I don’t have a fallback plan. If something were to happen to my business, I don’t have a cushy job lined up somewhere. I don’t have a trust fund. I do have some skills and I doubt that I’d ever actually wind up going hungry, but I don’t have a fallback plan.
For me, the lack of a fallback plan has helped to motivate me. Of course, I do have options, like embarking on a job search if I think I need to replace owning my own company with a paycheck and an employer. But those aren’t options I have any interest in taking. After I quit my last job, I came to the conclusion that things would have to be beyond dire to get me to take that route again. Not wanting to go back to being an employee has been a great motivator for me.
But What About You?
Just because I don’t have a fallback plan doesn’t mean that it may not make sense to make one for yourself. If you find that you work better knowing that you have some options if a new business venture doesn’t work out, then building a fallback plan can be very important. And while lining up a trust fund isn’t exactly easy, there are strategies that can make a transition a better option: something as simple as building a rainy day fund that you can fall back on if you need to cover the distance between closing a business and landing a new job. If you have a family depending on your ability to earn a living wage, you may not have an option beyond creating a fallback plan.
The only downside that is important to remember is that, if you feel too safe, you may not want to take risks. While it depends on the business and the business owner, many successful companies succeeded simply because there wasn’t another option. If failing isn’t an option, success is all that’s left. If you depend on your business to pay the bills, you’ll go out and spend the time necessary to build it up. It’s only when you have other options that it feels safe to slack off. Think about how many business owners with alternate sources of income (from spouses to inheritance) start and sputter.
Fallback Plans and Exit Strategies
It’s worth noting that a fallback plan and an exit strategy are two very different things, at least in my mind. There are certain parts of my business that I plan to spin off as the company grows. I’ve even sat down and thought about what I might do in certain situations, from the best case — where someone wants to hand me a big stack of money for my business — to the worst — where my business is losing money faster than I can earn more. I have plans in place to allow me to handle those situations just fine. But I don’t have a fallback plan. No matter what happens, I see my only option as making my business work.
Image by Flickr user tnarik
Google+Web.com is now offering forums designed to support small businesses in cities throughout the US. Learn more about these forums here: http://Businessforum.web.com/
Tags: exit strategy, fallback plan, plan b
Posted in Entrepreneurs | 1 Comment »
