The Hidden Price of Entrepreneurship

What is one of the most common characteristics amongst business owners? Is it ‘hustle’? Or ‘street smart’? Or ‘charisma’?

Well they have all of that, with different degrees of sophistication.

What about ‘drive’, ‘passion’, ‘hard work’?

Yeah these too.

Now there is one thing you and I have not thought a lot. And most of us would not readily admit it. This particular characteristic is commonly shared amongst business owners.

This is the dark side of entrepreneurship.

It’s ‘anxiety’.

Entrepreneurship does not come without its price. It is a constant battle in your head, constant worry and constant stress. Business is the ultimate sport, not physical nor intellectual. It is the ultimate 24/7 mental sport.

And it is mentally draining (very).

When we work with struggling business owners, we don’t just turnaround their business. We also turnaround the person. These owners are the ones who need to wake up the following morning to face their nightmare all over again. It doesn’t matter how good our turnaround strategy is, without them in their right mind nothing good will happen.

Have you bled throughout your entrepreneurial journey? Have you got your battle scars? We all have, and these marks, these scars, they are to forever remain within us. They have affected us, shaped us, turned us into who we are. Are we sane? Are we normal? Are we mentally strong? Or are we depressed, stressed, burnout?

Anxiety is real – that is the hidden price of entrepreneurship that no one is talking about.

Please remember that you are not alone. Find a support group, talk to someone. Admit that you feel weak and you feel anxious. In fact, talk to anyone, maybe those that you meet at coffee shop (or bus stop). Just being able to tell someone else will ease the pain – trust me.

Get another person to be your accountability partner. You need someone else to watch over you.

Do not go it alone.

 

What Marketing Budget?

When a business finds itself in financial trouble there is an inherent meaning which most consultants don’t get. The business has ‘financial’ trouble. It needs every dollar to survive. The last thing they need is another marketing budget for that campaign to get more leads which presumably will get them out of trouble.

We need to understand that there is no money left (well maybe a little bit).

We need to fix the cash flow first, cut cost, chase payment, move (not make) some cash into the bank (if there is any), and fix the fundamentals. Then we have a little bit wiggling room. These precious resources are all they have. That’s it, there is nothing else. If it is not enough then that’s it – it’s not enough – start to think about an exit strategy. The more time is wasted the worse it will get.

But don’t lose hope because it might be just enough for us. The challenge is to use these little resources to turnaround the business. And this is when we get a bit ‘creative’. The words ‘free’ and ‘creative’ will be your best friend in the next few months. In order to make all of these to work, we need to be creative in using freely available tools around us. The internet is a great place to find them. But also do some outreach to your friends, families, etc. – not to get free money but free contacts, advice, knowledge, etc.

Fix the fundamentals, hang on to every resource, and be creative to get and use more resources (free is preferable). Then we will have a good shot to turnaround the business.

Now one more thing. While it is great to have a strategy, the real impact will happen during execution. And things will change, the great strategy will be rewritten, and execution will stall.

So persevere, be flexible, focus, and take it one step at a time. We might not have the big budget enjoyed by larger companies. But our mind and mental strength will make up for it.

 

 

Breaking Point

Have you ever heard the story about a frog that gets boiled alive?

Well, there’s this little frog. It somehow ended up inside a big pot of water which was conveniently put on a stove. The stove was on by the way (but only with low fire) which means water got slightly warmer, then slowly got a bit hotter, and a bit hotter. Interestingly the frog didn’t try to jump out of the pot. Instead, it just sat there not moving a single muscle. So the water got even hotter until it finally reached boiling point. The frog didn’t move at all (you wonder why).

It eventually died, boiled alive.

This didn’t happen, of course, no frog was harmed during the writing of this story.

It could happen though. The science behind this is simple. The frog adjusted itself to the increasing heat of the water because it got hotter slowly. The poor frog would have jumped out of the pot if water got hotter quickly. But it didn’t, so it decided to stay and try to overcome (and persevere) in the midst of hot water. It got used to the new heat and when the heat went up it adjusted itself again. Then the time came when it was too late. It got to the boiling point and the frog realized it lost the battle – it was boiled alive.

Let’s use the same principles in overcoming tough times in business. The question we need to ask ourselves is similar to the frog. “Am I being boiled alive and I don’t even realize it?”

We also tend to adjust ourselves to difficult times. We become stronger so we could face adversity. There’s nothing wrong with that because it’s us (the person). What doesn’t kill us makes us stronger. It is very true indeed.

However, when we go through tough times in business it’s not only us that gets pummeled. It is the business itself also. So let’s rephrase the question a little bit now focusing on the business. “Is our business getting boiled alive and I don’t even realize it?”

Business is made up of different substances. Its blood vessel is filled (as you have probably guessed) with “cash”. While its infrastructure is made up of a complex relationship between owners, staffs, customers, suppliers, and other stakeholders the whole thing is run with cash.

Now, with tough times this complex infrastructure is damaged. Unlike the human race, a business does not get stronger after getting damaged. For example, a brand does not get stronger after it got bad publicity. A business does not lose customers and gets stronger as a result.

The people inside the business got stronger though. However, these experiences, skills, and everything else that the people learn during difficult times – they don’t always stay with the business. They move around following the footsteps of their owners.

The business itself would suffer. Its complex infrastructure split, its ability to earn and keep cash broke down. It would do that until such time that it would completely break. That is the breaking point.

So what’s the point of all these you might ask?

It is crucial to know the breaking point of your business.

As much as we want to persevere during tough times our business is separate from us. It does not have our brain, heart, and soul. We are the brain, heart, and soul. Just like the frog, we cannot control the heat around the business. On the other hand, we can control whether we want to make the jump or not.

Do you know your business’ breaking point?

 

 

Know Your Numbers

People ask me what the first thing to do when a business is in trouble. The obvious answer is “Cash Flow”. Cash is king – everyone knows that (almost everyone). So unless cash position is healthy everything else will fall apart. Fix the cash, stop the bleeding, then panic disappears and calmness ensues.

What the not so obvious answer is this: “know your numbers”

Before we try to fix cash flow it is imperative that we know the numbers. Everything from sales figure, profit & loss, cost of goods, cost of operations, hidden expenses, and so on. If we are to have a chance to get to the bottom of the pit we need to keep digging .. and keep digging.

Some people are happy enough to get “an idea” of where things are – trusting their gut feeling and intuition. There is nothing wrong with gut feeling and intuition. Those are important to make a quick decision. But when the time comes to make a more involved and analytical decision such as “where to cut cost that does not affect the core business” – intuition can be misleading.

Knowing your numbers can be heart-breaking. Most business owners in trouble might avoid this because they know the numbers are bad. They couldn’t face reality. Some convince themselves into denial – hoping and praying that everything will turn around tomorrow, or the next day, or the next day.

The problem is of course, the longer they wait the worse it will get. If you cannot do anything with the business then at least do something else. The point is, you have to do something. And all of these start with knowing your numbers.

Knowing your numbers will not kill you, not knowing your numbers will.

A lot of things in a business are out of our control. We can only do so much, try to anticipate, be pro-active, and response to the best of our ability. Everything else is not our problems because we couldn’t control them anyway.

So don’t feel bad or afraid, we are only humans. In other words, don’t be too hard on yourselves. Know your numbers and improve, or exit and do something new.