Personal Finance

Bitter truth about tough start-up road

IDEa

Summary

  • Starting and sustaining a business is tough.
  • Constant rethinks are required.
  • What the textbook approach preaches, and what really happens are often worlds apart.

“She who plans, must plan often” said a Chinese statesman.

Starting and sustaining a business is tough. Constant rethinks are required. What the textbook approach preaches, and what really happens are often worlds apart.

Plan on paper is not the business Have you ever ordered an item off a restaurant menu, and then when it came, have to ask, “Was that what I ordered ?” Just as the menu desc-ription is not the meal, business plans can be deceptive.

It’s not very difficult to craft a plan covering say four areas, sales and marketing, operations, people and skills and finance that suggest the start–up will do the corporate equivalent of ‘walk on water’.

Just about all small and medium business plans say the business will do astounding well, in a remarkably short period of time. However, in reality, many business plans don’t survive their first contact with the customer.

Yes, it’s important to have a ‘can do’ optimistic attitude, but blind ambition and blatant exaggeration , can lead to a dark disappointing outcome. A touch of prudence and caution is always helpful.

Invert your thinking, and imagine the very worst that can happen in a number of areas, and show how these will be addressed. What auditors would call: risk mitigation.

It’s all in the entrepreneurs head

Just as an architect designs a building with ‘form following function’, it is useful to try a sketch out what the business will look at in a plan, or by using a business canvas approach.

But in practice many successful entrepreneurs don’t have a formal business plan. They have a picture of the enterprise in their head and are constantly thinking about it, ‘what about this, what about that’.

And, may even be working like many Chinese do on a 996 basis, from 9 am to 9 pm, 6 days a week. No, this is not what the textbooks may say, but it is the day to day reality of many smaller successful businesses.

Excel spreadsheets can be deceptive

on the finance dimension, a few subtle hard to spot percentage increases can give a remarkable result. Make the finance assumptions crystal clear and create three scenarios: optimistic, middle ground and the worst case.

If the enterprise can move forward on the worst case scenario, then you may be in business.

Remember your chemistry

Two types of reactions -- Exothermic reactions transfer energy (in the form of heat) to their surroundings and the temperature of the environment increases.

Endothermic reactions take in energy and the temperature of the surroundings decreases. As much as possible, surround yourself with exothermic people, those who give off a good vibe, who are energetic. Only so much of an energy drain is possible.

Work with a small number of switched-on staff

Staffing is often not about numbers. Better to work with those, perhaps few in number, who have the knowledge, skills and mindset required. It may be the case that two people can do the work of ten, based on being focused, leveraging ICT.

Sometimes one person can do in a few hours, what it would take others weeks to get done, or may never get done, and then only with Mexican soap opera like drama.

Market does not lie

Just as Lady Justice with her scales is said to be blind, [unfortunately] the market place does not lie. When there is no uptake in the [thought to be] great product or service that is a signal.

Yes, it is painful. But think about what the market, the customers are telling you and quickly go back to the drawing board, and rapidly evolve and adapt.

What you think will happen, probably won’t

Somehow you have to hold two conflicting thoughts in your grey matter. Yes, have targets and intentions, but be open to the possibility that things won’t work out as planned. As Napoleon said: “I have never seen a battle go according to plan.” Stay flexible, stay agile.

Devour every book and YouTube clip

that you can on business. After awhile you will begin to see a pattern with the key concepts emerging. YouTube gives you access to world class business ideas and how to steps, watch two or three clips a day.

Have a mentor or coach

get the input of someone who has successfully addressed the problems you’re facing. Get their input, perhaps meet for a cup of tea once per week, or link up on a Zoom call.

Rejections will be there

customers and business partners will at times reject your pitches. It won’t all be smooth sailing. Listen to the feedback, think about what it is telling you, but be persistent. It’s said that after the third rejection, that is where the money is made.

Mindset is everything

Corona has been the great stressful disruptor that has changed how the world does business. Think of your mind, your mental health like a home that needs to be a safe space, warm and welcoming. Take some time to clear the junk out the attic, and create mental space.

Sometimes one can only take so much stress, before it begins to take it’s physical toll. Take time for long walks, spend time in nature, and just close your eyes and breathe.

Make the distinction between deep and shallow work

In our world of the incessant beat of constant inputs and distractions, recognise that there are all those shallow work administrative tasks, that you may be able to do in semi distracted state, like sending e mails and running chores.

But, sometimes you need to sit down and just think in a quiet space and focus on deep work, to be genuinely productive. “If you don’t produce, you won’t thrive, no matter how skilled or talented you are” is how Deep Work author Cal Newport expresses it.