part of your education) is to BE PREPARED. The more scenarios that you have considered, the better shape you will be in. Know the demand trends and PREPARE for slower times. Have ideas about how to deal with things that might happen or how to deal with less cash. This may require re-evaluating expenses and how to cut expenses. Or, you might have a few cheap, creative ideas for drawing in new customers in slower times.
While you can’t eliminate all risk, knowledge and planning can certainly help.