Single Point of Failure

[00:00:01] Welcome to Business Finance and Soul, my name is Shaun Enders, and I'm a curious entrepreneur. I love exploring business, personal finance and consciousness. I'll jump around topics, offer my opinions, and occasionally interviewing interesting people. Looking forward to going on this journey. Let's be curious together!

[00:00:21] Welcome back to Business Finance and Soul, I'm Shaun Enders. Today we're going to talk about a single point of failure system. Now, at first glance, you would think a single point of failure system is really something that is just kind of, I guess, meant for the business world.

[00:00:48] And not something that we would think of so much in our lives. But I do want to talk both from a personal perspective and for our businesses on how a point of failure system redundancies things that we create in these failures.

[00:00:58] And how a point of failure system redundancies things that we create in these fail-sap moments why they matter so much. By definition, a single point of failure is something that if it fails can take down the rest of the system.

[00:01:18] And so, when I think about both my personal and business life, I think of my fail-sap efforts. I think the reason for this is because I've run a small business for the past 18 years.

[00:01:31] And you don't survive almost two decades in business without creating some mission critical redundant systems. In my personal life, I feel a strong sensory responsibility too. You know, for my wife and kids and our lives not only for today but also for our legacy.

[00:01:50] So today I'm going to cover both our business and personal life single point of failure systems. And on the business side we're going to cover some risk assessments and identification redundancy systems diversification. You know, really getting into regular testing and monitoring training and education and financial reserves.

[00:02:16] And for our personal life we're going to talk about financial savings skills diversification and your social networks health and wellness. And of course personal development insurance and overall you're back up plan. So the goal today is just to bring this to the forefront.

[00:02:38] The areas in your personal or business life where you might be vulnerable and to recognize that if we have a system where if we failed, it would be catastrophic.

[00:02:55] We need to take a look at that. But we have a system where we understand, hey, no matter what happens, I sleep well at night because I've thought of the contingencies.

[00:03:06] I've thought of a plan B at all times and it's easier said that done, but you do have to sit down, you have to go through this.

[00:03:14] And so from a business perspective, you know, you really want to go through a risk assessment and identify the areas within your organization.

[00:03:24] That are important. If you run a small business, you know, you want to look at your operations, you want to look at your IT infrastructure, your human resources, your supply chain, your accounting.

[00:03:37] And this really involves mapping out all those critical components and processes that if one of them failed, it would cause a pretty significant disruption or halt operations. So what about your sales, your business development or your leads? Does everything come through one source or multiple sources?

[00:04:01] And by going through this, I'll give a story which really helped us. I had gone through a risk assessment in 2019 now. I didn't obviously know that COVID was coming in 2020.

[00:04:14] But I wouldn't assign another five year lease for our building and done remodels and tenant improvements. So I definitely don't have a crystal ball, but this shows exactly one area that I was prepared for and helped us tremendously.

[00:04:29] So I had always wanted to have some aspect of our business operating in a remote function. So we did a one week shutdown in office in 2019 to see how we would function if we were all remote.

[00:04:45] And I wanted to stress test all of our systems from accounting and IT and operations and human resources. I wanted to see what happens when a lead comes in, how do we function?

[00:04:57] But really what's the SOP or the standard operating procedure for that when we're not able to just walk down the hall to each other.

[00:05:06] And so when COVID came in 2020, it was go time. We were told to shut down because we were not considered a quite a, a central business. And so those systems came into play. We were able to overnight work from home without skipping a beat. Now, it was stressful.

[00:05:26] But we had a plan in place because of this very scenario. So if you're running your business and this can be just you and how you actually operate within your own company or running your entire organization.

[00:05:44] But either way, you really want to kind of stress test. You know, the areas that we've talked about and create some redundancy. You know, you need to implement these redundant systems where any of those operations that are at risk are covered.

[00:06:01] And that could mean having, you know, back up back up multiple backup cloud solutions for data, you know, multiple servers. It could be that you're using, you know, not only Microsoft, but you're also using Dropbox. Maybe for some of your most important things.

[00:06:25] So you've got multiple plans happening that if one failed, you've got the other one that's able to step up and fill the gap.

