An airplane pilot has the responsibility to conduct safety inspections—both before they take off and after they land. Diligent maintenance checks can help to avoid things going wrong: equipment failure, accident, injury, or a catastrophic crash.
Before launching a project or initiative, risk intelligent business owners can identify potential vulnerabilities by conducting a Pre-Flight Check. This evaluation can reveal valuable information that is both quantitative (numbers) and qualitative (experiences and sensations).
This list contains signals of potential problems that need to be addressed in a company before moving forward.
The excitement of embarking on a new campaign, investing in a large purchase, or partnering with someone in a new business opportunity can be intoxicating. But before you jump in with both feet, it is wise to fully evaluate the decision and make sure it is in your company’s best interests.
Questions like the ones below will help you to identify your “pre-flight” conditions and will provide concrete data to determine whether continuing with that course of action is risk intelligent.
1. Positive Cashflow
One of the most common reasons for business failure is poor cashflow, which means that the company does not have enough money to pay bills before generating revenue.
Consider whether your customer billing terms are efficient and beneficial. What is the turnaround expected for payments? Are you subconsciously giving away the store? How healthy is your company’s financial position? Do you have enough cash available to keep you safe if an unexpected problem occurs?
Read more: What is Transaction Avoidance Syndrome?
2. Healthy Feedback
Another important but often overlooked struggle for business owners is the failure to communicate their goals.
Consider the following:
- Does everyone in your company know the Vision, Mission, and Values?
- Is your company culture attracting employees and customers who are a good fit for your company?
- Are employees willing (and encouraged) to share “bad news” with you?
3. Know Your Strengths
You have a fantastic set of skills, knowledge, abilities, and intelligence. But unless you are aware of your own strengths, you will have trouble recognizing blind spots that could make your company less effective.
Recognize the limits of your abilities as a business owner. Know your strengths, and also your weaknesses. Ask yourself:
- Have you ever taken personality or temperament tests like StrengthsFinder and Myers-Briggs? (If you haven’t, I highly recommend both!)
- How are you leveraging your strengths, multiple intelligences, and gifts?
- Why do your customers choose to buy from you?
- What makes your company’s services or products unique compared to similar businesses?
Read more: The 5 Elements of a Niche
Once you’re familiar with your strengths and personality type, you can start thinking about which types of buyers can benefit the most from your services.
- Do you know who your Ideal Customers are?
- Are your current customers truly Ideal for what your company offers?
- How do you reach, convert, and serve your customers’ needs?
4. Know Your Weaknesses
One of the greatest areas of self-awareness is knowing where you are gifted… as well as what you’re NOT good at.
- In which areas of your business are you not as confident?
- Are you aware of how you come across to people?
- Do you tend to use an attitude that is more Yin (passive) or Yang (aggressive)?
- Are you pushing customers or staff away without realizing it?
5. Build Connections
Pilots rely on the expertise and perspective of many other individuals — mechanics, grounds crew, air traffic controllers, fuel operators, safety technicians, and many other roles. By building strong connections, they insure the success of each flight. You can have the same success in your business project if you pay attention to the quality of your relationships with customers, employees, vendors, and the public. Studies have shown that consumers remain loyal to brands that care about their experience.
- What kind of connections do you make with customers?
- How does your company invest in those relationships long-term?
- What added value do you provide that sets you apart from competitors?
- Is your staff turnover rate low in comparison to the industry standard?
6. Assess Frame Stability
Pilots are very concerned about the structure of their aircraft: whether it’s stable enough to withstand winds and strong enough to hold together during a bumpy landing. Your business needs to have a solid frame, too.
- Have you ever created a formal strategic plan for your business?
- How often do you communicate your plan to staff?
- Are you updating your strategic plan on a regular basis?
7. Check the Lights and Monitors
If an indicator light isn’t working properly, disaster can happen within minutes. The 1979 disaster at Three Mile Island nuclear plant was due to a number of errors, including an indicator light that showed a relief valve as “closed,” when it was actually stuck open. Similarly, a disaster in 1986 started in Chernobyl, Ukraine but affected the entire world. (Here’s my analysis of the HBO show Chernobyl)
To avoid a catastrophe in your business, make sure to regularly check your measures — the 3 to 5 specific ways you know you’re making progress toward your strategic goals. I call this “moving the needle” (similar to a gas gauge, speedometer, or RPM gauge).
- Which 3 to 5 measures are the most important to moving your company forward? These can include:
- What are the signals that your company is vulnerable? (use the SWOT diagram)
- How prepared are you for a disaster? (use the PESTEL tool)
In the next part of this series, we will look at Post-Flight Checks to evaluate after a business project has ended.
Interested in hearing how you can reverse staff turnover and increase your profit margins? Find out more here.
Grace LaConte is a business strategist, writer, and workplace equity advocate whose risk management graphics are used around the globe. She specializes in finding hidden threats and opportunities in organizations that employ working parents. Grace is the host of the What’s Wrong with Your Business? Podcast, which provides tools to adapt in a rapidly changing market.