Dealing with Business Setbacks: I wasn't prepared this summer for my biggest curveball yet!

So this summer, surprisingly, I've had my best month ever, despite me expecting a quiet summer and thinking I’d be spending my summer working on my business and preparing for a busier September. I’ve been on a total high, but that was short-lived when I received the biggest curveball I’ve had yet in my business - a 50% rent increase. 

A year ago I needed a permanent office (Thanks, Dubai business license requirements!), so I took on a private suite in my co-working space. I bet on myself and took the only available office, a two-person space rather than waiting for a single room. I figured that having a larger office would allow me to create a great brainstorming space where my clients could work with me, and feel safe to open up about what’s going on - and I was right. Not just that, it’s helped me to get really serious about my business, giving me a place to focus and create the structure I needed as a nascent entrepreneur. And it being a larger fixed cost really motivated me to level up my business development, increase my client base and drive profitability.

Then this month, the curveball - my two-person office is apparently now a three-person office and as I pay per desk, that’s a 50% increase in my largest business expense.

When I received that email out of the blue, I was floored. I’d gone from feeling super proud that I’d built up a cash flow buffer which meant I could pay my annual rent for the year without dipping into my contingency fund - but with the increase that now wasn’t possible. I felt like the goal posts had moved, and the mountain that I’ve been climbing had got commensurately bigger. I went home that evening dispirited and demoralised. That evening I wallowed and ranted to my husband for the pretty much ready to jack it all in.

But, once I’d got over my initial ranting and raving, I sat myself down and forced myself to look at my new situation more objectively.

Now, I know that one of my superpowers is my ability to turn challenges into opportunities - it’s something that I’ve done throughout my corporate career, taking setbacks and looking for the positives, focusing on learning and pivoting through adversity. In fact, I think it’s probably been one of the biggest drivers of my success - being adaptable and taking chances as they come to me. So I channelled that superpower after a good night’s sleep and spent the rest of the weekend stepping back and seeing where I could find the opportunity in this challenge.

And here’s the reflections it sparked:

1. I needed to step back and bank the upside

2. I needed to gather more information about what alternatives were out there

3. I needed to get on top of the costs in my business, leaving me vulnerable to increases across the board

So firstly, recognising the upside and the positives. I’ve found a space which inspires me and my clients, is convenient and close to home and has allowed me to build a flexible business where I can deliver my services in the way I want to, but also run my other projects and get home for my kids without a long commute. I’ve met incredible people in my co-working space who have inspired, challenged and mentored me. In hindsight, I can confidently say that I’ve received way more benefits than I’ve paid for.

Secondly, when I looked at alternatives, even my uplifted rent is still great value for money for the space I have. Aside from all of the positives above, my membership also gives me access to meeting rooms, a gym, pool, free training sessions and an incredible support team who make my clients feel really welcome. All the other alternatives are more expensive, I’d have to pay extra for parking and lose at least 30 mins a day commuting (not to mention the fuel costs!). The only real cheaper, alternative would be to take on my own office, which would require investment in fit-out, furniture and tech infrastructure - which would take several years to recoup. Not to mention increased costs for utilities and service charges.

Finally, this experience made me dive into my P&L , and I’ve identified lots of opportunities for both cost reduction (particularly in technology / tool subscriptions that I don’t use enough to justify the annual cost), AND it’s made me think again about new revenue opportunities. This month I came close to achieving a target that I’d set myself for the end of the year. So this is now an opportunity to consolidate what I’ve achieved so far, but to also start thinking about pushing for new revenue growth with some of the new service ideas I’d been mulling over for later in the year but wasn’t ready to put into action.

Yep, that was a weekend of a LOT of thinking! But I wasn’t done with those three takeaways.

The final reflection I had was on how I used to adapt to curveballs, and how prepared I was for this one. Back in the corporate world when I was Head of Strategy part of my role was to plan future growth, but to also anticipate threats to growth and create high-level mitigation plans. In looking at hypothetical risks to the business and thinking through potential responses when setting strategy, it meant that we always had a high level playbook to help when any of these risks started to become potential issues / curveballs. We were prepared and we were always able to reduce or avoid the majority of the potential impact.

But in my own business? This is something that I’ve neglected. While I’d actually had conversations earlier in the summer about cost rises (and been reassured that it wasn’t going to happen), I was complacent and hadn’t actually thought about what my response would be if that turned out to not be true. So when that risk became a reality I didn’t have a contingency plan to put into play.

So this month, as I now replan my business to absorb the cost increase (without passing it on to my clients!). I’m also going to spend some time thinking about hypotheticals and how I can adapt. I’m going to prioritise the actions I can take now to make my business as robust and as lean as possible so that I’ve still got a buffer that protects me from future curveballs, even while I’m absorbing this one.

So long story short, over the last couple of weeks I’ve done what I do best, adapt in the face of the unexpected. These are the three takeaways I want you to reflect on for your business:

1. Always have a contingency plan: We need to spend time assessing risks and thinking through potential solutions. It's like having a trusty roadmap for life's unexpected detours.

2. Know your numbers: Understanding your cost base and keeping your business lean gives you wiggle room when unexpected expenses crop up.

3. Attitude is everything: Crisis often leads to growth. It's okay to have a moment of panic, but then it's time to look for the silver lining and push forward. I’ve looked at a challenge head-on and found the positives and the opportunities and I’m excited about putting them into action.

I’ve now gone full circle and am feeling really positive. Why? Because, I’m going to come out of it with a stronger, more robust and prepared business model and clarity on what options are available to me next time something comes out of left field.

If you're facing challenges in your business, want help planning for the unexpected and the curveballs, or want to talk through challenges you're facing with rising costs or struggling to grow revenue, then drop me a note - I'd be happy to chat and share how I'm thinking about it in more detail.