What does it mean to plan to fail? After all, if we KNOW something we’re doing is wrong, why do it? It’s really about intelligent risk-taking, not failure. Here’s why daring to be wrong might just be what saves you.
What Planning to Fail Really Means
Let’s say you’re faced with a choice: FitBits or a phone app to track your customers’ fitness progress. The Fitbit cost $60 – $250 bucks depending on which of seven types you buy, and the phone app is just a few dollars, or perhaps free, and uses the accelerometer on a typical smartphone. At the app store for group fitness you see a breakdown. Do you want health and fitness? Sports? Lifestyle? Something else? What works with the FitBit? Does it have special software only IT talks to? What’s best for you?
In the back of your mind lurk questions: if I spend time and money on this now, is it going to be out of date in a year? Will there be support if I have a question? What if it’s a total flop and you wish you’d spent the money elsewhere?
It doesn’t matter what the choice is. There will always be tradeoffs. What’s common is the degree of paralysis we all feel about making a choice when we don’t know the future.
In this context, planning to fail doesn’t mean making a deliberately bad choice. It means making the best one you can with the information you have — acknowledging and accepting the consequences — and getting on with your plan.
The best times to take a risk are when things are going badly…and when they’re going well
When things are going badly, it’s like standing in the middle of the road. Don’t move, and you’ll get run over. Most folks understand this.
However, one thing many fitness and wellness businesses struggle with is understanding that even when things are going well, you should already be thinking about what’s next, and how you’re going to get ahead of the curve.
The time to experiment is when you’re flush with extra resources from the increase in customers, business expansion, or an especially good year. Take advantage of the fact that right now, you’re grabbing everyone’s attention.
Eventually, that picture will change. The cool technology you have will be yesterday’s news. The shiny equipment won’t be new anymore. Your customers will start wondering what’s next.
Examine your options and rule out the ones that simply aren’t acceptable
Certain strategic options may simply not make sense for your wellness business.
For instance, if that great expansion opportunity requires $10M more in liquid assets than you have any hope of getting in the foreseeable future, no matter what, it’s time to check it off your list.
If the only way to afford your current location is to downsize your square footage or move into a less desirable neighborhood, you may have to decide whether square footage or location is more important and rule out the other choice.
Most of the time, you can’t keep ALL options open, and making a decision always brings the risk of making one that turns out badly.
What we’re trying to do here is rule out the choices you know FOR CERTAIN are unworkable. Leave everything else on the list.
Quantify the risks and opportunities
Say you’re weighing moving to a nicer, larger property that’s farther away from your customer base versus staying where you are, but dealing with crowding and less attractive space.
One thing you can do is ask your customers about the pros and cons of driving farther to visit an upgraded facility. You can talk to your core membership of customers you know are the most passionate about helping you build the kind of business they want to patronize.
Gather as much data as you can, however you can. If it comes in the form of comments, try to rate those comments on some kind of numeric scale; for instance, “strongly agree” to “strongly disagree” or even “would love this” vs. “would hate this.”
Next, run the financial numbers. What would happen if you lost 5, 10, 20, 30, or 50% of your customers by moving, or by staying put? What costs would decline by the same percentage, and which costs would remain fixed? Were they occasional customers you could stand to lose? Diehard loyalists it’ll take forever to replace? How much revenue are those customers worth? How much in sales and marketing expenses will it cost you to find replacements in order to sustain your cash flow? What about the new store rent? Can you make up any difference by changing membership fees? If you did, can you quantify how many customers you might lose, or how much revenue you might gain without alienating them? Are you having to discount to get new customers for your current space because it’s not as attractive?
Your best guess is perfectly OK. The goal is simply to estimate whether a particular choice will either definitely or probably enhance or devastate your business, and an ability to gauge your own tolerance for all other levels of risk.
You have to do something… but not necessarily right now
You’ve decided to consider taking your fitness or wellness business in a different direction. Perhaps it’s growth or expansion. Perhaps it’s simplifying your product lineup or targeting a more narrowly defined set of prospects.
You’ve examined your options and tossed out the ones that would certainly sink you or “bet the farm” on a very uncertain outcome.
Sure, sooner or later you will have to do something. But the question now is whether you need to act now.
Give some thought to when it actually makes sense to start implementing your plan.
Stick it out with your new choice…
If you’ve done your homework, you’ll understand better when the time is right to make an investment in pursuing a different strategy. When it’s time to act on that choice, the challenge will now be in sticking with it long enough to determine whether it was a success.
Broadly speaking, that’s longer than month or two. When you start something new — a new program, product, market segment, whatever — the early days are often rough going. Some of your ideas turn out to be home runs, and others need tweaking or even major overhauls. That’s pretty normal.
Don’t give up on your idea just because you hit bumps in the road. There are NO bump-proof ideas out there!
…But know when to change gears
How long is long enough?
Data helps. Take a look at your sales cycle. From the first time you introduce a new sales campaign, how long is it until you start seeing existing customers respond to it? How long before prospects become customers? How many customers, and does the number increase over time, stay steady, or rise, then fall?
As before, a best guess is better than nothing. What we’re really trying to determine is whether you’ve waited long enough to see results, and the cost of waiting to see if your new strategy pays off. By the end of that time period, things need to balance out or tip in the direction of more income than expenses, or your plan is unsustainable.
For instance, if it takes you three months from the time you first advertise your intensive medically-based weight loss program to sign up your first client, and your classes are full by the end of another three months, you should see full enrollment within six to nine months. If you’re going to make changes to your setup — for instance, expanding outside weight loss, adding men’s weight loss to the mix, or something else — expect it to take equally long, based on your own data. If you can’t afford to wait that long… well, your data is telling you that’s how long it’s probably going to take. Maybe the chance you’re considering isn’t one you should take on. Perhaps it should go on your “no” list.
You have to get comfortable with risk taking
Of course this doesn’t mean you should get comfortable taking foolish chances.
But there’s a certain amount of risk that comes with running a business, and you have to accept that risk, quantify it, plan for it, and embrace it, then act.
A simple example: if you know it takes you seven hours and 45 minutes to complete a 100 mile bike ride and they close the course after 8 hours, you should add in the time it takes you to fix a flat. If that’s more than 8 hours total, you need to make a change somewhere. Because like it or not, every time you get on the bike you risk having a flat tire, and that means every time you do that 100 mile ride, you’re running a chance of not finishing. You always face the risk of not finishing… but it doesn’t mean you shouldn’t start. It means you should plan for the flat tire and budget time accordingly so that if the inevitable happens, you don’t fail to finish.
Budgeting for intelligent risk taking is the first step in making sure your company can weather the storms of bad luck. Arming yourself with data is one way to assess whether a risk is acceptable. Quantifying that data into a simple risk model helps reveal the degree of exposure, the possible cost of any bad outcomes, and how long your business can “hold its breath” before moving on.
The longer you stay in business, the likelier it is your fitness or wellness business will have to decide on a change in business strategy without complete data — and even with lots of data, the odds are good you’ll hit snags.
Be prepared to get up, dust yourself off, and move on. It’s critical to your success.