I have said many times that there is a “Rule of 3” in business: everything takes 3 times longer, is 3 times as costly and is 3 times more difficult than you expect it to be. So, how do you prepare yourself and your business to deal with the realities of this rule?
It takes 3 times longer than expected:
-Build padding into your schedule: Whether you’re managing a project, getting ready for a beta release of a product or expecting the draft of a contract, build your time schedule with sufficient padding so that you don’t overpromise and under-deliver with clients and customers, and that you can manage your own team’s expectations.
-Provide faux deadlines: If you know that you need (or just want) something by a particular date, move up the ask date for it, with the knowledge that it will likely slip. I do this a lot with my licensing schedules for my clients. I tell them that the deadlines are on a day several days prior to the actual date and then, when they miss the “faux” deadline, I give them extra panicked pressure, even though I am not really panicking since the deadline isn’t real.
- Secure ample resources: Having a realistic sense of how long something will take right upfront can help you to secure more resources. Whether you need capital, physical or human resources- or some combination of those- to make your project successful, having more resources devoted to it can help cut down the time it takes to complete it.
It is 3 times more expensive than expected:
-Have a reserve: Because your business endeavors take longer than you expect and budgets are difficult to ascertain, having a capital reserve can help smooth out the dry spells. This will prepare you for any unanticipated costs (or lags in payment).
-Put limits into contracts: If you are working with service providers, try to get them to commit to a project fee or a project cap. For example, for a new website or even a contract that would normally get an hourly fee, align the service provider’s interests with yours through limits. While you may still have to negotiate down the road if the scope of the project changes or is expanded, at least you will have a better handle on costs.
-Borrow or barter: Where possible, look to non-cash sources of currency to utilize instead of money. Trade your services for that of another service provider. Borrow a resource and then, let the lender borrow a resource of yours (perhaps your color printer use for their SEO skills). This is a creative way to address the expenses that can sometimes sneak up on you- or compound on you- in business.
It is 3 times harder than expected:
-Don’t beat yourself up: Business involves enduring frequent ups-and-downs, which can be exhausting. But beating yourself up only makes matters worse. Go with the flow and know that you are not alone in dealing with the tough times.
-Step away when it gets crazy: When things are difficult, sometimes, instead of pushing to find a solution, the best thing that you can do is to step away. This allows you to gain perspective and is often the most effective way to persevere.
What are your strategies for dealing with the Rule of 3? Share below.
Carol Roth is a national media personality, ‘recovering’ investment banker, investor, speaker and author of the New York Times bestselling book, The Entrepreneur Equation. She is currently an on-air contributor for the national cable television station CNBC, the pre-eminent name in business news. Previously, Carol was the host and co-producer of The Noon Show, a current events talk show on WGN Radio, one of the top stations in the country, and a frequent guest on Fox News, CNN, Fox Business and other stations. Carol's multimedia commentary covers business and the economy, current events, politics and pop culture topics.
Carol has helped her clients complete more than $2 billion in capital raising and M&A transactions. She is a Top 100 Small Business Influencer (2011, 2012 & 2013) and has her own action figure.