The Worst Case Budget Is Essential.

In any case, we should always make the worst case.

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There are three reasons for this:

(1) first, there is no certainty in the market, and there are often unexpected situations, and there are no predictions that are truly reliable.

Countless cases that can avoid bankruptcy eventually force people to invest enough time to consider the worst and make necessary preparations for such a situation.

Some people think this is a pessimistic view, so it is right.

It's useless. We should not be misled by such people.

This is only responsible.

And true leadership.

Competent leaders can keep calm in difficult situations.

However, only those who are very experienced in dealing with crises, at least those who can foresee such situations, can always remain calm, because they have fully considered this matter, or have made adequate preparations.

(2) the second reason is that only by preparing the worst-case budgets can we find out which aspects of the enterprises are flexible and what ways to achieve this kind of flexible response.

If necessary, these aspects will be able to respond in a timely manner.

There have been many articles about the topic of flexibility, which is very reasonable.

However, only a few people correctly distinguish the areas that can achieve flexibility, and how to integrate flexibility into the whole enterprise if necessary.

This requires all business activities to be analyzed and considered. The best way to do this is to make the worst case budgets.

The worst case varies from enterprise to company.

One way is simple and crude, but very effective.

If we have to face a 30% drop in sales, what will happen to the company? Sometimes people think it's too much.

How could such things happen? In 1990s, people realized that this situation could happen, whether it was caused by the economic environment or the progress of science and technology.

(3) the third reason for preparing the worst case budget is that it is the best way to comprehensively assess the state of the enterprise and its internal work.

After such a drill, we understand the business more deeply than before.