How to cope with the emotional highs and lows of the early days.
You've got an idea. A great idea. Maybe it could even make some real money. As you're starting out, buckle up: it's likely to be a bumpy ride of emotions and challenges you may have never experienced before. So it's important to learn to harness the emotions that will drive your business forward and ignore the ones that could derail you along your journey to success.
Give power to your perseverance.
Some might also call this courage. It takes bravery to chase a vision in the face of uncertainty—to maintain conviction in your business idea in order to survive AND thrive. Now, keep in mind, there's a big difference between being bold and taking on unnecessary risk. Some entrepreneurs roll the dice, but the vast majority make calculated wagers based on exhaustive risk/reward evaluations.
Pair your passion with preparation.
Passion, in and of itself, can be wonderful, inspiring. It can give you a competitive advantage, the drive needed to propel your idea forward no matter what stands in your way. Investors may even be inspired by your faith. But, unsurprisingly, a 2009 study found that preparedness, not necessarily passion, attracted venture capital. Pay careful consideration to market needs. Conduct your own research through surveys or focus groups.
At minimum, get answers to these questions:
- Demand: Is there a desire for your product or service?
- Market size: How many people would be interested in your offering?
- Economic indicators: What is the income range and employment rate?
- Location: Where do your customers live and where can your business reach?
- Market saturation: How many similar options are already available?
- Pricing: What do potential customers pay for alternatives?
Fetter your fear.
Worrying that you might fail at this endeavor both helps and hurts. By itself, this fear is well-founded. Roughly 70% of ventures fail within 10 years, according to the U.S. Bureau of Labor Statistics. And then there is the opposite, fear of success, which can cause some entrepreneurs to shy away from rapid growth or become unable to make decisions when overwhelmed with possibility.
Without risk, or fear, there can be no reward. But temper this feeling so you can look logically at how to maximize gain and minimize loss. When fear rears its ugly head, and it certainly will, do nothing. It's hard to be rational when you are in that state, so take a pause and let your emotions settle. Another option to help quell fear is to partner with an accomplished mentor, perhaps one who has shepherded a business through the startup and growth phases. They can offer advice on common fears that plague small business owners, like:
- Financial instability for employees and your family
- Increased competition
- Shifts in market landscape
- The unknown (e.g., natural disasters)
- Inability to secure funding
Of course, not all fears are created equal. Some are actually motivators. Research has found that entrepreneurs become positively persistent in the face of worries concerning opportunity costs, financial security for their families and their employees, or ability to obtain funding.
On the flip side, business builders who worried their idea lacked potential or felt insecure in their ability to create a successful venture were more likely to succumb to negative self-talk and become less motivated. Worse yet, they had a tendency to slice and dice data, overanalyzing everything to avoid making another decision. Be aware, too, that fear can compromise effective goal setting. Fear of failure may prompt you to tackle low hanging fruit first—easily achievable objectives—but it could also spur you to aim for wildly impossible goals—which are easier to rationalize if you don't achieve them.
Don't get defeated.
A great idea and a solid business plan aren't the only components to launching a successful business. There's a significant amount of trial and error, of testing, rethinking, tweaking. And it can be FRUSTRATING. Ultimately, you may learn from your mistakes, but the process can be taxing.
In these early days, if you can learn to channel your emotions the right way, you'll find yourself growing, hiring talent and attracting additional funding—all ultimately leading to a successful venture.
Article provided by Melissa Stewart, CFP®, AIF®, Financial Advisor at Blueway Financial Partners of Raymond James.
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