With March Madness upon us, you may wonder whether your business was prepared to bear two of the least productive days of the year.
Typical P&L statements for March give the appearance of two less working days in the month. Some things in business are simply unavoidable and the excitement from employees about the March tournament is one of them. Year after year, regardless of the size of your business, or industry and niche, your employees will always find a way to catch the games and trying to prevent them from doing so only hurts morale.
Instead, consider those two days an investment in company morale and focus on the more important question:
Are you running your business with the same strategy as your March Madness bracket?
Those with some understanding of college basketball will undoubtedly make a handful of educated picks. Others will use a strategy of random selection. Some choose the typical favorites (See Duke, Kansas) while others pick the underdogs (See Harvard and Florida Gulf Coast). Many opt for a combination of the two. Then there is the self-proclaimed expert who spent the four days leading up to the opening round analyzing critical variables of each team (e.g., RPI, strength of schedule, tournament experience) only to see their bracket crushed at the midway point of the first day by someone who completed their bracket just moments before tipoff.
I protect my clients from running their business without a long term strategy in place. During legal consultations in March, I offer these three simple rules:
1. Don’t Ignore the “Chalk”
The “chalk,” a term originating in the old days of horse-racing when odds makers still used blackboards, refers to a simple concept – Bet on the favorite.
Though it may seem like simple advice to follow, too often business owners fail to consider the appropriate fundamentals of their business and instead bet on blind faith that the mid-major underdog will increase their profit. That may work for the winner of your office pool, or for the students of Florida Gulf Coast (for a few rounds at least), but it won’t work for your business.
As a small business owner, you must develop the habit of routinely reviewing your “picks” and checking their fundamentals.
- Are your employees productive in terms that make sense to your business?
- Do you have a system for tracking leads and nurturing prospects?
- What is your plan for developing new business both during and after work hours?
- Are your vendors the best fit for your budget and your desired outcomes?
- Is that new marketing plan producing a solid ROI in a reasonable time-frame?
- Does your business rely too heavily on its biggest customers?
- Do any of your tactics pose an unreasonable risk?
Make it a habit to ask yourself these questions. Ask your trusted advisors and your most objective employees. Seek influence from new sources. Assess the fundamentals of your business and don’t leave your long-term success to chance.
The underdogs may be exciting and fresh for a few rounds, but they rarely last. This can be a losing business strategy for any small business owner.
2. Ignore the “Chalk”… sometimes
I know what I just said. If you want to play it safe with a “good” business, yes – follow the chalk. Each year, you’ll work the necessary hours to make enough money to pay the required bills, and then you’ll do it again the next year. But was this the freedom and flexibility you sought when you made the leap to start your own business?
You can’t win by picking the #1 seeds every time. Sometimes the stats don’t produce results. Extraordinary business outcomes, like March Madness, require a little more strategy and foresight, as well as a healthy dose of tolerable risk.
- Seek the input of somebody new – they may provide fresh insight.
- Take some calculated risks when and where possible.
- Move outside your comfort zone and try a new marketing technique
- Choose a new vendor who can offer case studies proving results.
The business landscape is constantly changing and you must adapt. If you place too much emphasis on the favorites, you might miss picking the next upset.
3. Go With Your Gut
If you have a feeling, go with it. If a team seems overrated because of hype, they probably are. If a team seems under-appreciated, they may be. Trust your intuition. We ignore it all too often, and as a result find ourselves and the business in trouble. If a deal seems too good to be true, it probably is – but if the potential benefits far outweigh the identified risks, maybe this is the year to take the gamble.
As a business owner you have to be flexible. You must rely on the fundamentals, but not completely – sometimes momentum will take you further. Consider input from divergent sources, trust yourself, manage your expectations against your budget, and leave room to take some risk. Put that 9 seed in the Final Four. Sometimes you might just be pleasantly surprised.
John Masnica is President and founder of Tailored Legal, a law firm committed to small business and family representation in San Diego and North County. Committed to ensuring business owners thrive, John represents them in all aspects of their businesses and during all stages of the business life cycle. He also helps business owners and families to plan for their future through the use of wills, trusts, and other estate planning tools.