You’ve probably seen the statistics that show the uphill battle against business mortality: 55 percent of businesses fail by five years and 71 percent fail by 10 years.
There are many reasons why you started your business, but take some time to write down those reasons. You may need to look at it in the future to motivate you back to success. This article is my personal reminder.
Creating Emotional Clouds
Despite spending years working for a wide range of industries, from payroll to management, I continue to be amazed at the human brain’s inability to solve my company’s most basic problems while quickly recognizing the gaps in other companies.
The difference is, when working with other companies I only have to acknowledge the risk without taking any of it. As Freek Vermeulen wrote in Harvard Business Review:
"Precisely because strategic choices are such important ones, loaded with anxiety and uncertainty, when faced with a major decision people start to “follow their heart”, “rely on intuition” and “gut feeling”, overestimate their chances of success, and let their commitment escalate."
When you internalized the risk you let go of the clear strategy. You visualize the outcomes but stop looking clearly at how you get there. We don’t acknowledge the means to the end, or the ends of the means, because the gut decisions are not rational ones. Push towards planned, researched business decisions.
If you run a small business or manage a nonprofit, start making a list of the things affected by your emotional cloud. After you acknowledge it’s there you can start doing something about it.
Too much pride, resulting in an unwillingness to see or listen
Taking advice from the wrong people
Lacking good mentorship
Lack of general and domain-specific business knowledge: finance, operations, and marketing
Raising too much money too soon
Relying on Your Mission
A mission for a nonprofit is critical; the equivalent to profits in a for-profit company. But take the time to understand your for-profit mission. Make sure it will get you up every morning, ready to deliver what it promises. A strong mission takes care of the top 3 reasons businesses fail. For numbers 4 through 7, seek advice. Use that mission to move clouded judgement into rational thinking for your own business.
I started my company to help nonprofits and small businesses succeed. Throughout my career in finance and nonprofit management I have come across companies that struggle with just a few areas of the business, taking a toll on success. Sometimes it’s record keeping and other times it’s creating a broader strategy. The path to success is learning how to limit the effects of the emotional cloud and not having too much pride to seek the right help.
This was the business I chose because that limited awareness prevents otherwise good ideas from reaching enough capacity to be successful. My hope is that a potentially inevitable business failure can be mitigated by making a small investment to make sure it doesn’t fail.
Does your mission move you past the cloud of emotion?