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Creating Your Plan B
Having a Plan B gives business owners a way forward during times of uncertainty. It is not a policy executed only when trouble comes. Instead, it represents a secondary source of income using the existing resources of the company. One that can continue if the original plan is no longer feasible.
This concept was used by Coors Brewing Company to survive prohibition. IBM created a Plan B during the 1990s and are operating under it today. Amazon’s Plan B made over $200 billion in revenue last year. However, most companies fail to implement an effective one.
An effective Plan B has three criteria:
- It must operate under a separate set of business risks
- It must not interfere with the existing business
- It must be able to stand on its own if required
The most important aspect of a good Plan B for small business is to keep it simple. If it requires more than a few hours from employees to implement, then it is probably not a good idea.
Costly Mistakes
When I met Mark he was a fund manager concerned with competing against the large banks. At the time, it was becoming hard for small funds to attract new investors. Worried about the future, he wanted to protect the business from this uncertainty.
