Start playing defence in your business

Every year, a total of 380 matches take place in the Premier League.

And if you’ve watched even a handful of them, you’ll have noticed one constant…

The best teams don’t win simply by playing offence. They play very strong defence too.

They win because they’re not just thinking about getting the ball into their opponents’ goal. They’re also thinking about how to prevent the other team from scoring, protecting their goal and managing risks.

It’s really the same in business…

You have to balance progress and growth with measures to avoid or minimise losses, in order to create a sustainable company.

Winning companies don’t just attack. They also avoid unforced errors and plan carefully in case their assumptions prove overly optimistic – or things go wrong.

Now, in “normal” times, this balance often tilts far too far in one direction…

In our business culture, we constantly focus on “growth”. It’s what every business coach and every entrepreneur lives and breathes…

We very rarely talk about managing risk, which is – let’s face it – a lot less exciting. And it’s not well understood by many organisations.

But right now, the economic environment is very uncertain.

We’re still emerging from the pandemic. And on top of that you have the war in Ukraine, the rise in interest rates, taxes and inflation, the labour shortages in some industries and a widespread pressure on prices.

All this adds up to a lot of potential upheaval and disruption, which could easily affect every business in the country – yours included – in various negative ways.

And that means that we have to shift the balance immediately.

When it comes to planning your financial future, it’s time to start prioritising defence over offence.

In other words, you need to look very urgently at what might go wrong for your company financially over the next few months…

…And start figuring out how you’re going to reduce those risks – or deal with those situations if they come to pass.

You must protect what you have first. Under current circumstances, that’s also a form of progress!

I know that it’s a mindset shift that takes some getting used to. We are not used to thinking this way.

The problem is, a financial storm may be gathering. (I say “may” because that’s the nature of unpredictability – you never know what might happen – but that’s what all the signs are pointing to.)

Not preparing adequately is like going on a ship without lifeboats.

It’s very, very foolish.

And a mature, well-run company would never operate that way.

To be clear: I’m not saying not to plan for growth. Of course you should!

But right now, that plays second fiddle to ensuring you can survive whatever upheaval is coming our way.

This is not a negligible risk, however rosy things feel for you right now. We’ve already learned from Corona that sometimes the worst does happen. And even if it’s not the worst – just some nasty financial difficulties – it can make your life, and your employees’ lives, very miserable too.

So book a financial planning session in your diary right now with those who best understand your numbers and the commercial environment in which your company operates. And dedicate it to risk management.

If that’s something you’d like help with, call 01279 647 447 or email to get in touch with me today.

Financial planning for the future is at the core of what we do for our clients. We’d love to talk about how we can do this for you too.

Warmly,

Garry

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