{"id":3038,"date":"2016-03-21T06:00:21","date_gmt":"2016-03-21T13:00:21","guid":{"rendered":"http:\/\/evergreensmallbusiness.com\/?p=3038"},"modified":"2019-07-01T15:41:39","modified_gmt":"2019-07-01T22:41:39","slug":"ben-bernanke-scenario-planning-your-small-business","status":"publish","type":"post","link":"https:\/\/evergreensmallbusiness.com\/ben-bernanke-scenario-planning-your-small-business\/","title":{"rendered":"Ben Bernanke, Scenario Planning, & Your Small Business"},"content":{"rendered":"
\"Federal<\/a>
Federal Reserve Board Chairman Ben Bernanke testifies during a hearing before the Senate Banking, Housing and Urban Affairs Committee September 23, 2008, on Capitol Hill in Washington, D.C.<\/figcaption><\/figure>\n

So this blog post is a bit schizophrenic. I want to do a quick book review of Ben Bernanke\u2019s book The Courage to Act.<\/em> Then I want to delve into the really interesting subtext in the book: scenario planning.<\/p>\n

My Review of Bernanke\u2019s Book<\/h2>\n

I\u2019m going to make this quick. I think I\u2019ve read nearly all of the books written about the \u201cGreat Recession,\u201d and Bernanke\u2019s is, in my mind, clearly the best.<\/p>\n

If you\u2019re interested in the Great Recession or don\u2019t feel like you have a working understanding of what happened and why\u2014and how it could have been much, much worse\u2014you should find this book wonderfully illuminating and very readable.<\/p>\n

But Bernanke\u2019s book also provides entrepreneurial insights about scenario planning. Accordingly, in this blog post, I also want to talk about scenario planning in the context of running a small business not only safely but successfully.<\/p>\n

Note:<\/strong> Scenario planning is what it sounds like. You think about a range of scenarios that might occur and try to plan ahead of time to, if not thrive, at least survive.<\/p>\n

Benefit #1: Mitigating a Worst-Case Scenario<\/h2>\n

So here\u2019s the first lesson, I think, of the Great Recession that Bernanke\u2019s book highlights: Too many people in both government and business (especially financial regulators and financial services businesses) were blindsided by the rather predictable scenario that unfolded, which was snowballing losses on the growing numbers of low-quality mortgage loans.<\/p>\n

Further, once it was apparent that people were blindsided, unsurprisingly, other people started to panic.<\/p>\n

Now one can spend all sorts of energy pointing fingers at the folks who brought us this mess or exacerbated it. But may I suggest that you and I, as small-business people, take away an actionable insight? We probably all need to do more of what the perpetrators of the Great Recession forgot to do or skipped doing.<\/p>\n

Specifically, we need to think about the worst-case scenarios that might occur in our operations and try to create workarounds that protect our firms as well as our employees, vendors, and customers.<\/p>\n

Ironically, with a bit of relatively economical prevention and simple, up-front preparation, our firms might prove quite sturdy even in the face of a natural disaster or if victimized by a \u201cman-made disaster.\u201d<\/p>\n

Note: <\/strong>Off-site backup of a firm\u2019s critical data and a written disaster recovery plan, for example, might be much or even most of the appropriate preparation in many worst-case scenarios.<\/p>\n

Benefit #2: Thinking about Problems and Opportunities<\/h2>\n

Here\u2019s another related benefit of scenario planning that jumps out from the Great Recession books and in particular from Bernanke\u2019s book. As Bernanke notes and laments, the policy makers who had to somehow solve the financial problems that created then fueled the Great Recession often had to make decisions with too little time for careful thought and analysis.<\/p>\n

Further, policy makers often had to make their next big decision before they\u2019d had time to assess the impact of the previous big decision.<\/p>\n

You know what this makes me wonder? If rigorous scenario planning wouldn\u2019t have helped here too.<\/p>\n

In other words, if people had had the foresight to think ahead of time about how they should manage in a worst-case situation, maybe that thinking would have helped.<\/p>\n

You and I, for example, probably would benefit from such thinking when it comes to our own personal worst-case scenarios.<\/p>\n

Benefit #3: Consider Upside Risks<\/h2>\n

I have one final comment about this scenario-planning business.<\/p>\n

You and I can easily think about scenario planning only in terms of preparing for worst-case scenarios. But that\u2019s really only half the picture, right?<\/p>\n

We are probably just as likely to get blindsided with best-case outcomes.<\/p>\n

Accordingly\u2014and this is my final point\u2014our scenario planning needs to include best-case scenarios.<\/p>\n

If we\u2019re thinking about really good outcomes, we may be able to do a better job staying \u201cavailable\u201d to that success.<\/p>\n

If we\u2019ve done some thinking about issues and options, we may be able to more easily and more effectively manage a best-case situation.<\/p>\n

For example, what if you stumble on some great new product or service, really profitable, that turns out to be amazingly scalable? Without getting delusional about the prospects, can you do stuff now to be at least sort of ready for that upside opportunity?<\/p>\n

A Final Comment about Bernanke\u2019s Book<\/h2>\n

Some of the characters involved in the drama called the \u201cGreat Recession\u201d don\u2019t come across all that well. Clearly, lots of people were in way over their heads.<\/p>\n

But you know what? We all need to thankful that a critical mass of smart, hardworking people prevented something worse.<\/p>\n

\n

Are You a Small-Business Owner Paying Too Much\u00a0Tax?<\/h2>\n

\"\"<\/a>Small-business owners often don\u2019t maximize\u00a0their legitimate tax deductions. They don\u2019t, for example, structure their business operations to protect legitimate deductions. They frequently\u00a0don\u2019t do enough to create new deductions. And rarely do they understand how to recycle, or double-deduct, amounts that\u00a0can be used more than once.<\/p>\n

That\u00a0is all a financial tragedy. Getting smarter about tax deductions can save business owners a bundle.<\/p>\n

If you\u2019re thinking after reading this that maybe you can do a better job with your tax deductions, consider our $40 ebook\u00a0Small Businesses Tax Deduction Secrets<\/em>.<\/p>\n

This 70-page ebook\u00a0provides detailed instructions\u00a0about how you can save thousands of dollars annually in income and related taxes simply by more effectively using legitimate small-business tax deductions. Interested in more information? Click here.<\/a><\/p>\n