March 24th - Petes Weekly Business Idea

Shared with a bunch of Business Owning Heroes this week.

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Mental simulation... Before you get to pilot  a commercial aircraft with hundreds of passengers on board, you need a little bit of experience. Of course, you need some technical skill as well - and your pilot's licence is proof of that - but you need experience.

And pilots face the same challenges getting that experience that we do when we are young. To get experience flying a commercial aircraft - you need to fly one. But nobody on earth wants to offer that first flight to an inexperienced pilot. Catch 22.

By now I know you're already saying to yourself - this Carruthers fellow is not the brightest bauble on the chandelier - everyone knows that each pilot spends hundreds of hours in a simulator before being allowed to fly the aircraft. By the time the pilot flies, he [or she] has 'experienced' almost every conceivable thing that can go wrong in an airplane - in the simulator. By the time the pilot is unleashed on the general population she [or he] can instinctively respond to virtually any situation. Wouldn't it be great if such a machine existed for us business owners? Even if it did, however, the huge diversity between our businesses would make it pretty difficult to cover every issue specific to ourselves.

In talking through some issues with someone buying a business this week, and seeing how many items had not been thought through carefully, it seemed wise

to talk about helping you set up your own personal business simulator - so that you too - like a pilot - can be prepared for everything that you might possibly face. When the brown stuff starts to fly, it seems to do so with massive and frantic abandon, coating everything in sight - and leaving precious little time to

take some Lomotil.

You see -each of us is an expert in our own problems. So why not develop a simulator that we can each individually use? Have you ever taught anyone

to drive? It's awfully challenging, isn't it? Not just the damage to the car - the shrieking engine before the clutch drops with a bang and the car goes from zero to 75kph in first gear before the aspirant driver panics and switches legs and the hits the brake and the car bounces to a shuddering halt and you get showered in the perspiration of this ashen-faced amateur who knows that you're about to explain, for the twelfth time, why you hate teaching kids to drive - but also the deep uncertainty and fear of the youngster facing this crucial test of economic freedom.

No driver's licence is a jail sentence in this wonderful country of ours that lacks quality transport services. I started teaching my 13 year old son to drive over the weekend. [On a quiet Calitzdorp farm road with no chance of other traffic, and because he has been pestering me since forever.]

His first effort was an astounding success. Put the safety belt on; push down the clutch; put the car into 1st gear; start the engine; press the accelerator until the engine is turning over at 2000 rpm; gently let the clutch out accelerating to 40kph; and steer this 1 ton steel beast, my boy. [After the harrowing earlier experiences with my other kid this was a walk in the park.]

The secret? Mike's personal driving simulator. This is how it works. He sat in the passenger seat until he understood that the engine and wheels revolve at different speeds - and his job was to use the gear lever and clutch to synchronise

them. Then he mentally worked through the above process with me [put the safety belt on; etc.] until he could tell me exactly what he was doing - in the correct sequence. That took about 5 minutes. By then he was confident he had it all taped. Only then did he move from the passenger seat into the

driver's seat. And voila -  a  perfect 1^st drive. [Of course, at 13 he still thinks I have a brain and might be sharing something of value. My 17 year old firmly believes that I have outlived my usefulness and have nothing further to contribute - except money. Fortunately for her she already knows everything.]

The bottom line – this mental simulation process is staggeringly powerful. Let's take a quick look  at your business for a moment. What will you do when your biggest client goes belly up owing you a huge amount of money? Without spending time in your mental simulator - chances are you are going to be like a salmon swimming upstream through a torrent of effluvium. You are going to hit panic mode and start damage control - call the lawyers, threaten everyone, extend the overdraft, enjoy the exciting 3am anxiety attacks that seem to arrive at

this time, etc. And then you will probably go out of business - because most of us slide on such a sharp economic razor blade that even the smallest financial

glitches are rather troublesome, while the biggies are disastrous.

Let's step into your mental simulator for a moment, and think it through carefully. Lean back in your chair - now. Close your eyes. Oops, open them again, else you might battle to read this next section. OK, so think about your biggest client.

Who is it? How much do they currently owe you? What is the worst they could possibly get to? When last did they get there? What did you do to fix it? What do your competitors do to fix it? How can we reduce that risk? When last did you run a credit check on this client?

How can you insure against the risk? How much benefit would you get from insuring this risk via Credit Guarantee? Where would you get funds if they closed on you tomorrow? Where else can you find large clients like this to balance your business so that any single failure won't be catastrophic? How can you reduce your overheads in a hurry when it happens?

How can you improve your account management to reduce any future calamity? What signs would there be before they went belly up? How closely can you monitor those signs? If the worst happened, how could you personally survive?

[I won't go there today because I have done so since forever in these emails

- and it's all covered at www.crashproof.co.za ]

And think through as many other relevant questions as you can, trying to find answers that you can live with. After all, this is your life. That was difficult, wasn't

it? Especially that part about leaning back in your chair. If you have any sense - and I know you are a discriminating person because you are reading this fine weekly email - you will jot down the answers to these questions. And any others that you can think of relevant to this problem - and keep them for the day you need them. [Of course, in spotting some of the holes I know you

will take action tomorrow to close them.]

And then you have finished your first mental simulation session. You are marginally more knowledgeable about your business, and much better qualified to run it. And when the brown stuff hits the fan, you will have the appropriate paper [and drugs] ready. So when can we do the next one? Maybe looking at how to get a 100% sales closing rate?

It's so much more fun to imagine the challenges; to visualise them in detail, than it is to experience them in real life. And it's a heck of a lot less expensive. Your  role as the captain of your own ship of enterprise is to be experienced in all the bad things that can happen - before you actually experience them. So do it inside your head with your mental simulator. All the worst things that have ever happened to me - happened inside my head.The reality was never as bad as my imagination was. That makes your mind a wonderfully creative business tool, doesn't it? So lean back...

March24th, 2004 - Taste Coffee Shop, La Lucia Mall.

PS Check out the Sanlam Business Owner of the Year competition, and seriously consider entering. It's about you.