You say we’re on the brink of destruction and you’re right. But it’s only on the brink that people find the will to change. Only at the precipice do we evolve.
Professor Jacob Barnhardt, The Day the Earth Stood Still
If you’ve ever started a business, I can almost guarantee that you have been faced with a catastrophic event. From an unexpected chargeback to inability to make payroll or a surprise exit by a client. If you haven’t experienced something like this, you haven’t been running a business long enough — and it’s just a matter of when, not if, it will happen. One of the biggest responsibilities of a founder is to be ready for all possible outcomes. Yes, surprises will happen (both good and bad) but the better prepared you are, the more likely these script changes (yes, good or bad) won’t derail the business.
Most disasters are painfully obvious and can be seen from miles away. Engaged in a long conversation about a golden business opportunity that never seems to get over the goal line? Sometimes you just have to acknowledge the deal will not happen. In one business venture I was involved in several years ago, one of our salesman was always talking about this monster deal on the horizon. One day, when I flat out asked what was happening, he came clean and said “yeah, it’s not going to happen.” This honesty was crucial to being able to move on and redeploy efforts elsewhere — but not after spending months chasing a dream. Bank account dwindling? If you know your burn rate, and you should, elementary school math will suffice to know when doomsday is.
It’s true — we often do our best work when it really matters. Being a successful entrepreneur means standing firm in the face of adversity and delivering in the moments when it really counts. Sometimes, we have to intentionally wait until the exact moment to pull the trigger on something that can right the ship. The best entrepreneurs always remind their team that it gets worse before it gets better. The real mistake is ignoring the obvious challenges and pretending they don’t exist — and not knowing how much time you’ll have to implement your mega-move to turn things around.
Have the foresight and humility to accept the challenges on the horizon and start planning to deal with them sooner rather than later. Problems don’t fix themselves. The solution may not manifest until the final hours, but if you are cognizant you will need a solution well in advance, the solution will be more refined, polished and less catastrophic.
If you know you will have to let go of significant numbers of your staff 6 months from now, waiting until 6 days before that fateful day will only produce a less desirable outcome. If you start planning ahead today, you can extend that timeline and end up in a better spot. For instance, maybe evaluating staff and seeing if a couple would voluntary leave their positions in exchange for a decent severance or accelerating their stock options. Reassigning work focus to help support more productive projects could also be considered. Maybe going back to the well for more funds now instead of at the brink (which will be far more dilutive, if even possible). Revisit some old customer opportunities that you once thought were outside of your wheelhouse, but may now produce some opportunistic cash.
Another exercise is to do a pre-mortem on your new business idea before you even start. In addition to dreaming of all of the successes, start making a list of things that can go wrong. It can be a somber exercise, but it will position your mind in a level-set manner. The trick is not being fearful of these things — having the knowledge that they are inside the realm of possibility only increases the likelihood of preventing them.
When these on-the-brink moments happen, you want to be able to react progressively and be on the offense — not crater into siege mode. Spend some time envisioning where your business will be in 3 months, 6 months, 1 year and beyond if things do not change. What does that look like? Will clients renew? Will there be enough cash? Will a new deal get signed? What if it doesn’t? Answer these and you will still have the opportunity to shine and be remembered when all of the chips are on the table. And you will have a better grasp on navigating the challenges and coming out ahead.
Entrepreneurs must always push themselves and their company to the edge — the evolution and the step up (or down) at that moment are part of the growing a business.
Terence Channon is the Managing Director at SaltMines Group, a Start-Up Studio that helps early stage business ideas take shape and come to life through technology, product development, leadership support and capital. We’d love to hear about your idea. Get in touch by downloading and competing our Early Stage Canvas.
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