“Opportunity does not waste time with those who are unprepared.”
Idowu Koyenikan, Wealth for All: Living a Life of Success at the Edge of Your Ability
What will you do when life throws you a curve ball? Are you prepared for the consequences of the unexpected? The reality is that most of us are not. We go about our daily lives, never thinking that we can ever be affected by what’s happening around us or even in the rest of the world, for example the 2008 financial crisis that affected the entire world and not just one country.
We can no longer afford to be ignorant about what’s happening around us, because globalism ensures that when crisis hits, chances are we’ll all be affected in some way.
How can you protect yourself from the consequences of unexpected?
I’ve learned something in business school which I decided to use in my personal life as a bit of an experiment. This tool has saved me from making bad financial decisions and has led me to learn many valuable lessons.
Most of you would’ve heard about the PESTLE analysis, so it may seem unusual that I’ve used a business analysis tool to prepare myself for the unexpected.
Allow me to explain.
The PESTLE analysis
PESTLE is an acronym for Political factors, Economic factors, Social factors, Technological factors, Legal/legislative factors and Environmental factors. It’s a tool to gather information, analyse it, and then make better decisions based on the analysis.
Marketers use this tool to analyse and monitor the major external and uncontrollable factors that organizations take into consideration when it comes to decision making, as it can greatly affect strategy and company performance. This analysis helps businesses to spot where the nasty surprises may lie in the future, therefore preventing the chance of the business running into the ditch.
Using the PESTLE analysis in your personal life could mitigate many risks as you become aware of the uncontrollable factors in your environment. And just like these companies prevent their businesses from running into the ditch by mitigating their risks, so can you!
The consequences of NOT doing a PESTLE analysis
Looking into each factor, these examples show how detrimental an ineffective or non-existent PESTLE analysis can be:
Nike is enjoying the benefits of low interest rates, stable currency and competitive tax arrangements which help companies grow and develop. All thanks to the US government’s initiatives to respect global value chain transparency. However, Nike’s outsourced manufacturers in other regions like Thailand, Indonesia and Vietnam are facing increased political unrest, causing hard times in business.
Well-known and much loved Mc Donald’s did not seem to catch on in the Caribbean. In Barbados the company closed their doors in less than a year due to lack of sales. The slow economy was cited as one of the factors by a writer for Moneymax101.
American box store chain Best Buy failed in their attempts to appeal to the European market. They failed to analyse the shopping preferences of Europeans, who preferred smaller shops to big box stores, among other reasons. Best Buy also had to close it’s branches in China as they failed to adapt their products to local consumers preferences and did not realize that the Chinese preferred more differentiated product lines.
A simple technological adaptation could have caused EBay to have a competitive advantage over Chinese competitor TaoBao. TaoBao’s edge over Ebay in China, is a built-in instant messaging system where customers can see a seller’s online status and easily communicate with them.
Chinese customers prefer to develop trust by having their own interactions with sellers rather than trusting other users’ ratings. EBay was therefore no match for mighty TaoBao.
Even internet giant Google has faced major challenges over censorship laws, particularly in China. So much so, that in 2010 the New York Times reported that Google would never catch up to Chinese competition. Just shows that you cannot become too cocky in life or business, even giants make mistakes!
Climate change leading to extreme weather conditions pose a risk to major international travel and food markets, disrupting flights and supply chains causing major financial losses.
So what does this have to do with your life’s next chapter?
Using the PESTLE analysis as your personal development plan and prepare for the unexpected
Failing to plan is planning to fail. How can the factors in the PESTLE analysis affect you personally? This free Personal Development Plan booklet by James Manktelow explains how to use the PESTLE and SWOT analyses as your personal development tools.
These business analysis tools are excellent in gaining perspective and setting you on the straight and narrow pertaining to your goals. It’s great to get your hyped up and motivated too!
Never assume that external factors will never affect you, especially if you feel you’re a small fish in a big pond. In today’s ever-changing climate, it’s the small fish that get devoured first. There is nowhere to hide.
Here are some strategies you can use to help you mitigate your risks:
1. Become curious
Politics can affect most of the other factors of the PESTLE analysis, particularly the economy and societal changes. Check out this article by Fact Monster to see why it would be in your best interest to stay up to date with political changes.
Another article by The National Academies Press shows how society and technology go hand in hand. Technology is changing the workplace faster that we know. Read my article on how AI will affect the future of the workplace to gain more insight.
The more you start to pay attention to the factors of the PESTLE analysis, the more you will realize how these factors seem to tie together. These factors together my alert you of an imminent major issue which might affect your personal life regarding your income and quality of life, so keep updated and pay close attention.
If you don’t know where to find this information, start to use Google and YouTube to your advantage. Use the analysis as a guide to what you should be searching for. For example, search for ‘political factors affecting my country, my finances, my job etc’, and work your way down the analysis tool.
Just one session of this will make you more knowledgeable than ever. And it will keep you wanting to search for more information as you go along. Remember, knowledge is power! And this knowledge can have a tremendously positive effect on your next chapter.
2. Diversify your income
When you think of diversifying income, investments such as stocks, bonds, interest baring accounts and rental properties, among others are fantastic ways to diversify your income. Watch this short video which explains in simple terms how to diversify your income.
However, not everyone can afford to invest enough to generate an income that can sustain them when the economy starts to go south, when their jobs are at risk of becoming redundant, or when they’re literally being replaced by technology. Also these investments can be quite risky and is advised for those who can take the risk of losing money.
There are ways that will not only increase your income, but also protect you from any risks of job or financial loss. The best part is, that in the long run, this strategy will give you the opportunity to invest in all the above wealth building investments. I know this, because it has worked for me and so many others.
I’m referring to online businesses. Particularly, affiliate marketing. This type of marketing involves recommending products and services from other companies. So you don’t even need to sell your own products! Click the link to learn more.
The start up costs will be less than your last vacation, and you do not need a degree or even experience start. You can even do it in your spare time if you’re already employed, or if you’re currently searching for employment this is a brilliant way to earn while you learn.
Click here for immediate access to a free set of workshops that will get you started today.
3. Enhance your technological skills
The singer Des’ree said it best in her song ”You gotta be”. She said ‘The world keeps on spinning can’t stop it if you tried to’. And this cannot be more true when it comes to technology.
Technical skills makes you a more attractive candidate to employers, helps you to work more efficiently and therefore, boosts your confidence. It also frequently means a higher pay.
When you have technical skills you are sufficiently equipped to use the internet to your advantage to diversify your income as mentioned above or in many other ways.
4. Change your mindset from Reactive to Proactive
No one can ever think of every single circumstance to prepare for. However being proactive, instead of reactive means that you have a clear mind and resources to make better decisions when unexpected hits.
Reacting to events means that you are caught by surprise since you did not anticipate the future. This causes panic and hysteria, and that is where bad decisions and catastrophe starts to breed.
Being proactive means that you are acting before events even occur. You are prepared, you have sufficient resources and back up plans to weather the storm, and your decisions are based on logic and reason, not panic and disaster.
Watch the video below and make some comparisons. Where do you see yourself on the spectrum. Are you proactive or reactive? Include this as part of your personal development plan.
Will your next life chapter look blurry with little chance chance of clearing the fog, or will you become more aware of your environment and ready yourself for uncertainty. It wouldn’t hurt to start treating your personal life like a business. Not only will you gain awareness and have better insight about imminent events, but you will also learn discipline, make better decisions and have a greater respect for your own life and well-being.
So what will your next life chapter look like?
That picture depends entirely on you.
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