Is your business stressing you out?
Owning and running your own business can be an exciting, fulfilling and financially rewarding experience.
But just like life it doesn’t always go according to plan and even the most successful business owners experience problems, stress and sometimes failures along the way.
There have been a number of studies on the causes of stress in business over the years and it’s an area that I have taken a real interest in. After reading many of these studies, and talking to clients and colleagues about it over the years, there are five issues that come up again and again.
In no particular order of importance here are my top five.
1. Lack of control
A lot of people start a small business because they want to have control over their destiny, their time and how they work with their clients so it might seem strange that this would be a major issue.
The reality is that as businesses grow there are a myriad of issues that come up that are outside of your control. For example supplier prices and deliveries, employee behaviour, client demands even climate change (notice your insurance premiums going up more and more recently?).
Allowing yourself to become frustrated with outside interruptions over which you have no control can cause your blood pressure to rise and your confidence to wane. Often, the only area where you have constant control is yourself and your own reactions to the uncontrollable factors in business.
The list of things over which you have little or no control is endless, so the best approach is to recognise those factors and develop ways to successfully deal with unexpected situations when they occur.
2. Cash flow
There’s an old saying that ‘cash is king’ and while this is true of any business it can cause greater stress to the average small business.
Cash flow is often quite tight in the early days of business and even if it seems to be going well it may only take one or two unexpected things like a slow paying customer or a cost blowout on a job to put a serious dent in your cash reserves.
What about that BAS payment or tax liability that lands on your desk one or two days before it’s due. Sure, you knew it was coming but you might not have expected it to be that much! Wouldn’t it be great if you had some advance warning?
The key to reducing this stress is to implement good financial and cash flow management systems in your business. Typically this involves forecasting on a rolling monthly or six weekly basis and running some ‘what if’ scenarios to help you understand the impact of a spending decision or delays in receiving payments from your customers.
3. Digital disruption
This one wasn’t on the list five years ago, maybe even three years ago, but it’s becoming a bigger issue every day. Not a day goes by that we don’t see an article or news report on how digital technology is disrupting business and causing loss of jobs and occupations.
It’s important to hear the message in these reports because nobody wants to end up like Kodak or Nokia, but it can also be just as dangerous to overreact and start to panic that your service or product is going to disappear overnight.
Take time to understand any changes coming, assess the impact on your business and, if necessary, seek advice from an expert in that area. With the right research and understanding you may find that the new technology will actually be an opportunity for you to become more efficient rather than a threat to your existence.
4. Not enough time
As a business owner it can often feel like everything falls back on you. Have you ever felt that that if you don’t do it, it won’t get done or that it will only get done right if you do it yourself?
Trying to do everything yourself often means you end up working 60 – 70 hours a week which is often damaging to your health and not sustainable in the long run. By acknowledging you can only do so much in one day and accepting that your health - including sleep, exercise and eating habits - all contribute to your overall professional performance, you can better manage your day-to-day stresses.
The key to good time management is to understand what is really important, set priorities and stick to the plan. I encourage all business owners I work with to ‘only do what you can do’ – that is, identify those things that are absolutely imperative for you to do and let others help with the rest.
5. Lack of confidence to make decisions
People procrastinate over making decisions for a variety of reasons but with business owners it often comes down to worrying about what impact it will make on profits, cash flow, employees etc.. It can also be due to a lack of clarity on your purpose, goals and business strategies.
Having confidence in the business numbers you are looking at on a daily basis, and the ability to run some ‘what if’ scenarios and projections, will allow you gauge the financial impact of a wide range of items under consideration.
With a clear business plan and strategies to achieve the things that are most important to you and your business you will have a framework for determining if the decision you’re about to make is aligned with your overall goals.
None of this means that every decision will be 100% correct 100% of the time but it will provide confidence to move forward and give you the ability to assess outcomes and quickly make decisions on any corrective action needed.
So how do you deal with these stresses? I believe there are two critical elements that every small business owner needs – a good business plan and a great adviser or mentor.
Having a risk management plan within your overall business plan will help with dealing with those unexpected surprises that are out of your control. For example, what do you do if a job blows out? Just wear it or have a process in place to be proactive with your clients and communicate well ahead why you may need to invoice them a little more. Similarly a well thought out, forward looking technology plan can help identify threats from digital disruption and how to react when the warning signs start to appear.
A good accountant or business adviser can help you with sound financial and cash flow management, freeing up your time to focus on what’s most important for you to be doing and helping you to make better decisions through greater confidence in the numbers in front of you.
They can also act as an advisory board or mentor to remove the isolation you may be feeling and provide an objective, independent view on many aspects of your business.
I encourage everyone to ask themselves one question – are you running your business or is it running over the top of you? If it’s the latter then it’s time to get some help.