What To Do When You’re Backed Into A Corner (5 Strategic Keys to Capitalise on During Desperate Times)

Once upon a time, I had a vision of business victory. I drew a straight timeline of my (forecasted) success on a blank A4 paper.

That’s it, a straight line.

Never did I know that my visionary picture was not complete without various corners of setbacks. The simple straight line transformed itself into many chaotic abstract paths.

While success is what we desire, often a desperate situation precedes a great leap ahead. Just like pulling a catapult’s sling for a powerful shot, a painful stretch prepares for a strong comeback.

In this article, we will look at five strategic keys. I call these the ‘CoRNNR’ (read: corner) strategy for it is useful when we are backed into a corner.

The first three keys form the necessary elements. The fourth key is the most challenging one, and the final fifth key is the glue that will hold everything together.

CoRNNR strategy is being laser focused during a tough situation, for a powerful comeback. Coincidentally, setbacks, failures and crises provide fertile ground to discover, develop and strengthen our cornered business.

After all, a cornered army is a dangerous one.

“When you surround an army, leave an outlet free. Do not press a desperate foe too hard.” — Sun Tzu

Core Strength

Pressures force us to switch on our survival instinct. We need to become our best selves to endure hardships. There is no time to muck around.

About a decade ago, we acquired our first business in mining industrial wholesaling. We supplied safety gears and industrial strength chemicals to workshops and factories.

Our business was operating in a highly competitive market with notoriously low margins. A few years into the business, several national players entered the market and started stealing some of our significant customers using aggressive pricing tactics.

It was a typical scenario of a small business getting bullied and squashed by large corporations. We were losing customers. We knew we had to compete differently from the major players to survive the onslaught.

And so we started to look at what we could do that our big competitors couldn’t.

It was undeniable that our smallish size meant we were more flexible and we could respond faster to our customer’s needs. Our large competitors had to comply with complicated operational procedures. We didn’t.

We then found out that a small number of engineering workshops around our area were not too concerned about prices. Instead, they preferred to work with vendors who could guarantee fast delivery of supplies when required. It was something our big, fat competitors had troubles fulfilling.

Upon this realization, we started to build our business around a simple strategy. It was the assurance of quality supplies with a fast delivery turnaround. We could do that because we were small, flexible, local, and highly motivated.

It became our core strength.

We found our unique competitive advantage, and it opened up a whole new opportunity for us. Our large competitors backed us into a corner, unknowingly positioned us at a unique vantage point. It enabled us to see how we could compete on our terms in a crowded market.

Key #1: Find a core strength that allows you to compete differently from your competitors.

Resources at Max

During the onslaught period, when the big players stole our vital customers, we suffered a severe cash flow problem. This situation got worse when the mining industry crashed at around the same time. Most of our customers were operating in the mining industry.

It was a double whammy.

The cash flow issue pushed us to become meticulous spenders. We learnt that we paid too much for several services such as broadband, landline, and mobile phones. We also found out that a lot of work our staffs were doing could be outsourced or automated (it’s cheaper that way).

It was amazing how much cash was bleeding through areas we could either switch to a different provider or stop altogether. We liked this exercise so much we decided to do it regularly. It was a responsible, well-thought cost-cutting.

Desperate times hurt businesses. Cash bleeds through different outlets. A regular cost-cutting exercise would keep our resources shipshape at maximum capacity and best return.

Key #2: Make sure your limited resources work as hard as possible for your strong comeback.

Niche Domination

So we knew how to compete differently, and our resources worked super hard to fuel our survival. It’s time to revisit the customers.

We had to let go of some customers who did not require the value we offered through our services. They were casualties of the price war.

We tried to focus our efforts and resources on a select group of premium customers (premium for us). We were confident that when we became good at something, we would naturally grow.

So we kept our eyes fixed on the chosen ones (read: customers).

What we didn’t realize back then was we stumbled upon a niche. A niche perfectly placed for our little business. In a nutshell, we matched what we could do best with the needs of a small corner of the market. It was not a big slice, but it was growing, slow but sure.

Difficult times propelled us forward through a unique path we would not find otherwise. We discovered a niche market big enough for us yet small enough to dominate. We knew we could compete comfortably against the big players because we found this niche through our unique competitive advantage.

Key #3: Use your core strength and revitalized resources to dominate your niche.