[00:06:33] It could mean having multiple suppliers or any duplicate systems that can take over seamlessly in case of a failure. You know, so for one of us it's it's it's odd.

[00:06:46] But we have actual relationships with recruiting firms even though we are a recruiting firm the company that I run transition staffing group is a recruiting firm. We spend all of our time recruiting for our clients.

[00:07:00] We actually have relationships with external recruiting firms that that love to bring us talent. Well, at any given time we have multiple relationships because

[00:07:12] One might not deliver down the road. One group or one person that I love dealing with could be gone or out of office when we need that that individual. So we have two to three really good relationships.

[00:07:29] And I always recommend that you have that fail-safe system in place. It doesn't mean that we always work with them at the same time, but it means that we continue to have those relationships in place. And when you think about your employees, is there a bottleneck of information?

[00:07:44] A lot of times in small business, you'll have one person that knows everything. Hopefully it's not the CEO that just knows everything. Hopefully you've gone beyond that, and that you actually have some sort of download for all the knowledge that you have.

[00:08:00] But you are extremely vulnerable if you have an employee that just knows how to get around and nobody else knows what to do when they are gone. And that's actually much more common than anyone can imagine because it just happens over time. It's very organic.

[00:08:17] Nobody goes into it thinking that's what they want to have happen. But they just don't have a place or a plan for redundancy. And so you need to think about who could step in and replace that person if needed.

[00:08:33] And when you avoid that over reliance on one single person, you really spread that risk. You reduce the impact of massive failure. I actually have an example of where we built a video library surrounding our operations and human resources and some accounting and onboarding.

[00:09:01] And we happen to use a program called Bloom, which is great. Last year, early 2023, we lost a key employee in our HR and observation. We were able to seamlessly replace her with zero downtime. Because we have that system in place of where immediately her replacement came in,

[00:09:26] we had videos of exactly how to navigate, how to work with our unemployment filings, how to onboard individuals, how to navigate our software. And it's just so much stress out of things. And yeah, I'm living proof of just doing these things day and day out of where.

[00:09:46] When things hit the fan, you're covered. But you also have to do regular testing. It's great to test your systems annually. You know, to think about is everything up to date. What's changed? Where am I vulnerable?

[00:10:02] Of course, monitoring is a good idea, but you have to actually walk through it and do a full test to really evaluate things. So what I mean by that is you can just skim over and look at it and go,

[00:10:13] yep, it's all in place where you can run a real live operation simulation. You can do something that's going to stress test you immediately and see where things end up. You have to continuously monitor these things. And you have to consistently detect potential failures or vulnerabilities

[00:10:35] because there will be a full blown crisis at some point. And whatever that is, it should never derail your business. It should not feel like the walls are coming, you know, tightening around you and that your world is becoming much smaller.

[00:10:55] So you should be able to move through this in any great operations person should know this. But if you're not in that position, you really should start looking at, okay, what do I do? And that's going to go to the training and education.

[00:11:10] Yeah, that's going to be looking at, okay, how are we trained in these procedures just in case? How do we make sure that we mitigate the effects of a failure? And that continuous training, that education in that space is something that you want

[00:11:30] to set money, resources, some time towards on an annual basis. And the last part here from a business perspective is your financial reserves. You of course you have to have that financial buffer to shock the unexpected events. And we all saw that during COVID.

[00:11:52] Right when it happened before the government stepped in and created a backstop, we felt that impact of what happens when you don't have financial reserves. What choices are you going to make?

[00:12:08] And those were some tough ones for us because we were in that position of where we said, okay, we're faced with this blacks one event and immediately you go to your reserves. Well, how much do we have? How long can we cover what's mission critical?

[00:12:25] But we went right down that list and created an action plan. So that's on the business side, what about the personal life? I think a lot of us don't necessarily think of our personal life from a business perspective.

[00:12:38] So we don't look at our personal life and go, well, what is a single point of failure in my personal life? What does that even mean? Since we're already talking about financial reserves,

[00:12:47] I think we've got to talk about financial savings, building an emergency fund to cover unexpected events, unexpected expenses, or a loss of your income coming in. I know that the conventional wisdom is three to six months of living expenses. That's really good.

