Given almost no one had Entrepreneurism 101 or Running a Small Business in high school or college, it is completely natural for business owners to get in over their heads from time to time.
Here’s how you can help.
Where ignorance and optimism meet, arrogance follows.
The great part of entrepreneurs is that they are quite optimistic, naturally driven and open to learning by doing. The downside of entrepreneurs is arrogance (meaning that they overestimate their ability to handle things well, or they can’t collaborate/learn essential things until it’s too late).
Entrepreneurs are different than you and I.
Most entrepreneurs are idea people and in some cases, idea-chasing people. Ideas breed opportunities and opportunities breed ideas. A dizzying loop if you’re not an entrepreneur yourself. Logic, linear planning, management and follow through are not generally the gifts of the entrepreneur. The wise ones outsource these functions or have been lucky enough to attract folks who can handle the entrepreneur’s ways.
Entrepreneurs are prone to get in over their heads financially.
This again, because they are naturally optimistic if not dreamers. That is their function in life. Entrepreneurs are key to what drives innovation in many countries and are the backbone of business creativity in the U.S. Remember, entrepreneurs have a different relationship with risk than you or I. To them, it’s a greater failure to have not tried their best, even if the project/business didn’t make a lot of financial sense to the accountants of the world. Entrepreneurs see so much that could and should work out. And, on the downside, entrepreneurs are often ahead of the marketplace or get more excited about the idea/product/service/opportunity than they do about testing it out to make sure enough people will actually buy it, and buy it quickly and often enough to keep them in business.
How to coach the entrepreneur when they get in over their head.
There are two types of “in over their head.”
The first type is when they are bouncing around from idea to idea or business project to business project. What they most need is to experience some modicum of success. Without enough people buying their product/service, the entrepreneur loses faith in themselves and to compensate, comes up with another ‘great idea.’ And the cycle can continue until the deep hurt kicks in.
The second type is the entrepreneur who’s in trouble but can’t admit or or can’t admit all of it. And believe me, by the time the entrepreneur even hints to you that they are in trouble, they are likely days away from a financial crisis.
What I’ve found that can work in these situation are a combination of…
1. Get their attention.
It’s not easy to get the attention of an entrepreneur who is in panic mode. They tend to dominate their surroundings as a defense mechanism. Rather than clamor for their attention, ask “Bob, how can I get your attention?” It works.
2. Help them switch their focus.
From idea/revenue/project/opportunity to the actual customers. Not an easy shift at first, but once made, the entrepreneur often thrives on this new focus. They apply their creativity to fixing customer and product/service problems. It also keeps them out of idea mischief for a while.
3. Be very, very positive and encouraging.
Entrepreneurs are like kids; even when they mess up, they need love and encouragement. You can be highly positive and encouraging and still ‘force’ the entrepreneur to face the facts and get to work to solve their problems. But whatever you do, don’t b.s. them. They are acutely aware of b.s. given they are often on the broadcasting side of that.
4. Ask them to sort out the problem and come up with a solution.
I’m all for being direct with clients, but entrepreneurs seem to do better when you ask them to come up with their own solutions. I’ve also found it works really well to challenge the entrepreneur to solve the problem and then some within 30 days. They LOVE a challenge. Give them one.
5. Help the entrepreneur to honestly and accurately define the problem.
Entrepreneurs have tons of ‘reasons’ (aka excuses) for why things aren’t going the way they should be going. I’ve found it helpful to push/put heads your together and figure out the real source of the current problem/stress/mess. It’s usually one of these 5 things.
1. The entrepreneur is too idea/opportunity-based and isn’t customer focused enough.
2. The entrepreneur’s overhead or variable costs structure is too high.
3. The entrepreneur is impatient/overly optimistic about sales/revenue.
4. The entrepreneur’s lifestyle is too expensive, causing performance pressure.
5. The entrepreneur isn’t going deep enough with one business or product and instead is scratching the surface of several opportunities, doing none of them justice. The real revenue and high profits occur when you do deep, not shallow.
6. The entrepreneur doesn’t know how to market or sell well enough, or he/she hasn’t outsourced this function.
7. The entrepreneur is trying to sell the wrong product/service. It’s truly hopeless and the plug should be pulled.
I hope this was helpful.
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