Nurture the Efficiency Seed

Our previous strategic keys can be summed up into “utilizing resources at maximum capacity to service a niche market that is a perfect fit for our unique core strength”. The final result is a highly focused, well-oiled, efficient business. The first three keys will integrate into one.

There is one small challenge, though. We can only build efficiency over time through patience and consistency. In short, it takes time, blood, sweat, and tears to perfect the efficiency engine.

It is, in essence, sowing and nurturing a seed; I call this the ‘efficiency seed’. This seed is the culmination of the previous strategic keys.

Nurturing efficiency is the most challenging part of CoRNNR strategy because we need to let go of everything else that does not contribute to servicing our niche customers. And that includes other potential customers, products, suppliers, and so on. We have to fight the temptation to try out different things. We must focus on what we can do best within the niche market that we have chosen utilizing our limited resources to the max.

Nevertheless, we will start to doubt ourselves.

But remember, we sow seeds in dark places, in obscurity where it is often cold and lonely. And it takes time to nurture them before they germinate and grow roots.

Similarly, we discover these strategic keys during tough circumstances. For only during desperate times that our perspective changes, forcing us to see pathways we would not consider before. People might misunderstand you and even mock you for your new focus, but it is important to keep playing to your strength and keep moving forward.

The next and crucial final key will help tie everything together in a beautiful little bow.

Key #4: You only become the best in your chosen niche market through focus, patience, consistency, and persistence.

Resilience to Prevail

Tough times demand resilience. We need to make a conscious effort to focus and power through. Resilience is the substance that holds everything together.

Resilience was there when large corporations squashed us. It was present when we scrambled through a cash flow problem. And it held us up when we decided to focus on servicing a small number of engineering workshops, leading to the discovery of our niche market.

Think of it as a mental muscle that strengthens your spirit whenever you feel defeated. Use it when it is difficult to take the next step. Use it also when certain people are trying to pull you down. And finally, use it when you are confused and lonely.

Now, the final twist to the CoRNNR strategy.

How do we develop our resilience muscle?

Well, there is no short cut. We can only develop resilience through desperate times.

Just like physical muscles, resilience muscle grows when it is stretched under heavy pressures. You can see how useful CoRNNR strategy is when we are backed into a corner. Because not only our perspective changes during difficult moments, our resilience also grows.

CoRNNR strategy is a full circle. It begins when the going gets tough and only when the going gets tough do we get to grow with it.

Key #5: Harsh circumstances build resilience, embrace these times for it is the precious resilience that will hold yourself (and your business) together.


Just to recap:

Key #1: Core Strength
Key #2: Resources at Max
Key #3: Niche Domination
Key #4: Nurture the Efficiency Seed
Key #5: Resilience to Prevail

I hope these five keys have been helpful.

Keep the momentum going and keep going strong.

“When you are backed into a corner, you can give up or you can use that corner as a stepping stone.” — Fredy Namdin

As published in The Startup: What To Do When You’re Backed Into A Corner

Failure Is Not The End

“Haha, an extra $350 is not bad at all,” I was talking to myself. ”All I have to do is change the purchase date.”

I owned a Telco Agency franchise that represented some of the biggest Telco companies in our state in Perth, Australia. Our franchise group was so dominant that customers often received better deals to purchase the latest mobile phones from us than if they dealt directly with the Telco companies. We pretty much ruled the market.

We started with one franchise and moved on to add another two. Life was good. It was even better when I figured out how to get monthly bonuses simply by .. changing the purchase dates.

”Fred, how did you do that?” Anton, another franchise owner, was wondering. “You have been getting the bonus for 3 months in a row now.”

”Well, our sales staffs are very hard working,” I said to him.

”I need to steal a few of them from you,” he said jokingly.

”Yeah, you can try, they are loyal to one person only, me!”

”Haha, we’ll see about that,” he smiled.

Anton was not going to steal anyone from me. His sales staffs were twice as good as mine. He was one of the best franchise owners I knew. He knew the industry well and he was such a good leader. Sometimes I wished I worked for him.

Being a not-so-honest franchise owner, I tried to find other ways to maximise profits. So I learnt the system and every now and then I found loopholes. The latest one being a simple change of dates that would magically improve my monthly sales to ‘earn’ bonuses.

***

’Sorry, your account has been deactivated’ – a message suddenly appeared as I tried to login into the franchise network.

