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Why Smart Entrepreneurs Always Have A “Plan B”

In the 1990s, Strategic Coach had an enormous streak of luck: The exchange rate between Canada and the United States was phenomenally good.

Most of our costs were in Canada, but most of our income was in the United States. For every American dollar that came across the border, we were getting up to $1.55. These “magic dollars” allowed us to grow and become a major organization in a way we simply couldn’t have done otherwise.

By the same token, however, we decided to go into the U.K. believing that the pound would continue to be worth $2.50 Canadian, and within a year of establishing ourselves there, it went down to $1.50.

So the first one was good luck, and the second one was bad luck. We didn’t get the multiplier. We went in because we thought we had a multiplier, and the multiplier was taken away from us.

As mathematician James Yorke said, “The most successful people are those who are good at Plan B.”

We’re not guaranteed anything. And that’s part of the wisdom of being an entrepreneur: You take advantage of your opportunities for as long as you can, but they’re on loan. They will be recalled. You’ll get a phone call, and the person on the other end will say, “Okay, you don’t get that anymore.”

So as an entrepreneur, you maximize Plan A to the fullest extent that you can, but from a standpoint of prudence, you always have a Plan B.

I’m not saying that you give the same amount of time to Plan B as you do to Plan A. Of course, you’re going for where the money is right now. You’re going to go where the opportunity is. But keep in mind that you may need to shift gears very, very quickly.

The worst thing that happens to people when they lose their multiplier is that they go into a state of paralysis and confusion, and they don’t learn from the experience they’ve just gone through. It’s actually the lack of learning that keeps them paralyzed.

So what’s your fallback position? As an entrepreneur, you need lots of fallback positions. You could do this, you could do that, and you should be able to switch fairly quickly from one to the other.

One of the most interesting features of Plan Bs is that they can run against the logic of what’s considered normal.

One of the Plan Bs Strategic Coach came up with during the recession was so counter-intuitive that a lot of people, even within the company, were a bit scared of it.

We created a new, elite workshop series that cost twice as much as we’d ever charged before for the first three years of the Program.

I’ve always had this notion that there were other entrepreneurs out there who would come to Strategic Coach, but only if our price was twice what it was — because that higher price would speak more to who they were, and they would be hanging out with other entrepreneurs in their workshops who were facing the same kinds of opportunities and challenges they were.

It seems kind of logical now. We’re a year into running these higher-priced workshops alongside our existing ones, and it’s paid off in a really big way. I think it’s also had a tremendously positive impact on the company. But it was definitely a Plan B.

So Plan B might seem frightening at first, and you might not invoke it unless you absolutely have to, but Plan B might also be the realm of your most valuable innovations. Plus, of course, the more times you see yourself transform an obstacle through a Plan B, the more confidence you’ll have in your ability to adapt to any circumstance and win.

When you lose something, the next day you should be excited about something new.