[00:13:04] Some people will say up to a year. Dave Ramsey might say up to a year. Those are rule of thumb ideas and they're great. And I think that you should subscribe to them. And I also think that there's a temptation.

[00:13:18] There are sometimes to dip from that emergency fund because maybe an emergency hasn't happened in two to three years. So you start seeing that money there and it becomes very tantalizing to use it for a vacation or something to that effect.

[00:13:32] But I really think that you need to have that sitting in a high yield savings account and allowing it to be their building interest and creating total peace of mind. That's what that money is there for.

[00:13:44] Nothing else. You can't think of it that it can be deployed in any other way, other than taking care of you if the sky falls. Number two, skills diversification. It really leaning into additional skills and hobbies.

[00:14:02] Not only that in richer life but also could provide alternative sources of income or activities. In case your primary job either goes away or you're not excited about it or passionate about it anymore. I don't think that we want to sit on our hands until something happens.

[00:14:21] I think we want to look at it and go, well, what is a single point of failure in my own career? Like do I have any other marketable skills outside of what I'm doing right now?

[00:14:33] I think this conversation is coming to the forefront because AI is changing the landscape for a lot of careers and people are looking at themselves and going, can I be obsolete? Can I be pushed into a space of where my role is diminished?

[00:14:49] All of a sudden the value that I used to bring is become commodisized. Now it's not as lucrative anymore. I think that it's important to look at your hobbies first. That's important because it expands your network of people you interact with.

[00:15:13] It helps shape your world in a different unique way and from a skills perspective, we just don't know what the future holds. We want to stay sharp, continue our education in the areas that we're excited about.

[00:15:26] Then we can fully appreciate and engage a future where one door closes in another door opens. I'm going to give an example of this podcast as an example. Because not only is this a hobby of mine, I mean I've learned so much more than I ever expected

[00:15:42] by launching this. I have no idea what the future holds but I can tell you that I'm growing in my personal life. If everything crumbled around us because of some massive, unforeseen event, I feel like because I'm always learning, because I'm always kind of bringing in a different

[00:16:06] skill set. I don't know if I could monetize it in a way that would be meaningful yet, but that isn't the point. I think the point is taking the steps towards saying, I really enjoy doing this and there might be a path towards some type of

[00:16:28] a financial opportunity there. So I do believe in getting out there, enjoying your hobbies, continuing your education and making sure that you're not ever putting a place of obsolescence. No social networks, I believe something that we should always be building. Not just more Instagram followers or Facebook friends,

[00:16:51] you know, I'm talking about seeking out others who we respect and we want to get to know better. That can be friends or business associates, but really taking time monthly, twin joy coffee or lunch with at least someone new,

[00:17:06] or someone that we know that we just haven't even gotten out and spent some one on one time with and expanding what you know about each other. Because this times change, they're going to change, you're going to change.

[00:17:19] And we want to know that we have deeper meaningful connections with others that will be there with us during different seasons. Sometimes it's easy to look at your friends and think, gosh, I have a lot of

[00:17:34] friends, you know, but do you? You know, maybe you only have a lot of acquaintances. Do these people really know how many siblings you have? Where you went to school? What your hopes and dreams are, what your fears are, and vice versa, do you know anything about them?

[00:17:51] Because if the answer is no, they're they're a solid acquaintance. They're not a deep friend. So I think strengthening in our social network is huge in terms of getting away from having a kind of single point of failure mindset of where you really when anything goes wrong,

[00:18:10] is anybody really there for you? These are questions that I ask myself. Health and wellness is huge. It's number one, actually. And it's the easiest for all of us to take for granted.

[00:18:24] You know, my daughter is such a strong person. She's a competitive athlete. She does great in school. She also has extremely strong opinions. She sees the world one way and that's a reality.

[00:18:36] Well, this past weekend she got sick and she hasn't really been sick like this for, I don't know, five years if I'm thinking back. She laid in bed for two days and was pretty vulnerable and weak.

