How Imagining An “Out of Business Scenario” Saved Me A Lot Of Time And Money
In April 2021, I had just started mentoring a new startup. I was helping them gain their first clients and create cash flow on a regular basis. As I usually do with new business partners, I suggested, “Let’s first run a quick future scenario exercise to align our vision and see if we are on the same page.”
That’s what we did. We gathered driving forces and motivators for our cooperation, ranked them on an “Impact-Uncertainty-Map”, and created future scenarios with the most important uncertainties of the future.
Red flags started showing up
When putting ourselves into the four different scenarios we had created, the startup CEO said, “Well, I would call scenario number 3 the “Out of Business Scenario” for us.” I was stunned. Wow. An “Out of Business Scenario”? As an entrepreneur, I had never considered something like being out of business for myself. Sure, ventures can fail, but then you get up and try something new. A real entrepreneur doesn’t have an “Out of Business Scenario”.
No skin in the game
That was a major red flag. Not much later, other red flags joined the first one. It turned out that the founders were not serious about building up the business together as we had planned to. They had a lot of other occupations and didn’t operate their business wholeheartedly.
Had I not seen the red flags early on, I probably would have put my energy and money into this venture while they had no skin in the game. But this way, I knew that we were not a good match, and the business relationship ended quickly without much damage. And I was happy to invest my resources in other projects instead.
Interested in running a future scenario exercise for your business as well? Read more about it here, head over to www.redswan.at or drop me a line at office‘at’redswan.at.
