Double Your Worst Case

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Through the process of determining feasibility for your idea, you will explore and analyze every key aspect of the proposed business. Sometimes overoptimistic entrepreneurs include something intangible in their final analysis—a miracle. Common examples of miracle planning include things like going viral, astronomical conversion rates, unrealistic financial ratios, and inflated pricing.

Whatever your worst-case scenario is, double it. Count on the fact that your milestones will take twice as long to achieve and expenditures will cost twice as much as you anticipate. Once your business is operating, react immediately if things aren’t playing out the way you expected. If, for example, you find that your customer conversions are 10 percent of what they should be, immediately revise your projections downward and reevaluate the business. Accept the facts as they are, not as you want them to be.

The viability of your business should be obvious, so plan extremely conservatively. Struggling to make the numbers work is a big red flag. Conversely, it’s highly encouraging if the numbers still work after doubling your worst-case scenarios. Whatever you do, don’t count on a miracle.

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