I didn’t immediately make the connection. I thought it was a system error. It was not. My account was disabled. They figured it out. My ‘creativity’ had been found out.

The weeks that followed were full of drama. I was fined and given a warning. They let me off easy because I had a good record as a franchise operator. I learnt my lessons though, no more changing dates for the bonus.

”Well, we got our agency back,” my wife said to me. “Please try not to cheat the system again.”

”Yes dear,” I said, feeling down.

I worked so hard after that incident. I needed to prove my ability to build the franchise without resorting to dirty tactics. I had to redeem myself, reclaim my self-respect and push away any self-doubt.

It was amazing how an embarrassing incident could turn things around so spectacularly. Maybe it was not so bad after all. I found my strength at the bottom of the valley.

***

”Did you hear?” my wife was panicking. “The Telco master franchise has lost all of the major Telco accounts.”

“What do you mean ‘lost’?” I started to panic myself.

”Lost as in the big Telco companies are not selling through us anymore,” she tried her best not to faint. ”We are left with small players.”

”It is barely enough to cover rent,” I said.

”I know!”

”So what are we going to do?”

”I don’t know!”

It did not take long before we started to feel the pressure. Small Telco companies typically tried to dominate certain corners of the market. All of their products were tailored to a very specific slice of the population. A great example is an unbreakable (but ugly) mobile phone designed specifically for the construction workers. It was hard to sell their products to the general public that visited our shop.

Making things worse, those big Telco companies started to open up their own shops competing directly with us. So tell me again how we were supposed to survive? It was impossible. Our sales dropped by more than 70% within a short period of 6 months.

I lost my ability to think clearly. I just wanted to stay in bed all day, staring at the ceiling. I was a zombie.

We were part of a small community group called ‘connect’. There were four to five families in each group. The idea was so that we could support each other. Honestly, I never thought much of it. In fact, I always hated going to this group. “Such a waste of time,” I always thought to myself.

“How are you coping, my friend?” Simon our group leader asked me.

”Not good Simon,” I said quietly.

”Come, let’s have a chat, I’ll make you tea,” he said. “We have a few minutes before the others arrive.”

I have to say, it was such a joy to be able to pour out my heart to someone else without being judged. Simon was such a great listener. He was so genuine. He didn’t say much, he just nodded, smiled, asked questions, and most importantly he was there for me.

That night after talking to Simon I went to bed with a lot in my mind. I knew I had to do something, I couldn’t just wait to be slaughtered by big telcos. I needed to find the strength to move on. You know how some people say it takes courage to start? Sometimes it takes a lot more courage to stop and let go.

I had been a franchise owner for more than ten years. It was a part of me, it was my identity, and I was about to let it all go. My mind could not get into gear. I could not comprehend the situation because I had never been in that situation before. How, what, why?

”We have to make a move,” I said to my wife in the morning.

”Yeah, I have been thinking about it too,” she replied.

”I’m not sure I’m ready for this,” I said.

”I’m not either,” she whispered. “But I feel like there is no other way.”

”I cannot do it,” I said to her.

”We’ll do it together.”

I felt like a failure, I felt defeated. The business that I was so proud of. The success that I built with sweat and tears for more than a decade. It was not fair. I did not have a fighting chance.

***

“Well, we’ve done it,” I said to my wife. I had a million things happening in my mind.

”Yup, no more Telco Agency” my wife replied. “Are you ok?”

”I’m .. I guess, yeah, I’m ok.”

”Are you excited?”

”In a way, I actually am.”

”It’s been a long 7 months,” she whispered.

”Yes, a very long 7 months,” I said quietly. “I thought we would never sell it.”

”But we did,” my wife smiled again.

”Yeah, we finally did.”

”Don’t think about it too much,” she said. “Let’s just leave it all behind.”

”I know, I just feel like an era is over.”

”Yeah, that is true.”

”Well, we can, however, start something new,” I suddenly felt much better.

“Yes we can,” she smiled again. “You can now do what you have been wanting to do in the last 3 years – life coaching.”

”I know …” I started to feel my smile creeping back.

”Come on, we have talked about it.”

”Yes we have, and now I really can, I really really can!”

“You can,” she said. “Remember what you told me 7 months ago?”

”What?”

”Failure is not the end,” she looked at me with her most beautiful eyes.

***

”Failure is not the real end, it can be the beginning of your success story.”

