Plan For The Worst... Hope For The Best

Dan Kennedy has introduced me to a lot of my favourite sayings, like "Fail quick". Two words that have saved me several thousands of pounds chasing after loosing ideas.

But one saying I heard from him first, that really effects my day to day decisions, is "Plan for the worst, hope for the best".

How many of us setup a website. Calculate the cost, calculate the time it took to make and then look at the profit and think "Well, this is the first one I did, I am sure I will get better at this, lets imagine I didn't make £100/month, lets say I make £300/month for each site, then this could be really profitable" You then go away and and scribble the figures down with pen and paper (old scool) or do a funky formula filled spreadsheet with your profected sales. A quick jott up or autosum button later, your a millionaire on paper?

I know I am guilty of this, and I am sure a few people reading this also know what I am talking about.

In order to succeed, you need to have realistic expectations. This isn't just good planning, but its also good psycologically. If you are always falling short of your targets, and never coming any where near your goals, this can effect you very adversely. In other words, a small success can help you a lot more than a big failure!

I have sold millions of pounds worth of information products in a non-IM related niche. Last year I lost this business because I looked at my figures and did exactly this. I thought to myself, "Hell, I can get each of my sales guys averages up by 10%, I can reduce my leads cost by 10%, and while I am at it I will setup a few new revenue streams as well". Of course it didn't help getting a tax inspection, but never the less, I forgot the golden mantra "Plan for the worst"!!

So why this lengthy post? Well, what made me the success in the first place was this simple formula

1. Create a test. Do a proof of concept on a small scale, give it a test and see exactly how much money it costs you (time included), and how much it makes.

2. Create a profit projection. Allow a decent margin of error and make plans with modest figures. If the margin is too tight, either go back to the testing phase to try and adjust the figures in your favour or consider moving on. Never get caught in the trap of fudging over figures you have no real data for and expecting the best to happen. In practise things are generally a lot harder than in theory.

3. Create systems that help you achieve your goal on a larger scale. The biggest pitfall in this line of work is getting crippled with administration in the middle of an expansion. Use flow charts and detailed step by step plans to thoroughly work out the day to day work that needs to be done so that you can keep on schedule and within your projections.

4. Constantly review your data and don't be frightened to walk away if things are going bad. I have seen too many friends fall in love with their own product and end up running themselves into financial ruin just to keep their dream alive, when in truth it is failing and needs to be abandoned.

"Plan for the worst" sounds negative, but I can assure you that it has kept me in check over the years. If I look at my failures it is usually because I over estimated the return and didn't allow for a proper margin of error, or go through steps to get hold of the correct data before commiting to a plan.

Anyway, been thinking about things today as I get ready to launch my new company, and that is something that has been going through my mind so I thought I would share. Hope it helps someone.