Woman Business Owners: 2022 A Year of Cautious Optimism?
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“There are things we know we know.
We also know there are known unknowns; we know there are some things we do not know.
But there are also unknown unknowns—the things we don’t know we don’t know.
And … it is the latter category that tends to be the difficult ones.” Donald Rumsfeld
By nature, entrepreneurs are optimistic; they see problems as opportunities. That’s what keeps us going, and it’s definitely what kept us going during the unprecedented past two years. You’ve probably heard of the “Great Resignation,” describing the large number of workers who have re-thought their careers since the pandemic and decided to leave their jobs.
I’ve been thinking of this period as “The Great Pause.” Business owners (most of us anyway) were forced into a time out for their business that lasted for months – for some, going on two years now. You couldn’t grow your business through networking events. You couldn’t make in-person calls on your customers. You had to think of new ways to do business, to deliver your product, maybe even think up whole new lines of business or change your business model to survive.
So now it’s 2022. We have been in a holding pattern for months now, and we’re ready to break out and do what we do best – take risks and grow. Here’s why we’re recommending cautious optimism as the right approach for this year.
First, the things we know. We know that there’s a labor shortage in every industry. Even if you have everything in place to grow or scale your business, you will probably struggle to find the right talent you need. (And you’ll have to pay more for it.)
We also know that the supply chain is in real trouble. Companies like Amazon have the resources to buy their own fleet of container ships, cargo planes, and of course, trucks, so many consumers have a sense that there’s no real supply chain crisis. But we think that’s given us a false sense of security, and we’ll almost certainly see shortages again this year. And your business will almost certainly have challenges – the cost of materials and transportation will increase dramatically, when and if they’re available. Wait times for both will also increase.
Consumer behavior is one of the known unknowns. Consumer spending ground to a halt in 2020, then shifted to online purchasing, then broke out into an exuberant spending spree in 2021. Global Supply chain issues, covid spikes, and general economic uncertainty are pointing to a change in behavior again this year. We just don’t know when – or how it will affect your business.
The unknown unknowns consist of all the things we don’t see coming, including developments with funny names like Omicron or (Hurricane) Earl.
So we’re telling all our clients that this is the year to figure out what the right pace of growth and scale is for your business. In case you have heard those terms used interchangeably, here’s the difference. In general, we think of growth in linear terms: It’s when a company adds new resources (capital, people, or technology) to meet a need, and its revenue increases as a result.
Scaling is when revenue increases without a substantial increase in resources. Processes that “scale” are those that can create a large impact without extra investment in resources. When you have all the infrastructure and resources your company needs, you can touch many more customers with a small effort. Whether you send a marketing email to 10 people or 10 million, your effort is essentially the same – but you may sell exponentially more products or services.
Knowing the difference is key to the health of your business. Doing the wrong activities will hurt your business while in the moment they seem right.
To figure out the right pace, you need 3 key things:
- Know your lane: are you growing or should you be scaling?
- Your strategy: based on the lane you are in the strategy is different
- Your Goals: Your lane and your strategy determine your goals
Once you have those decided you can identify the PACE you need to be at to get large gains no matter what the business environment is. It is important to do this now. Set the pace for yourself and your business in a way that you can handle if changes need to be made. Change cannot be a surprise anymore.
In future posts, we’ll help you convert that cautious optimism into real actions you can take in your business while creating the ideal work-life balance.