Always have a back-up plan

I’d rather have one hundred clients who pay one thousand dollars each, than one client who doesn’t pay one hundred thousand dollars!-me

I’ve been thinking lately about the kind of ‘Sidisms’ I’d like my offspring to remember. There’s a famous one in my home that goes like this: “You don’t have to help me, JUST DON’T HURT ME!” At first I thought I’d address the issues of trust and reliability, but there are so many aspects of business where these elements factor in. As well, they may at first appear to be the same thing, but they are very different and they impact tremendously on your decision-making as a small business owner. One would hope that trust and reliability come in the same package, but they can and often are mutually exclusive.BackUp

In our lives, we have to trust people. There is no way around it. To navigate successfully in all aspects of life, we depend upon others to do what they’ve promised to do. It would be virtually impossible to get through the day unless you could depend upon people to do what they’ve promised. Can you imagine going into a coffee shop, slapping a twonie on the counter with the implied promise to be delivered a hot cup of Starbucks, and instead be ushered out, sans coffee and sans twonie? From the humblest transaction to the most complex, from a momentary impersonal encounter to the most invasive medical procedure, we depend upon people to do what they’re supposed to do!

But by MY definition, there is a difference between depending and relying. You can trust anyone. You can depend on anyone. BUT DON’T RELY ON ANYBODY!

That may seem, at first glance, to be contradictory but allow me to explain. In business, whenever you enter into an agreement, it is in reality a binding agreement, and under the correct set of conditions and rituals, it is a binding LEGAL agreement enforceable by law. That is to say, that if the other party fails to deliver in the agreed upon manner, then one has recourse to enforce compliance with the terms of the agreement. You depended upon the other party to deliver, and you trusted them to deliver, but they didn’t deliver, ergo your legal recourse.

Now, RELIANCE is something different. When you rely on someone, you are placing your trust in them, and depending upon them to deliver, and if they don’t deliver you have NO BACK-UP. When you place reliance in someone, they are your back-up plan. That is very dangerous, particularly in business. In my opinion, NEVER DO ANYTHING WITHOUT A BACK-UP PLAN. It’s not easy to live by that, but for the important decisions and actions, it would be irresponsible and close to suicidal not to have a method to extricate oneself from the edge of a financial cliff. It would be like putting all your chips on a single hand of blackjack, dealt from a single deck by a skilled mechanic. It’s a poor bet.

Human behaviour is affected by so many variables. When you depend upon someone, you may be subject to their self-interest. When their well-being overrides yours, then you can’t depend upon them to do as they’ve promised if it means their well-being is at risk. Likewise, you are subject to their needs, their greed, their personal motivations, their like or dislike for you, and so many other factors which may cloud their delivery of whatever it is you’re depending upon. Think about a surgeon who you need to perform delicate surgery on you. Think about that surgeon as the nerdy kid whom you tormented relentlessly in high school. Now hope that nerdy kid takes the Hippocratic oath seriously. Agreed, that’s an extreme example, but you get my point.

Placing reliance on someone is a big deal. It’s important to special operators who rely on someone behind them carrying a gun meant to provide cover. You trust that person behind you not to shoot you in the back. You in fact RELY on that person to aim correctly. There is no back-up plan and a miscalculation on their part could mess up your day badly.

It’s not quite that severe in business, but it can be. You may trust your banker. You may depend upon your banker to provide you with the financing as promised when promised.  However, stuff happens.  What will you do if the rug is pulled out from under you at the eleventh hour? Will you place your reliance on your banker? Or will you have a back-up plan?

No one has your best interests at heart more than you. You can trust and depend on anyone, but RELY ONLY ON YOURSELF.
I would love to hear from you and invite your questions and comments. With three decades of experience as an accounting professional, consultant to small business and business owner, there may be a few things I can help you with. Call me. Best wishes, Sid.