A Night To Remember

It was 2am, and our newborn daughter decided to wake her parents up. My reflex told me to elbow my lovely wife. Fortunately (or unfortunately) she was asleep, and my conscience said it was a big no. Do not disturb a mother in a deep sleep, or else.

What should I do? Maybe I could try to calm her down. I remember my wife always did this whispering thingy. I might try that. What if it doesn’t work?

Arrghh…the struggle is real.

In the meantime, the little baby got impatient and cranked up her cry. I swear I heard the neighbour’s dog got up and started barking.

“Shuuussshhhh….” I whispered to her. I held her tight and rocked her gently.

It seemed to work.

Half an hour was all I needed. My little girl was fast asleep then. Yes, success, well-done daddy.

“Hunny, was she crying?” my wife suddenly woke up.
“Umm yes, but she’s asleep now, all good,” I said.
“Ok, thank you for that.”
“Go back to sleep, everything is under control.”

It was February 2008 and we only just acquired a business. Coming from the corporate background, we had no idea how to run a small business. The only thing we knew was a job description and how to fake sick leave. We learnt quickly that these two didn’t seem to exist in small business.

Our first child was born just before we acquired the business. It was what we like to call: “Miracles Do Happen, Twice”.

It was a dream.

We were starting a family and somehow came across a great business. It felt good, so we bought it. It was like one of those Nike commercials. We would .. just do it.

We were unstoppable.

Our lack of experience in small business did not deter us from jumping into this new journey of self-employment. We realised later on that the very reason it did not, was because we had no idea what we got ourselves into. We got into business blind-folded.

And guess what, we got into parenthood blind-folded too.

The first time I realised this was when I dragged the cot from the office to the back room, with my daughter in it, crying. The reason, was only because I couldn’t talk on the phone.

And also because it finally got to me. The stress, lack of sleep, burnout, and a million other things we never thought possible.

There were times when we would stay back in the warehouse until dinner, had dinner, and went back to work. The little girl would sleep in the cot like a small angel. This was the time when living in the warehouse seemed like a good idea. I am glad we never did.

We tried to learn fast about everything business. The worst was never-ending-day-to-day administrative duties. Who knew something that seemed so simple and mundane like this could give us a headache? Never underestimate the requirement for small business regarding data entry, filing, stock taking, tracking order, monthly report, and so on, and so on.

Did we bite off more then we could chew?

***

“Hi Fred, I need ten boxes of milk, five tins of coffees, and ten packs of sugar,” my customer put an order.
“Yes, no problem at all,” I said.
“When can we get them?”
“Tomorrow,” I replied.

Another late night I thought to myself.

“O no, I forgot to prepare the bags for bread factory,” I just remembered. There were twenty bags to prepare. I needed few hours to do that.

“Are we ready to go?” my wife asked.
“No, we are not,” I said. “We have to go and get the supplies, and I need to prepare bags for the bread factory.”
“But that will take few hours at least.”
“Yes, I know,” I replied. “Look, why don’t we get the supplies, go home, and then I could come back to the warehouse to finish the twenty bags.”
“But you would be working until morning.”
“We have no choice, I don’t want her to sleep in the warehouse again, she is already on antibiotics.”

Our little angel was not feeling well that night. The doctor prescribed her with mild antibiotics, but she still needed a good rest.

We went home, had light dinner, and off I went back to the warehouse. It was 9pm then. I knew I would not get home until around 2am. O well, we’ve got to do what we’ve got to do. Back in university days, we used to stay up until 4am and was fine for the 8am lecture. This was nothing.

But I guess knowing our child was sick put a little bit of pressure as well. I wanted to be home with her. Gosh, parenthood was stretching me thin. Things worked differently when we had a little baby at home.

It was dark when I got there. I looked around to make sure the street was safe before opening the gate.

It felt weird working alone at night. Sometimes I heard voices from behind the shelves. It must be all of those scary movies coming back to haunt me.

Well, the first few bags didn’t take long to finish. I felt my muscles tensing up a little bit, and suddenly my lower back screamed in agony. I must have pulled a muscle there.

I decided to rest for few minutes and turn off the machine. And somehow that voice came back from behind the shelves.

“Ok, mental note, do not watch scary movies anymore,” I was talking to myself.

I went back to work. My lower back was hurting but nothing I couldn’t handle. It was probably just the old disc-injury playing up. I only had to persevere, and it would be over soon.

