Inexperienced business owners seldom consider failure. For one, it’s not productive to contemplate negative possibilities all the time. You’ll never get anywhere in life (or business) if you’re constantly thinking about the worst-case scenario. Still, it’s unwise to begin any venture without first weighing all your options and considering your financial risks. To that exact point, today we’ll be looking at how new entrepreneurs can handle difficult situations in both their personal and professional life:
When “Plan B” Doesn’t Work . . .
Savvy professionals always have a backup plan for when things start to go awry. But what happens when your “plan B” doesn’t work out either? When switching strategies or changing tactics, it’s often best to adopt a less-is-more approach. Think about simple ways your company can evolve for the better and ignore the impulse to launch a full-scale rebrand if you find yourself in a jam.
After the Bank Says No . . .
When business owners first fall short of cash, most will try to acquire a small business loan from a bank. The truth is though, it can be exceedingly difficult to get a bank-funded business loan if your credit history is anything less than stellar. In these instances, you may want to consider reaching out to a private lender for a small business loan if the bank rejects your application. Resist the temptation to mix personal and professional bank accounts –– even for a “quick injection” of cash.
If Your Partner Bails . . .
Going into business with a friend is always a dangerous play. And if worst comes to worst and a crucial partner leaves your operation, you could start feeling the financial strain before you know it. Should you find yourself unable to secure a business loan, you can then think about contacting an equity investor to help shoulder the financial burden. Note of course that equity investors will typically demand a say in company decisions –– so don’t go down this path unless you’re willing to relinquish some power.
When Disaster Strikes . . .
There are certain scenarios business owners simply can’t deal with on their own. That’s why finding the right insurance provider is essential to your financial viability. Make sure also to square away your own personal insurance in addition to coverage related to your business. There are a number of subtle factors that affect insurance programs, and your rates could change based on your age, lifestyle, income, gender, physical location, and even your profession. (For instance, disability insurance for physicians will vary from disability insurance for teachers, which will also differ from disability insurance for firefighters, and so on.) At the end of the day, always talk out any major financial decisions with trusted family members, friends, and/or colleagues. Asking for a little perspective from a trusted associate can help you avoid calamity if you’re careful.
Going into business with a friend might turn out to be a terrible idea when financial issues arise!
I think one of the most important things when starting your own business, is never to give up. And not to take misfortune personal.