Even the most optimistic of us know better than to coast in good times. Yes, there will be periods when the Dow is hitting new highs, unemployment is low and growth is happening, but none of these things can last forever.
There are changes that come with growth and momentum, just like there are changes that come with hard times. Regardless of the economic climate, there are always opportunities, risk and inevitabilities.
With this in mind, we are wise to pause and think about what could be ahead in the coming year, so as not to be caught off guard. Here are six things to have on your mental checklist:
1. SUPPLIERS (INCLUDING CURRENT AND FUTURE EMPLOYEES).
If you’re a business owner, you may be feeling good about your current situation. Your product or service may be in high demand, and you may have more revenue opportunities than you have time to pursue. Is the same thing true for the people and businesses who enable you to serve your clients? Are your suppliers working at full capacity as well? Do potential employees have more career opportunities? Can you count on them continuing to be as true to you as they’ve been in the past? Is it possible that they’ll prioritize new opportunities, raise prices or look for changes in the next year? If so, how will that affect you?
For employees specifically, are you giving them the support they deserve? Is morale good, and if not, how could it be improved?
Similarly, how satisfied are your customers? Are you serving them with the same level of care you gave them during leaner times? What can you be doing to maintain their loyalty in the coming year? How is your pipeline of new opportunities? How is your pricing and upselling strategy? Do you have a strong enough relationship and sufficient headroom with your clients to pass through increased costs or wages if necessary?
Now is also a worthwhile time to be taking a more wide-scale view of the inevitabilities of life we all face. Benjamin Franklin famously once said that nothing in the world is certain but death and taxes — but we rarely give those things much thought until we’re forced to. This might be a good year to think earlier than that.
If you were to die next year, what would happen to your business? What if your business partner died? Is your business’s organizational structure strong enough that it would continue to operate smoothly in your absence? Is there a buy-sell agreement in place that will help a surviving partner continue in the business? Is the funding in place to handle an eventual passing? Are the owners’ wills consistent with business goals?
Though many business owners probably don’t see it this way, the government is, in a sense, a “business partner” that takes a portion of every business’s income to fund public services. And our business partner has a history of changing its priorities every few years. Changes in tax law can change how you fund your business, and maybe spur you to consider growth investments in a different way. Whatever is ahead, it’s always worth investing energy in tax planning to get the most from our “partnership” with the IRS.
Even in the best times, sad and unexpected things happen. If you or a partner, supplier or key customer suffered a disability or was sidelined by a health condition, how would you respond? If an event 1,000 miles away spooked the markets, would you have a cushion? If the Internet went down, what would your backup plan be? Do you have protection against low-probability, high-impact events? Do you have diversification in your life, savings and business that can help balance the good and bad? Have you written down what worries you, so that you can work these issues with measured emotions?
Finally — at the risk of sounding like a fortune cookie —
What opportunities might lie ahead in the new year? Can we look at past situations and make an educated guess about the future?
“Moneyball” author Michael Lewis has published another book, “The Undoing Project,” in which he explores the mental process of our decision-making. His point: Although individual events are unpredictable, patterns of behavior tend to be highly predictable.
Although we don’t know exactly what the future will hold, we do know that something will happen. So as we prepare for new beginnings, my best advice is to keep our eyes open and prepare to take advantage of what’s next.