The rest of the bags took a lot slower than I hoped for. The back pain worsen. I couldn’t stand straight this time. At least it was almost done now. Just two more bags to go. It was 1.30am. Suddenly, my phone rang (from behind the shelves).

“Hunny, are you still there?” my wife asked.
“Yup, only two more bags to go,” I said. “What’s up?”
“She’s burning up.”
“How bad is it?”
“Very, I think I need to go to the hospital.”
“What, are you sure?”
“Yes.”
“Can you wait for me? I just need to finish the last two.”
“No, I need to go now.”
“Ok, I am so sorry hunny.”
“It’s alright. It’s what we do.”

I couldn’t believe it. Could it be any worse? Excruciating back pain, working alone at night, and now my wife had to drive to the hospital alone.

I continued on to finish the last two bags. My mind was filled with all sort of scenarios. What if something happens? What if the doctor says? What ifs… The worst thing was, of course, there was nothing I could do except to keep working to get it done. And I finally finished all of the bags. It was one very long night.

I closed the gate and rushed to the hospital.

My wife was waiting in the hospital room. She smiled and gave me a hug.

“It’s ok, she’s fine,” she whispered.

***

Time went on, our little girl recovered from her illness, and we were back at work as usual. While still suffering from lack of sleep we were getting better at managing it.

But that night, that was a night to remember.

***

“No one looks back on their life and remembers the nights they got plenty of sleep.”

The Cavalry From Above

“So remember son, stick with your business for as long as possible. Because in business, boom and bust come in waves. This is not something you can control. If you stick around long enough, eventually, you will get your golden era. You just need to be ready when it hits you.”

That was what my dad said to me around 12 years ago. He had been in business for more than 30 years, so I thought it was great advice. Until of course I came to my senses and realised being an entrepreneur is all about being able to control my own destiny. I mean who has time to wait for this ‘golden era’? He was in business for decades, and we still lived in a modest 3 bedrooms house. Surely he would have come across his ‘golden era’ already?

***

Back in 2009, we were importing rags from a Canadian company. It was high-quality rags where the raw materials were collected from local charities around the country. They were not the cheapest, but we had been dealing with them for years, and they were always professional and reliable. Other suppliers tried to get our business, albeit we were never interested. We were one of the most prominent rags dealers in our state back then. We were small, but we were fierce.

There was a guy, Paul, who came few times to purchase our rags. He was an importer too, but he never said much about it to us. Mind due, his primary business was not in import. He told us about his plan though, going to Pakistan and India to search for new suppliers.

The Canadian company that we dealt with only worked in US dollars. Which meant being an Australian company we had to be careful with the currency exchange. Few percents off could mean few thousand dollars loss. I even established a foreign exchange account with a local financial institution to improve my overall exchange rate.

The strategy was to purchase US dollar when AUD dollar was stronger and put it into the forex account. At one time we accumulated more US dollar in the forex account than our own business account.

You can see how risky this currency exchange stuff was.

We managed the business pretty well. It started from one container every three months, then every two months, and in 2009 it was one container per month. We had a few of them on order at any one time. All because it took approximately two months from the time we put the order in until we received them in Perth.

I said to my wife that we were selling rags like peanuts. They just flew off the door. Looking at the way we were growing, we would reach our first ever $1 million sales that year, all from rags alone.

But of course, fantastic results did not come without its own risk.

You see, I never thought it would come to that. I prepared everything, trying to control every little area of my business. I had enough US dollar in our forex account to purchase two containers. Never did I know that AUD dollar would decide to plunge itself against US dollar and stayed at the bottom, for a long time.

But it happened. AUD dollar fell from a high 97c to a US dollar to a mere 61c in only a few short weeks.

We used up all of our US dollars to purchase two containers. And then things got worse because AUD dollar dropped even further to 50c. We did not have any choice but to pay the next order based on the weak AUD dollar. We tried to increase our price, but at that rate, unless we raised the price by 80-100%, we were still at a loss. An increase that much would only give our competitors an incredible window of opportunity to steal our customers.

The market would react, and the price would correct itself but not until another few months at least. We didn’t have the luxury of time. Our modest price increase was nothing compared to the profit we lost to the weak AUD dollar. We were running out of cash, very very quickly.

