Here's Why You Need to Stop Worrying About the Worst-Case Scenario

entrepreneur.com

70 NEWS JAPAN - The lack of well thought out contingency planning in the examples above is obvious. But as an entrepreneur, it’s something I can relate to.

Recently, my father-in-law and I were driving along New York’s West Side Highway. I had 20 minutes to get to the NY Department of Motor Vehicles before they closed. My daughter’s car needed to get registered before she left for school that weekend. Typical of most Fridays in the city, traffic choked the roadways. My hands were tight on the steering wheel as I maneuvered between cars.

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I made it to the DMV that day -- by about 20 seconds. But the answer I gave to my father-in-law is typical of an entrepreneur. Cocky and sure, enamored with our ideas, most of us don’t ever contemplate the possibility of failure.

Yet, businesses with staying power need to have contingency plans. The right kind, ones that work, better than the ones described above. Things going wrong aren’t a matter of if: They’re a matter of when. A storm could flood your office. A fire could wipe out your warehouse. Hackers could steal sensitive customer data. Key executives can quit, or worse, leave with intellectual property.

While proper contingency planning is critical for business, it goes against most entrepreneurs’ DNA to focus on the downside. It takes critical mental energy away from visualizing success.

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After much painful experience, the conclusion I’ve come to is this: Every company needs someone to prepare for those worst-case scenarios. But that person should most definitely NOT be the entrepreneur. Forward thinking, creative and boundlessly optimistic, a company’s founder is often best positioned to do the tasks that propel a company towards success. Defending against potential threats and downsides is a distraction. It’s time and energy not spent on winning. So, delegate it.

When our company went through one of its early capital raises, the process took longer than expected. I had turned down an investment offer because the terms weren’t favorable enough, even though our coffers were dangerously low. I believed it was only a matter of time before we would find the right investor who was willing to be a fair partner. In the meantime, our CFO secured a bank line of credit. We never needed it, but I was grateful that someone created a safety net in case I was wrong.