Unfortunately, I see this all too often in coaching and consulting clients. Either they’re hoping to start a new business or they’re in crisis. The former is way easier to fix than the later. But either way, the fear has them in a head lock and they can no longer think rationally. In fact, they can no longer see the situation clearly, which is why I call it the ‘fog of fear’.
Fear is an ugly thing. It makes us do things we would never do in a more rational time. It causes us to make poor decisions, or more often, fail to make important decisions about our business. Failing to act in the business world doesn’t mean that nothing happens. It just means that you have failed to take an active part in managing your business. You’ve chosen instead, to let your business run itself. What I call Management by Abdication, is the worst kind of management. Serious operational and financial problems don’t just go away…they usually get worse when left to fend for themselves.
Why does this happen? Why do normally logical and engaged managers and owners get lost in the fog?
For new entrepreneurs or those still ‘hoping’ to get started, it may be an inability to pull the trigger. They don’t have enough information or don’t understand how to tilt the odds in their favor by using standard financial and analytical tools. Three simple tools; the income statement, cash flow report and break-even analysis, what I call the Three Tools of Financial ViabilityTM, can help hopeful entrepreneurs evaluate their business model for viability. In other words, will real people pay real money in sufficient quantity to allow you to meet your goals? Without some way to determine if your business model has a good likelihood of being successful, many people just can’t seem to pull the trigger. And frankly, without any kind of success likelihood, why would you ever take the risk?
But the fog I’m really talking about is the fog that grips existing entrepreneurs when their business is in crisis. Owners or managers frequently get consumed by the fear of the unknown consequences. Maybe they haven’t run across this particular problem before and aren’t sure how to proceed. Eventually, as the problem grows in magnitude, the fear turns into a fog that can’t be navigated. Owners just sit, paralyzed into inaction with fear. This is when they lose their business. Taking no action, or inappropriate action, the business suffers further and a downward spiral sucks them into the abyss of failure.
If you find yourself in this situation, get some outside help. Use your advisors or mentor to help you see the most appropriate response to the situation. If you need to hire a financial professional, do it. The alternative may be loss of your business. Usually these problems are nearly as bad as you’ve made them out to be. A little professional advice or strategy will probably help you get back on track to profitability.
Fear is an ugly thing. It makes us do things we would never do in a more rational time. It causes us to make poor decisions, or more often, fail to make important decisions about our business. Failing to act in the business world doesn’t mean that nothing happens. It just means that you have failed to take an active part in managing your business. You’ve chosen instead, to let your business run itself. What I call Management by Abdication, is the worst kind of management. Serious operational and financial problems don’t just go away…they usually get worse when left to fend for themselves.
Why does this happen? Why do normally logical and engaged managers and owners get lost in the fog?
For new entrepreneurs or those still ‘hoping’ to get started, it may be an inability to pull the trigger. They don’t have enough information or don’t understand how to tilt the odds in their favor by using standard financial and analytical tools. Three simple tools; the income statement, cash flow report and break-even analysis, what I call the Three Tools of Financial ViabilityTM, can help hopeful entrepreneurs evaluate their business model for viability. In other words, will real people pay real money in sufficient quantity to allow you to meet your goals? Without some way to determine if your business model has a good likelihood of being successful, many people just can’t seem to pull the trigger. And frankly, without any kind of success likelihood, why would you ever take the risk?
But the fog I’m really talking about is the fog that grips existing entrepreneurs when their business is in crisis. Owners or managers frequently get consumed by the fear of the unknown consequences. Maybe they haven’t run across this particular problem before and aren’t sure how to proceed. Eventually, as the problem grows in magnitude, the fear turns into a fog that can’t be navigated. Owners just sit, paralyzed into inaction with fear. This is when they lose their business. Taking no action, or inappropriate action, the business suffers further and a downward spiral sucks them into the abyss of failure.
If you find yourself in this situation, get some outside help. Use your advisors or mentor to help you see the most appropriate response to the situation. If you need to hire a financial professional, do it. The alternative may be loss of your business. Usually these problems are nearly as bad as you’ve made them out to be. A little professional advice or strategy will probably help you get back on track to profitability.
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