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Let’s face the hard truth: We are never fully equipped with adequate information to predict — for sure — what will happen in the next couple of days. For businesses, this could be an interrupted cash flow when an investor pulls out of a deal. It could be a lockdown that stalls your plans to advertise your new brand at the next regional convention. Who knows?
When unexpected events happen, a business must adapt quickly or risk going under. Interestingly, the fate of a business — especially a startup — lies mainly on the shoulders of the founders.
How founders respond to unanticipated events varies. Some are reactive. Others are proactive. While the latter is better, we all have limits. Frequent exposure to the unknown can cause anxiety and other psychological strains that can be your business’s undoing.
How many unexpected and unpleasant events can you endure, and how quickly can you navigate through them? That’s a difficult question to answer, I know. Here are five ways that you can prepare yourself.
Related: How to Prepare for an Unexpected, Unwanted and Unwelcome Business Setback
1. Assess your capabilities objectively
As founders, you’ve had to wear many hats in your company. You’ve assumed the roles of HR, operations and even finance. You’ve developed skills you never knew you had the abilities for.
All these experiences can spark the belief that you’re single-handedly capable of handling anything that comes your way. Although this confidence in your abilities is good for entrepreneurs, it could lead to the Dunning-Kruger Effect, which is defined as “a cognitive bias whereby people with limited knowledge or competence in a given intellectual or social domain greatly overestimate their own knowledge or competence in that domain relative to objective criteria or to the performance of their peers or of people in general.”
Successful entrepreneurs have accurate knowledge of themselves and their capabilities. They also understand the people they work with and have great confidence in their abilities.
By quickly realizing that your capabilities are not suited for an unanticipated event, you will be better disposed to seek help from those that are better suited for the situation at hand.
2. Use “buffers”
Running a business is all about making plans, setting deadlines and pursuing them. Things don’t often go to plan, and deadlines are missed. These are quite expected, but at times, things may spiral in the wrong direction, and chaos could ensue.
To avoid chaos, founders need to keep their heads high and remain on top of the situation. One way to do this is to create buffers.
You can start by surrounding yourself with social buffers — familiar individuals that make you feel very comfortable. These could be family members, buddies or close colleagues. Having them around when events take a wrong turn can reduce your chances of acting impulsively out of anxiety or fear.
Time buffers are very helpful, too. When the unexpected happens, business operations are expected to continue. As you set deadlines, you should consider increasing the timeline of each milestone by about 20%. This will provide enough time to navigate unexpected events without threatening upcoming processes.
Related: 4 Ways to Make Sure Your Business Survives the Unexpected
3. Maintain a healthy network
When quick, unpredicted market changes threaten business survival, founders often seek assistance from outside their organization. Most times, founders seek out other founders in similar situations to help themselves figure things out.
Many M&A deals during the Dot Com bubble burst — one of the most challenging times in our recent economic history — happened between founders within the same network. The relationship between Elon Musk and Peter Thiel is a typical example.
Your network may not be there for only M&A opportunities. Sometimes, you need to assess your direction against theirs from time to time. If your industry is volatile and moving in a new unforeseen direction, it will do you a lot of good to know how your colleagues are going about it.
4. Always look at the big picture
Founders must recognize that unexpected events can be a good thing. It brings opportunities. Paradoxically, being fazed by the challenges that come with the unexpected can blind you to those opportunities.
It’s best to paint a big picture of your business. Clearly define your grand mission. And keep an open mind as to how that mission can be accomplished. Things don’t always have to work out the way you planned them. But they will work out.
Just like road trips, a wrong turn of events can make you reconsider your route. It could take a little longer to reach the destination. As long as you have a clear big picture, you will be more likely to stay in control of the situation.
Related: 4 Ways to Prepare Now so Your Business Survives the Unexpected Later
5. Finally, practice willful acceptance
Unpredicted changes in your business or industry may create new challenges. Sometimes, we are required to solve these challenges. But what can you do if you neither have the capabilities nor resources to solve them?
You can simply accept the issue and commit to other things within your resources and capabilities. Studies have shown that acceptance and commitment can reduce your chances of acting anxiously when you’re fazed by a fortuitous event.
Also, the challenges created by the occurrence of these events may not be yours to solve, even though you have the skills and resources. You have to accept this, too.
Founders must learn to use resources efficiently. If there is an already existing solution that could be creatively used to solve a problem, you should try that out first before committing to creating a solution. This will save you lots of time and resources.
