Entrepreneurship Leadership Uncategorized

Meeting Tomorrow’s Challenges Today

Business is the art of overcoming obstacles. Too many entrepreneurs go into business with the notion that big challenges are possible, but avoidable. That’s a dangerous mindset. A better approach is to know from the start that business is all about solving the problems that will definitely come your way. Successful entrepreneurs don’t avoid. They prepare.

This is true no matter what you sell.  Problem-solving is the industry we’re all in. Seeing challenges as burdens sets you up to be overwhelmed by them. Rather, cultivate a mindset that sees the joy in overcoming obstacles. It’s the mindset that doesn’t get discouraged by hurdles, because they’re part of the independent lifestyle. It’s the mindset that never assumes things will go smoothly—and doesn’t need them to.

The 3 Types of Challenges

Look back over the course of any business and you’ll see a trail of challenges. For us here at Business Republic, challenges big and small rose up at every turn, and still do. If that sounds like pessimism, it’s not. It’s realism, and it’s not a complaint. Problem-solving is the entrepreneur’s burden. It’s the price we pay to make our living on our own terms—and it’s well worth it.

In my experience, most challenges fall into one of 3 categories. While you can never predict the specifics of a given challenge, there are some general commonalities. By preparing for the typical kinds of kinks you’re likely to face, you can set yourself up to do so efficiently.

  1. Financial Challenges

This kind of challenge is the simplest to address, but it causes the most stress! Financial difficulties happen. The market is unpredictable. Circumstances change. While money trouble is a scary thing, it’s par for the course—and you can handle it.

The best way to prepare for financial issues is to save. Yes, it’s that simple. Again, it’s a matter of mindset. You have to see revenue not just as money to enjoy or reinvest, but as part of your defense system for the future. Establish a “rainy day” fund, and manage it with the same care you manage your other expenses. Don’t spend enough to hold back growth, but spend enough to be effective.

I suggest putting between 5-10% of all monthly revenue into the rainy day fund. At the beginning, you can stick with the minimum, while you’re running lean. As revenue grows, consider arming yourself against the unexpected by bumping that percentage up towards 10. The more you contribute, the less you’ll sweat when suppliers suddenly raise their prices or equipment breaks down.

After a while, you’ll have a pretty comfortable safety net. Establish a minimum necessary monthly revenue; if you don’t reach it in a given month, use the fund to make up the difference. Every 6 months, reevaluate the state of your fund. If you’re more than prepared for an emergency, consider freeing some of it up for reinvestment.

Maintaining the fund requires discipline. But hey, so does business.

  1. Growth Challenges

Growth challenges can be subdivided into two opposite problems: not enough growth, and too much.

In the first case, if revenue isn’t climbing, sales aren’t increasing, etc., consider that a potential use for the “rainy day fund.” Spend some money on marketing efforts like Facebook ads, which are pricey but effective. Have a stable of product innovation ideas that can be implemented when it’s time to give the business a boost. When hiring, look for diverse skill sets so that you can redefine employees’ roles when it’s needed.

All that said, prepare for excessive growth as well. There is such a thing as too much success if you’re not ready for it. The key to preparation here is in hiring practices. When staffing, don’t just hire your favorite applicants and forget about the rest. Use what I call the “medal” system: Hire the best, or “gold medal” applicants for each position. Then, maintain contact with the “silver” and “bronze” applicants, even when you’re not hiring. Simply drop a friendly email now and again. Make a point of saying hello at industry events. That way, you’re ready to beef up your team when the pace picks up.

Also, consider an incentive program for current employees. Our business offers a bonus to any team member who brings in a successful new hire. Because of this, we know that when we need more hands on deck, we’ll have plenty of good ones.

  1. Team Challenges

Problems with employees can be the most awkward. Employee misbehavior, disagreements with partners, personal friction—team challenges can snowball into crises if you’re unprepared. The best way to be ready is through one magic word: procedure.

At the very beginning, establish fair procedures for dealing with conflicts. Utilize them consistently and equally. Make sure all team members are aware of them. Make sure they’ve agreed to them before problems arise, so issues can be dealt with professionally and impersonally.

For example, when partners disagree, they shouldn’t feel free to simply have it out. Establish a procedure in which disagreements are addressed at an appointed place and time. Make that place and time separate from the normal schedule. This allows everyone to carry on with their work, cool down, and find a solution in a setting that’s removed from the feelings involved. Establish a time limit for coming to an agreement. Have a third party officiate if necessary.

For employee misconduct, have specific consequences (up to and including dismissal) in place. Again, they’re to be applied dispassionately, without malice or resentment. People make mistakes, and occasionally poor choices. Be ready to deal with them equitably. Also have a procedure for employees who feel aggrieved, including a chain of command up which they can report issues. This way, you don’t have to be distracted by seeing personally to every disagreement.

Keep shared documents outlining procedures available to everyone on the team. With the procedures laid out, everyone will know exactly what to expect.

Redefining Optimism

Optimism shouldn’t mean fooling yourself into thinking that you won’t be facing challenges. It should mean knowing that you can handle them. Challenges are what happen when things don’t go the way you planned—otherwise known as life in general. They’re not crises unless you let them be.

Challenges are necessary and vital to your growth as a business person. Without them, you don’t develop the skills and dispositions that real success requires. No one gets better at any game by winning all the time. For every great success in business, there’s usually a dozen bloopers that preceded it. To never be challenged is to never mature as an entrepreneur.

Of course, there is one way to avoid the challenges that entrepreneurs face. It’s called a regular job. Independent business people choose to sacrifice the relative predictability of conventional work in favor of more independence. That independence is sweet, but it requires preparation.

So get ready.