We lost at least twenty thousand dollars per container at that time. And we had a few of them on order. At the end of the day, we decided to cancel everything unless they were already on the sea. As a result, unless we started to purchase from our competitor, within one month, we would have nothing to sell. Our $1 million sales target were reduced to $0 within five months of AUD collapse.

***

I was sitting in my office trying to get my head around this dire situation. I could not believe only five months ago we were doing so well. Now we just had a little bit of stock left, maybe enough for few weeks.

I tried to think my way out of this, but my brain just couldn’t get into gear. I called everyone I knew to get advice from. Unfortunately, AUD dollar did not collapse against US dollar very often. In fact, it was one of the rare moments that it happened, and even more unusual because it stayed at the bottom for an extended period of time. It almost like AUD dollar found its happy place at the bottom.

One of the guys that I called said he never saw this happened before and this guy was a furniture importer for ten years before he became a pastor. I felt somewhat unlucky after that conversation.

My closest friend reckoned I should update my resume because the end was near. We didn’t talk much to one another after that.

And then I realised. This was beyond me.

This was out of my control.

OMG, my dad was right. Boom and bust came in waves. I was never in control. All these time I was just lucky.

The time finally came for me to face the worst in my journey as a businessman.

***

“Fred,” Paul suddenly appeared through my office door.
“Hi Paul,” I waved to him.
“How’re things mate?”
“Good,” I said, trying to hide my apparent stress.
“Remember I told you about sourcing rags from Pakistan?”
“Yes.”
“I did. I went there and had dinner with rags suppliers.”
“Wow, that was great.”
“Yes, one of them decided to make me their sole distributor for Perth.”
“Sounds like a great deal.”
“Which is why I am here now,” Paul sounded a bit nervous. “Well, are you interested in getting rags from me?”
“What sort of price are we talking about Paul?”
“Look, I know I am new with all these, but the quality is very high you wouldn’t believe it,” Paul replied.
“Yes, but at what price?” I was getting impatient.

And I swear to you if I could record the next five minutes conversation I would play it every day until such time that it was time for me to meet my creator.

“Fred, the price is excellent,” Paul smiled.

And it was. The price that Paul said was 20% less than the cost of rags we paid to the Canadian company when AUD dollar was strong. I couldn’t believe my luck. Paul appeared just at the right time with the right product, and the right price (better even).

There must be something or someone up there helping me out.

I was screaming in my head: “Look, if there is an intelligent higher being up there, thank you, thank you, thank you. Although next time, please don’t wait until the very last moment before sending the cavalry. A slightly faster help would be great.”

Our business was saved from disaster. Paul had been an excellent supplier. He was always ready to help. His company grew multiple times afterwards. I guess AUD dollar collapse meant he could sweep struggling rags dealers like me within a short few months. Now that I think about it again, it was a brilliant move by him. Well, I couldn’t complain. He did save my company.

And for us, we are back on track.

I am done trying to control everything. I know I have to be ready for incoming boom and bust. But deep inside my heart, I know someone is looking after me.

Somehow, I thought about you, dad.

 

 

I Was Blind, But Now I See

You know that feeling when you could not do the simplest thing in the world like putting the correct address? Well, guess what, we had three returns this week, all due to the same mistake: wrong address. The worst thing was, of course, it was all my fault.

I didn’t normally do this. It was not in my nature to make mistakes.

They used to call me ‘the machine’ back in Dog Swamp Distribution. I was so good even my supervisor started to doubt himself.

There was something wrong somewhere. I knew I needed to fix it. We could not afford customers missing their goods all the time because of my stupid mistakes.

“Hello?” I answered the phone.
“Hi, is this Fred’s Industrial Supplies?” the voice from the other end said.
“Yes, hi John,” I replied, recognising the voice straight away.
“Fred, how have you been?” he said.

John didn’t normally say “how have you been”, so something was wrong (again), must be my lucky day.

“Look, we have just decided,” John said.
“Decided .. yes?” I said nervously.
“O look, I feel bad, honestly, but we have decided to use another supplier,” John finally said. “I felt like I had to tell you directly.”

My senses were frozen. I wanted to say something but all I could gather in my head was silence. It was cold, dark, and just silent. I felt nauseous. I felt sick.

John was my biggest customer. His company contributed about 30% of our revenue. His departure was a major shock to me. Well, to be honest, it was not like he didn’t give us any warning. He had been telling us how we should review our pricing. I didn’t think it was that serious. I guess I was wrong. But I couldn’t be wrong, I knew what our competitors were selling at and we matched them, we matched everything.

