Plan B Strategies and Solutions

The need for practical business solutions is not new. What has changed during the past decade is the growing importance of having a “Plan B” because an initial strategy has fallen flat on its face. Failure is the best possible reminder of the following wisdom:

Always Have a Plan B.

Individuals and companies might have different illustrations that make a similar point: new solutions and strategies will be increasingly necessary. How many times does a strategy or solution have to fail before it is appropriate to try something new?

Many years ago Albert Einstein offered his own wisdom about the cycle of repeating the same thing over and over again. I have included his memorable quote below.

Plan B for Banking Services, Cable Companies, College Education, and Internet Publishing

I believe that Albert Einstein's definition of “Insanity” is illustrated by a number of areas in which businesses and individuals keep pursuing a similar solution and strategy despite the apparent lack of success:

• Banks
• Overpriced and ineffective services from cable companies and universities
• Internet publishing of articles and websites

For those that haven't noticed, banks have changed dramatically during the past 15 years. In part this is due to the elimination of many legal requirements since the Glass-Steagall Act was taken off the books in 1999. These changes were sought by the banks for several decades. There have been numerous financial problems as a result. Many of the biggest banks have begun “payday lending programs” which charge individual borrowers annualized rates of interest that generally exceed 300%. Meanwhile many small businesses have been unable to get normal levels of commercial financing. Tell me again why we bailed out the banks in 2008?

Universities and cable companies are both now providing services that most observers view as overpriced and ineffective. Many people are already using a “Plan B” approach to replace both, but traditions take a long time to disappear even when they have stopped working. In the case of colleges, costs keep increasing while employment prospects for college graduates are decreasing. For cable companies (which are rapidly becoming phone companies as well), there is a growing question about whether they will even exist in ten years given how inept they have proven to be at dealing with consumers while continuing to charge more and more. How many people want to fire their cable company? (We have pulled the plug on cable television and phone services at our house.)

In the world of internet publishing, Google keeps on changing and forcing internet publishers to guess about the next shoe to drop. This might represent the most challenging place of all to formulate an effective Plan B strategy. But the verdict is already in about several old publishing strategies and solutions that are not working anymore. These include article marketing and article spinning. There are also publishing websites that have gone from best to worst as a result of the evolving standards on the internet. What is working and what is not working?

New Solutions and Strategies

When the old approaches stop working, it is a prudent time to seek new ideas. While some might refer to this as having a Plan B, you should call it whatever makes it more actionable for you. “Moving forward” and “It’s time to face the facts” are just two common-sense alternatives if “Plan B” doesn't seem catchy enough for you.

Good News and Bad News About Business Finance Planning

The past decade has provided an array of changes and problems for business finance planning. Because of the growing need for flexibility and contingency plans, a recurring piece of wisdom has emerged from some of the business and finance chaos: 

Always Have a Plan B.

Plan B is the good news.

So that I do not bury the lead, I want to make it crystal clear that the expanded appreciation of how important Plan B can prove to be for any individual or business is at the top of my list for the good news portion of this business finance planning discussion. Of course, I have never hidden how I feel about the critical value of having a Plan B. As you can see from the mosaic image which I produced above, I rarely miss an opportunity to feature Plan B in a front-and-center kind of way.

Another purpose for the business finance planning mosaic was to demonstrate in a visual way that everything can fit together quite nicely with a little (or a lot) of planning energy. Key concepts like strategy, solutions, experts, and help also deserve a seat at the table when formulating your own Plan B.

How important is Plan B?

To say it as succinctly as possible, always having a Plan B is a winning strategy. Having a solid Plan B mentality during the past five years has more often than not proven to be a critical difference between business survival and failure. What is your Plan B?

Always Have a Plan B

The bad news:
You can tell there is an oversupply of bad news when the primary good news is the increased appreciation about the importance of having a Plan B.

I am sorry to say that there is more bad news than there should be. This is due in large part to a political climate that is increasingly governed by the largest corporations, big banks, and of course their lobbyists. When the incomes for average individuals decline during what is hailed as a "recovery" by some biased politicians, you have the first clue as to the underlying problem that small businesses and individuals are currently facing.

During the last three years, the average income for individuals has shrunk from $51,000 to $45,000. Meanwhile corporate profits and the stock market have done very well. As they say, the rich get richer and the rest are still searching for Plan B.

Banks are still hoarding their riches and not lending normally to either small businesses or most individuals. In their own little good news bubble, the banking industry has launched an aggressive campaign to move into what they see as the next front. The world of payday lending programs is beckoning to the bankers. How could any respectable banker not pay attention to payday loans when they offer the easy opportunity to charge annualized interest rates of 300% to 600%? Never mind that they are illegal in some States (as they should be). This is why banks pay the big bucks to their lobbyists, isn't it?

The bad news lesson to be learned from what banks are now doing with the money used to save them just five years ago is to realize what they are not doing with it at the same time. Commercial mortgages and working capital financing are just two of the things that most banks are not presently doing with their money in any significant way. By the way, many banks have also resumed their investment activities involving financial derivatives. For those who are not aware, the use of risky real estate derivatives by the banking wizards brought the economic world to its knees several years ago. I can only suppose that the bankers have figured out what they did wrong and are going to test their new theories with more taxpayer money.

Unsurprisingly, my small business finance planning solution for addressing the abundance of bad news is as follows:

Always Have a Plan B.