When I started the Strauss Law Firm, I had no idea whether or not it would be successful. I knew that I was passionate about bringing together the worlds of law and entrepreneurship, and I used that as motivation to take my business to the next level. As I listened to my clients’ needs, my company grew, which eventually led to the creation of Hamilton Captive Management.
I count myself fortunate since starting and sustaining a business is one of the most difficult paths you can pursue. Every business leader will face numerous obstacles and roadblocks on their entrepreneurial journey. Distinguishing those that can be overcome from those that require surrender is both difficult and painful. If the following obstacles sound familiar, here is some advice.
You haven’t met annual income goals for 2 to 3 years. If you see the light at the end of the tunnel and truly believe the business will become profitable, keep on. However, missing defined targets can be a major red flag. Instead of increasing your bank financing or putting your personal finances on the line, engage a dispassionate third-party expert to help you evaluate the risks ahead and the options available. Then make a concrete plan to pursue the desired option.
Your mental or physical health is at risk. If your business is causing you constant anxiety and worry over its success or finances, consider whether this is related to the current situation in the business or whether there is systemic issue in the business. If you believe the symptoms to be temporary, delegate tasks to others and take personal time to get yourself back on track. If the source of your concerns cannot really be remedied, consider other options such as a partner or even a planned exit from the business.
You lose sight of why you started the company in the first place. It may be that operational or personnel issues are overwhelming or that you have lost your own passion for the business. Either way, this isn’t a sign of a company that is on a growth trajectory. Consider selling the company to an investor who possesses the time and resources to run the company successfully. Use this time to find new passions or nurture aspects of your life you previously overlooked. You might even see yourself starting on a new business journey.
Your valuable employees are walking out the door. If members of your leadership team are putting in their two-weeks’ notice and finding a job elsewhere, this might be a sign your company is in jeopardy. Take a look in the mirror and analyze why this is occurring. If there are multiple red flags, it is time to seriously evaluate the problems facing your business. Move quickly and decisively to analyze the issues and again consider engaging a third-party expert who will bring an objective eye to the issues at hand. Develop an action plan that establishes clear goals, deadlines and metrics as well as a plan to measure those goals.
Your customers aren’t the biggest fans of your product – you are. You had this great idea for a product or service and spent countless hours building a business model to realize your vision. However, if your sales are in decline and you find yourself increasing your advertising budget each month, your company is struggling. It’s time to go back to the drawing board, if the market doesn’t see the value of your product. If new ideas are in place to rebrand or enhance the product to give it added value, that’s great. If you find yourself staring at a blank space with no new ideas coming to mind, you need to strongly evaluate the prospects for the product and determine if it has reached the end of its business life.
Entrepreneurs live for the businesses they have created. But, many entrepreneurs have started one business that ultimately did not succeed only to start a second venture that succeeds beyond their wildest expectations. As your business experiences difficulties, it is important to get real perspective on the seriousness of the issues often by seeking the counsel of a trusted advisor. While it is hard to admit defeat, all the experience and knowledge you take from the business you exit will contribute to your next venture. Bring your passion and your objective evaluation to your business and you will quickly distinguish between an obstacle and an off-ramp. And the off-ramp may lead to a great new venture.