Riding a rollercoaster is one of the best metaphors for business (and life) I can think of. Unpredictable. Scary. Exhausting. Exhilarating. Interminable (at least it feels that way during the 90 seconds or so that you are in motion).
There is one key difference that ultimately determines success or failure. When you climb into a rollercoaster car, you relinquish full control. The safety apparatus comes down across your torso and you begin your ascent up an endless incline. Then come the ups and downs that seem to go on forever as you hang on tight.
When you are in business, you can't always control the peaks and valleys, but you have the opportunity to control how you deal with those peaks and valleys, which can determine how your ride proceeds. You have a better chance of staying grounded than when riding a real rollercoaster such as Kingda Ka in New Jersey, which stands a dizzying 456 feet (139 m) tall.
Here are seven tips for staying grounded when riding the business rollercoaster.
#1: Have a contingency plan: Ensure that you have a business plan that contains contingency strategies to factor in external events beyond your control that could put stress on your business. These contingencies would help you adapt or tweak your approach to remain competitive in the face of advances in the marketplace, increase or reduce output to meet changing consumer responses to your product category, or withdraw your product from the marketplace in the event of negative category publicity or legislation that could damage your corporate brand.
#2: Celebrate the wins, big or small: Take your wins when you can and avoid worrying about unexpected future downturns that are beyond your control. Like being on a vacation, enjoy the sunny weather and don't fret about the possibility of storm clouds rolling in at the end of the week.
#3: Know the marketplace: Stay in close touch with your customers, prospects and competitors. As the philosopher Sun Tzu wrote in "The Art of War", "Keep your friends close but your enemies closer." Competitors need not be enemies -- staying on good and trusting terms with them can lead to surprising and mutually profitable partnering opportunities during sudden industry downturns -- or upturns.
Where clients are concerned, take on clients who understand the value you provide and willingly pay a fair price for it. Work only with those clients who will wholeheartedly commit to a partnership relationship. Communicating frequently with your clients may sound intuitive, but in fact many business owners take their best clients for granted as they devote much of their time to searching for new ones with fresh challenges and new budgets to offer. Experience has shown that it is expensive to replace a client, unless you have lineups in your virtual (or bricks and mortar) reception area.
#4: Forecasting is just an estimation tool: Forecasting is not fool proof and no amount of industry information or past customer spending patterns can spell out the future. Always leave yourself some wiggle room -- literally. For example, smart freight handlers avoid 100% occupancy in their warehouses to avoid the "blow-up" effect. This happens when there's no room to bring in new freight and it's hard to get existing freight out. They have no choice but to add extra space, usually at a premium that will eat into profits.
#5: Know your business goals: If you're going to expand your business, ensure it reflects your business plan. Before taking on new business, make sure it's the kind of business or client with which you are comfortable. Be sure to think about the long-term prospects of the company's industry and assess its past performance and ability to meet its financial obligations.
#6: Don't make knee-jerk reaction decisions: When you feel it's necessary to scale down, do it for the right reasons versus out of temporary panic. You have built your business based on your talent and passion, just like building a machine with the right parts. You don't want to dismantle it unless you've done everything you can to find other ways to profitably use it.
#7: Communicate consistently: Finally, communicate frequently with your team and let them know precisely the type of clients you want to work with. Sharing this information is essential to the success of your business but also to retaining employees. Most are more likely to remain loyal to you and your business if they experience a trusting and collaborative approach that makes them feel valued than to financial compensation, even in down times. Research confirms that the biggest reason employees will remain with you on the roller coaster ride is that they receive clarity about the future of the company.
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