THE 4 BIGGEST PROBLEMS FOR ENTREPRENEURS – AND HOW TO OVERCOME THEM
Richard Conway shares what he believes are the four biggest headaches for business owners, and the best way to deal with them.
We all know that starting a business – and keeping a business running – is tough. If it wasn’t, everyone would do it. Instead, we’re left with the passionate, diligent ones who are prepared to weather the storms and keep on fighting forward. From challenges concerning cashflow, to the personal and sensitive issues surrounding people, business can be fraught with risk (and a few headaches!) on the way to reward.
Being an entrepreneur and a business owner doubtless means making hard decisions, and those who succeed most definitely master (or at least improve on) learning from their mistakes.
This month, I take a look at what I consider to be the four biggest challenges facing entrepreneurs, and how I have overcome these. 1. CONCERNING CASHFLOW Money doesn’t make you happy, but it certainly makes the world go round – and never is this truer than in the world of business. Big or small, I’m yet to come across a business that doesn’t concern itself with cashflow. It’s a juggling act. Regardless of whether you get paid, you have to pay staff and expenses – including things like your office lease – upfront.
You may know your business’s revenue, and its forecasted turnover or profit, but your true cashflow day-to-day within your business really comes down to timing.
In most businesses, at least in professional services, you do the work and the customer receives the deliverable, and then you invoice them for it. Consider turning this model on its head and billing in advance of the work taking place or, if it’s a large project, structure progress payments throughout the lifecycle of the project, so you’re minimising how much resource you are outlaying before you see any money.
If your revenue is recurring, encourage your customers or clients to set up direct debits or automatic payments. Not only is this easier for them, it ensures you get paid on time every time, without having to rely on a person doing the transaction when they should. 2. PROBLEMS WITH PEOPLE Your company culture, and the subsequent personalities and attitudes of your people, permeate every aspect of your business.
You’ll know this when you’ve had an interaction with a business or brand and found the person difficult or disengaged; it degrades your whole experience. Now imagine what those ‘poisonous’ people are doing internally. I think of those ‘bad apples’ like ripples in a pool; they may start as one central spot, but their effect spreads out in ever-widening circles of disturbance.
One of the key learnings I have uncovered in business is the vital importance of dealing with people problems quickly, which is not always easy for people who don’t like confrontation.
I’m one of those people so, for me, it is important to take as many preventative measures as I can – and this comes down to getting the culture right. We do this in a number of ways – through team building activities and shared lunches; with our annual strategy day, during which everyone is involved and heard, and where we identify real, actionable outputs and follow through on them; through anonymous polls of staff that focus on continual improvements the business can make; by incentivising the types of behaviours we want to see more of; and, importantly, by empowering and trusting our people to deliver.
Good people, who are in the right kind of environment, will have ideas and create positive stuff within your business without you even knowing – so create a culture that encourages this. 3. MAKING (AND LEARNING FROM) MISTAKES I know we’re straying into cliché territory here, but bear with me. It’s totally normal to make mistakes, and that in itself is not the problem. A problem arises when we don’t learn from them. To be successful in business, you need to be able to pivot (who else is picturing that iconic Friends episode here?). Seriously though, the ability to change tack is critical, and these pivots often come from initially making mistakes.
Embrace mistakes and find a way to deal with them; it all comes down to how quickly you react. If it’s someone in your team that makes a mistake, the first thing I focus on is not throwing blame. It’s a natural and instinctual reaction to do so, but one that needs to be overcome.
Take a breath and transparently work towards a solution. Those who feel blamed are likely to become on edge and make more mistakes from feeling under pressure, which isn’t good for anybody.
Take action in a solution-focused way to start with, and then circle back to the lesson with the people involved.
It’s not always easy to find the lesson when things have gone wrong, and you may struggle to see what you could have done differently. Here I find that removing yourself helps. You need time away from the office and space to think; I find that’s what brings perspective and even in my relaxation time, my mind tends to be working.
I try to book at least a couple of international conferences a year; beyond being tax deductible holidays, they provide an opportunity to think about my business. It’s there that I have the most profound insights.
Throw things around at management and board meetings too; other smart people around you are vital, and this is what I think is the real value of professional organisations, like the Entrepreneurs Organisation (EO). 4. TACKLING TOUGH DECISIONS If you’ve started a business, chances are the buck stops with you and that’s bound to mean that you, and sometimes you alone, have to deal with some tricky decisions.
This is something that I used to put off, but I’ve learnt from experience that often the ramifications of leaving something are bigger than if I had dealt with it more quickly.
You do get better at this aspect of business over time; it’s part of developing true leadership skills.
Be open and receptive to those around you, as often they can tell if something isn’t working, or clue you into where you might have to make a hard call. A good, trusted team around you enables you to have extra eyes on things. It also helps to commit you to a course of action, once you have decided; vocalising your choice and the resulting path to others provides the impetus to follow through.
Overall though, trust your gut – it very rarely leads you wrong.