[00:18:48] And I think it's a good lesson. You know, when our health is taken away from us, I mean nothing else matters. We'll give anything to simply just feel good again. And I saw that, you know, where you have somebody who's extremely strong and just likes

[00:19:07] to do things the way that she likes to do things. And you see her in this space of where you know, she just like to be back to where she's feeling great again. And that's how I think

[00:19:22] all of us feel it actually sickness is a great equalizer. You know, because it humbles us and it makes us understand that this body that we have can become our health can become a single point of

[00:19:37] failure. You know, we need to be proactive and healthy. So it's not just one thing that can take us down or at least it's not going to take us down easily. I want to talk about insurance. It's not as

[00:19:52] sexy for a lot of people, but it's an absolute necessity for all of us. You know, we have to look and make sure that we're adequately covered for our health, our life, our property.

[00:20:03] Annually, we should be going through our policies and just really looking at what safety nets that we have in place in case of a financial loss or a big event. You know, I just reviewed our life

[00:20:15] insurance because I had noticed our term policy was inspiring this year. There's 20 years since I got the last policy. So you know, I can't believe it's here. But fortunately, I made it the last

[00:20:25] 20 years. Nothing happened and we didn't have to use it, but its money will spend in that space. And so although I feel healthy and I don't expect to die in the next 20 years, I have young kids.

[00:20:37] I need to be sure that I have plans in place. So I got a new policy that's going to cover me to tell my late 60s. And I just feel good knowing that from a financial standpoint,

[00:20:47] anything that happens, my family is going to be covered immediately without having to jump into asset liquidation and things like this, they just have that peace of mind. And I think the

[00:20:58] same should be said for your home and your auto. You should be reviewing those, your health insurance, you know, power things stacked up for you this year based on the way things have changed.

[00:21:11] So insurance, although not the the big area in life that we all love to just talk about, it's huge necessity and we all carry it in one one former another. And backup plans,

[00:21:29] you know, in the end we all have to have a backup plan for our business and our personal life. You know, I've always in my mind had a backup plan and then I have backup plans written down,

[00:21:42] you know, in their early days of our business, if it failed, I knew exactly where I was going to go to work. You know, and what I was going to do and that that believe it or not kept me feeling

[00:21:53] optimistic is there were absolute times where we were terrified and there was nothing really, you know, very, very fortunate that we were able to weather that storm. But I knew in my mind,

[00:22:09] you know, what no matter what, I'll always be taking care of. And nobody else is going to take care me for me. I have to take care of me. And that kind of backup plan creates a sense of confidence.

[00:22:30] Turns out the backup plan did have to come into play later in life because of COVID. And you know, we ended up having a really enjoyable time with our family. We leaned into the

[00:22:42] experience of being cut off from our normal lives because we weren't really stressed. We knew that if everything hit the fan, we'd be fine for a long period of time. And so for us,

[00:22:53] because COVID didn't take us down and we didn't lose anyone close to us from COVID, we really had an opportunity to enjoy the way the world had shifted. And although I don't want

[00:23:11] to ever go back through that again, we made the most of it because we've had plans in place that we were able to deploy during that type of event, which is crazy. And it's not a luxury

[00:23:26] that most have. But if it's important to you, you're going to, you're going to make it work for you and your family. You're going to begin planning now for the next thing. Whatever that thing is

[00:23:37] and you will stress test it and you will make sure that it works. But you have to be systematic, you have to be intentional, you have to know that your life, your business can be boiled down

[00:23:51] to single points of failure. And it is of the utmost importance to assess your life, slow down. You know, there's a saying that Navy Seals have and I love it because we use it in our business.

[00:24:14] And it's slow as smooth and smooth as fast. And we use that, I use it in my personal life. We use it in the business because we want to slow down and really smooth out what's happening

[00:24:30] in that moment. And when we do that, we know that once we smooth it out, we'll go faster. We'll be able to sustain the speed because we actually started with the right plan in place. So

[00:24:44] that's what I want you to do if you're not already doing it. If you are, congratulations, you're in the right space and continue doing what you're doing. But look at your business life,

[00:24:55] look at your, the way that you work, look at your life, look at your, the way you interact with your personal life. And all of the things within your personal life and take some time

[00:25:09] to really go through that evaluation and find out, are there any single points of failure happening for you now? All right. Well, until next time, stay curious and enjoy the week.