[Article republished from “Mondays with Mike – 1/8/18” email newsletter ==> Subscribe to get weekly newsletter in your inbox plus FREE REPORT]
Most people go through life on autopilot..
They go to school, get a job, settle into an industry, and progress through their career with hardly a thought about where they’re at, where they’re headed, and how to craft a career, business or life that is by their design – tailored to their unique skills, needs, and passions.
But here’s the deal.
Going through life that way it is highly likely you’ll be setting yourself up for a crash. It is the same with careers, businesses or relationships. What gets attention grows and prospers. What gets neglected shrivels up and dies.
And whether you realize it or not, everyone is subject to unexpected or unpredictable circumstances that will test you.
This test I call “The Cliff”.
Whether it is Career, Business or Relationship driven, the cliff is out there waiting to feed on the unsuspecting.
So what is the cliff?
It is a situation where your career, business or life (or all three) can be seriously derailed. Setting you up for future financial catastrophe.
When this hits you often have to scramble to keep from falling apart financially.
So what are some examples of the causes?
Career Cliff
What can cause a career derailment? Once you’ve built your career and skills and have hit your thirties, you shouldn’t be losing a job due to incompetence or things like attendance problems. You know how to show up and get the job done.
But there are things that may happen with your employer that could have a negative impact on you and your job. And ultimately cause you to be out on the street, looking for a new job. Totally unprepared.
- Down Business Cycle
- Increased Competition
- Commoditization and Pricing Pressures
- Business Sale or Acquisition
- Going out of Business
- Technology.
Business Cliff
On the business side there are similar ones that may not cause employee job losses but do have a major impact on the company’s profits. As a business owner you need to prepare for these. And as an employee these may have an impact on you now or in the near future as they play out.
- Lack of a Compelling Company Vision
- No Communicated Competitive Advantage
- Limited Marketing
- No Diversification (all business with a handful of clients or tied to one key vendor)
- Lack of processes and procedures – all info in employees’ heads
- Stagnating or Declining Sales
- Profit Margins being squeezed by commoditization and pricing pressures
- Staff Turnover
Personal Life Cliff
The personal side can often be more disruptive and unpredictable as the business causes. With a business there are often warning signs with shrinking margins, staff turnover, and low sales. On the relationship side it often sneaks up on people or comes out of the blue.
- Divorce
- Bankruptcy
- Health Issues
- Taking care of an ill family member
So How Do You Plan For These?
Planning for the worst case scenario is never fun. It is often hard work.
But planning appropriately can make the difference between a smooth transition with minimal financial impact and one that takes you down big time.
Here’s some things you can do to prepare.
1) Don’t neglect your loved ones. You only live once and even though you need to put food on the table, you need to prioritize family time or you could be putting your marriage and family at risk. Divorce is something that can devastate someone both emotionally and financially and make recovery a multi-year process. And during that time the financial toll is heavy.
2) Live within your means. It is tempting to have the latest gadget, the nicest house, the cool toys, the vacations in Europe. But if your paycheck ends tomorrow, do you have 6-12 months of savings to survive on while you work on landing a new job? If you run a business and it has a downturn, can you finance it through a recovery?
3) Build and Diversify your skills and income streams. Whether that means starting a side hustle, investing in real estate or stocks, building up your 401K, etc. you need to give yourself other avenues to cover the shortfall until you get yourself back on your feet.
Need help in planning out any of these elements? Contact me to discuss them. It is never too soon to figure it out. And bouncing ideas off someone other than family members or having someone hold you accountable can be key to making it happen.