“John, are you serious?” I said. “Can we talk about it?”
“We have talked about it, Fred,” John said. “You just didn’t listen.”

I was disappointed and angry. That was the moment when I decided that I couldn’t rely on my existing customers. I had to do something. These ungrateful people just kept disappointing me. I gave them the best services ever, the best prices, and the best of everything. And still, they went behind my back and left for useless competitors.

I kept myself composed and said my final words to John.

“Alright John, I get it. Well, let me know if you change your mind then.”

I made a commitment to myself that I would work harder than ever to get better customers. I would not let this incident destroy me. It was time for me to shine. At least that was what I had in mind.

I spent the following months trying everything I could think of to promote our products. I did land new customers. Some of them were pretty good customers too. I knew I could do it. There was nothing stopping me now.

But still, none of them was as good as John. These customers were ‘smallish’. They were like insects, while John was like a whale.

I tried harder. I went around door knocking. I called up potential customers for meetings. I mailed hundreds of sales materials. I faxed promos to everyone I knew would be interested. I did everything I could think of. I landed few more customers, but they were all ‘smallish’. All of them combined were still nothing compared to John’s purchases.

And in the meantime since John’s departure, we sank deeper into financial trouble. Losing 30% of revenue was not an easy matter. I cut cost everywhere I could think of. We even started to turn off the air conditioning during the day to save electricity. We let go everyone except Sam our loyal delivery driver. He agreed to take a pay cut to help us a little bit.

We were desperate. We were on the brink of bankruptcy.

There were times when I didn’t want to go to sleep because I knew I would wake up in the morning to face my nightmare all over again.

I would drive to work contemplating whether I should keep driving or going back home.

“Fred, this is Sam,” Sam my driver called me.
“Yes, Sam?” I said.
“I’m so sorry, I know you don’t want to hear this,” he said.
“What is it?” I said. My heart started to beat faster.
“I have been in an accident,” Sam replied. “I am ok but the van was damaged, badly.”

I felt the cold again, this time I could feel it creeping into my bones. I felt like a dark cloud was hovering around me. I could not say anything. I was just staring at the traffic.

“Fred, I am so sorry,” Sam said. “I will help to pay for the damages. I know things haven’t been easy for you.”

I didn’t say anything. Sam hung up the phone. It wasn’t his fault but he felt guilty nevertheless. He did end up paying for the insurance excess though. He resigned immediately afterwards.

We were out of whack for few weeks while the van was fixed. I ended up using our family car for delivery. We were lucky because we had a big family car. So we managed to fit quite a good volume of items into it.

My wife joined forces to mind the phone while I went around doing deliveries. She was very good with the phone. It was in her nature to build conversations. I had to say, I never knew she was that good.

Due to my activities with delivery, I got to meet with a lot of our existing customers. I didn’t use to talk to them because I was too busy trying to get new customers. This gave me refreshed perspectives.

My customers never said it but I could see they appreciated my efforts to stay afloat. Some of them even offered me cold drinks on hot days. I began to build great relationships with them. I never knew they were such a good bunch of people. I always thought of them as ‘smallish’ customers that I couldn’t care less. Boy, I was wrong. I was so wrong.

I guess there were a lot of things I didn’t know about them.

I began to really care for them, walking the extra miles when they needed help. There were times when I would do express delivery within the hour if I knew they needed the goods urgently. Some other time I would drop my prices heavily because I knew they also had difficulties with their own businesses. I thought it was important if we could weather the storm together.

My customers started to support me more. They gave me more business and they referred me to their friends. I could not thank them enough for their generosity.

John never came back to us, but we survived.

I looked at myself differently now. I thought I was so good that I could never make mistakes. Well, I did, a lot of them. I just didn’t realise it. I thought I was above my customers. In reality, I was beneath them. They were the ones who supported me during tough times.

They were the ones who gave me a second chance.

When that phone rang a few months ago, I was devastated. I couldn’t believe how unlucky I was. I was wrong. It turned out to be the luckiest day of my life. It was the day my life was about to change. What I thought was the lowest point in my life turned out to be the highest point.

I went through hell to see heaven.

But it was worth it.

I was blind, but now I see.

 

 

 

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.

 

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.