March 17, 2020
The Difference Between Risk and Uncertainty
Risk and uncertainty are two often confused terms in business. Risk is measurable and you can predict the possibility of a future outcome. With uncertainty, you cannot predict the outcome. Risks can be measured, quantified, and managed, while uncertainty often cannot.
While uncertainty in business cannot be predicted, it can be prepared for, and you can manage uncertainty while still growing your business. It’s all about planning and preparation. The vacation rental market is subject to uncertainty with economic slowdowns and consumer sentiment shifts often being the cause. Currently, many business leaders are experiencing uncertainty with COVID-19 and its impact on the travel industry.
The good news is, there are ways to deal with and manage uncertainty and even grow your business in uncertain times. Here are a few tips!
Dealing with Uncertainty
We live in uncertain times. Socially, economically, and politically we’re in a period of uncertainty that affects how and where consumers spend. Add to this the rapid growth in vacation property rentals with online travel agencies like Airbnb and others, and if you are a vacation rental property manager, it’s easy to see why you may be uncertain about your business.
The first step is to understand that uncertainty causes stress, which can result in bad decision making, or worse, inaction. Dealing with uncertainty is the solution. This is what you can do.
- Prepare – Have a strategy and prepare for every eventuality you can think of. With a plan of action, you’ll lower both the risks and the stress associated with uncertainty. List the best and worst possible outcomes, and how you plan to deal with them.
- Accept Change – Uncertainty breeds fear, and fear of change breeds inaction. Change can be positive with the right outlook. It’s the fear of the unknown that often leads to problems. The best-case scenario is to accept that change isn’t always bad. In fact, it could open new avenues and opportunities! Keep an open mind and solutions will come.
- Stay Positive! – Uncertainty and negativity are close relatives. It’s natural to feel down in periods of uncertainty. Try to bring in positive thoughts and avoid thinking about the worst that can happen; it usually isn’t that bad. Elevating your spirits can reduce the stress of uncertainty.
- Don’t Over Think – This is one of our biggest problems as human beings! We all tend to fixate on something when it’s bothering us. While curiosity is good, overthinking can be very damaging. Business problems have a way of working themselves out, especially if you have a plan. Put it in action and don’t overthink the problem.
- Keep Your Eye on The Big Picture – Don’t ignore the big picture. Even if you don’t like the outcome, there is usually a reason behind uncertainty. Embracing change and preparing for it can help keep you at ease, and able to react positively.
Managing Uncertainty and Growing Your Business
Once you’ve got your fear under control, you can take proactive steps to manage uncertainty and even grow your business in uncertain times. Planning and preparation are critical. As you begin to better understand the changes coming, refine your business plan and recognize the opportunities to grow.
Taking steps to solidify your brand by getting quality control in order and diversifying your products or services – for example partner with other local businesses to drive traffic, and knowing your numbers to better control costs are all smart moves.
Keeping your house in order is one way of managing uncertainty. While you may not be able to predict the future, preparing for change is a smart business practice.
The only constant is change. Understanding what’s important to your customers and providing an exemplary guest experience can help you to stand out, and even thrive in uncertain times.