How Can Founders Prepare for Crisis?
Startups are fun adventures – that is, until the pressures of a cash flow crisis, or a manufacturing quality problem, or a major customer satisfaction problem hits. Even with all my years mentoring startups, I can’t predict how founders will react to pressure situations. I wish I could since these circumstances often make or break a startup’s future.
Nevertheless, I have found some key actions you can take to prepare for crises, mitigate the pain, and put you back in control. Here they are in no particular order:
- Evaluate competitive threats as new opportunities. New competitors can steal your existing market – or they can open up new markets. Entrepreneurs who react with fear and anger are in significant jeopardy of losing out since competition is ubiquitous in the startup world. Use competition positively – to fine-tune your solution and expand your opportunities.
- Use exogenous pressures to drive innovation. There is a natural human tendency to fight change, and the pressure to change causes pain. True entrepreneurs love change – that’s why they are starting a new venture. They use external pressures, like shrinking margins, as motivation for rethinking and refining their business models.
- Incorporate fun and humor to recharge. If your team is feeling overwhelmed by the pressures of customer demands, it may be time for a fun off-site event to get them recharged and sufficiently motivated. Fun and humor will also offset the tension in dealing with tough customer issues, resulting in higher satisfaction, loyalty, and referrals.
- Take control of the situation by dividing tasks into chunks. When the challenge ahead looms large, it’s easy to let anxiety get the best of you and let procrastination take over. Every big task can be broken into milestones, allowing you to enjoy manageable tasks and small successes. That’s why I suggest developing a business plan with a timeline and deliverables before you start.
- Work from your strengths – don’t worry about weaknesses. Most entrepreneurs start with passion and confidence, but many succumb to their weaknesses when pressures set in. Lead with your strengths and in-depth skills, and don’t be afraid to ask for help from advisors or partners to fill the gaps. Confidence alone will overcome many challenges.
- Turn every failure into a positive learning opportunity. When pressures mount and things go wrong, don’t start looking for excuses or some one else to blame. Make every failure a lesson learned, and nurture that mindset within your team. Thomas Edison counted many learning opportunities, bouncing back after 1,000 failures on the light bulb alone.
- Prepare for challenges rather than hope for the best. The best entrepreneurs always have a Plan A, with backup plans, and continually research their industry and competitors. Others strike out blindly, assume it will be an easy win, and soon run into problems without any idea what to do. Be over-prepared and enlist advisors who know the ropes.
- Stay physically fit and balance work with play. Pressure situations will happen in every business, so stay at your best both physically and mentally to respond. Don’t let the “normal” workload wear you down – keep a balanced focus on work, and find other activities, including sleep and entertainment, to keep up your motivation and stamina.
Based on my own experience as an executive and advisor to small business owners, I’m convinced that anyone can learn from these techniques to handle the pressures of a new venture or existing business, no matter what their background. It won’t happen by default, and it does take effort and initiative on your part.
You, too, can then thrive from the challenges and pressures of your business rather than letting them break you. Most entrepreneurs I know can’t stand the boredom of “business as usual,” as that threatens their sense of contribution and self-worth. Be one of the best, whose motto proudly is: “when the going gets tough, the tough get going.”