Unless you are psychic, a crystal ball or some measure of a superpower will not predict when your business plan will encounter threats or obstacles. Conversely, a good business plan can help you find the will to change, providing a pathway to surviving challenges, and discovering new opportunities. In Need to Make a Change? Do It Immediately!, Entrepreneur Magazine’s editor in chief Jason Feifer shares why we should be proactive about change. Here are a few noteworthy excerpts:
Change will come to every business, but there’s an irony to it: The best time to embrace change is when you see it coming from far away — when you still have time to plan, and when you aren’t hurting. But that’s also the hardest time to change. Why leave something that’s still working? Why invite the pain?
This is why of all the entrepreneurs I meet, I’m most struck by the ones who make change early. It sounds easy, but it is so hard in practice. For example, I think about Andy Monfried, the founder and CEO of Lotame. His company provided an ad buying service to advertising agencies, which earned $30 million in annual revenue. But after a few years, three agencies told Andy they were moving on. “I can’t give you any more money,” he remembers them saying. “We’re building what you’re doing at our agency.”
Andy realized he was in trouble. His company was still profitable, but change was coming. He’d eventually be outmoded. In response, he planned to shut down his advertising business and pivot to a new one involving data — but one of his investors balked. Why close a profitable business? Why not use it as a cash cow, and let it die a slow death while building the next thing? But Andy disagreed. “Cash cows are the death of a business,” he told me, “because you can never starve a cash cow. Needs and resources will always gravitate toward it. So you’re better off to amputate.”
That’s what he did. He laid off half his company, used the remaining team to reinvent Lotame, and then built it back up as a data company that serves a completely different clientele. “It was an emotional experience, and I had doubts all the way through,” he admits. But he knew it was his only choice. Today, he’s been proven right: Lotame is bringing in far more than the $30 million in revenue he once sacrificed. By acting early, Andy saved his company.
This is what it means to be proactive. We can’t wait for change; we have to be the change. And yes, we’ll create some anguish along the way. We might feel crazy and risky and reckless. But we’re ultimately inviting short-term pain for long-term gain — which, frankly, is far better than the alternative.
Read the full article at entrepreneur.com.
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