Entrepreneurs must look at controlling their venture’s operations in order to survive and prosper in both the short run and long run. The unique control issues that face entrepreneurs include managing growth, managing downturns, exiting the venture, and managing personal life choices and challenges.
How Is Growth Managed?
Growth is a natural and desirable outcome for entrepreneurial ventures. Growth is what distinguishes an entrepreneurial venture. Entrepreneurial ventures pursue growth. Growing slowly can be successful, but so can rapid growth. Growing successfully doesn’t occur randomly or by luck. Successfully pursuing growth typically requires an entrepreneur to manage all the challenges associated with growing, which entails planning, organizing, and controlling for growth.
How Are Downturns Managed?
Although organizational growth is a desirable and important goal for entrepreneurial ventures, what happens when things don’t go as planned—when the growth strategies don’t result in the intended outcomes and, in fact, result in a decline in performance? There are challenges, as well, in managing the downturns.
Nobody likes to fail, especially entrepreneurs. However, when an entrepreneurial venture faces times of trouble, what can be done? How can downturns be managed successfully? The first step is recognizing that a crisis is brewing. An entrepreneur should be alert to the warning signs of a business in trouble. Some signals of potential performance decline include inadequate or negative cash flow, excess number of employees, unnecessary and cumbersome administrative procedures, fear of conflict and taking risks, tolerance of work incompetence, lack of a clear mission or goals, and ineffective or poor communication within the organization.
Although an entrepreneur hopes to never have to deal with organizational downturns, declines, or crises, these situations do occur. After all, nobody likes to think about things going bad or taking a turn for the worse. But that’s exactly what the entrepreneur should do—think about it before it happens. It’s important to have an up-to-date plan for covering crises.
It’s like mapping exit routes from your home in case of a fire. An entrepreneur wants to be prepared before an emergency hits. This plan should focus on providing specific details for controlling the most fundamental and critical aspects of running the venture—cash flow, accounts receivable, costs, and debt. Beyond having a plan for controlling the venture’s critical inflows and outflows, other actions would involve identifying specific strategies for cutting costs and restructuring the venture.
What’s involved with Exiting the Venture?
Getting out of an entrepreneurial venture may seem to be a strange thing for entrepreneurs to do. However, the entrepreneur may come to a point at which he or she decides it’s time to move on. That decision may be based on the fact that the entrepreneur hopes to capitalize financially on the investment in the venture—called harvesting—or that the entrepreneur is facing serious organizational performance problems and wants to get out, or even on the entrepreneur’s desire to focus on other pursuits (personal or business). The issues involved with exiting the venture include choosing a proper business valuation method and knowing what’s involved in the process of selling a business.
Although the hardest part of preparing to exit a venture may involve valuing it, other factors are also important. These include being prepared, deciding who will sell the business, considering the tax implications, screening potential buyers, and deciding whether to tell employees before or after the sale. The process of exiting the entrepreneurial venture should be approached as carefully as the process of launching it. If the entrepreneur is selling the venture on a positive note, he or she wants to realize the value built up in the business. If the venture is being exited because of declining performance, the entrepreneur wants to maximize the potential return.
Why Is It Important to Think About Managing Personal Challenges as an Entrepreneur?
Being an entrepreneur is extremely exciting and fulfilling, yet extremely demanding. It involves long hours, difficult demands, and high stress. Yet, many rewards can come with being an entrepreneur as well. Entrepreneurs are a special group. They’re focused, persistent, hardworking, and intelligent. Because they put so much of themselves into launching and growing their entrepreneurial ventures, many may neglect their personal lives. Entrepreneurs often have to make sacrifices to pursue their entrepreneurial dreams. However, they can make it work. They can balance their work and personal lives. But how?
One of the most important things an entrepreneur can do is become a good time manager. Prioritize what needs to be done. Use a planner (daily, weekly, monthly) to help schedule priorities. Some entrepreneurs don’t like taking the time to plan or prioritize, or they think it’s a ridiculous waste of time. Yet identifying the important duties and distinguishing them from those that aren’t so important actually makes an entrepreneur more efficient and effective. In addition, part of being a good time manager is delegating those decisions and actions the entrepreneur doesn’t have to be personally involved in to trusted employees. Although it may be hard to let go of some of the things they’ve always done, entrepreneurs who delegate effectively will see their personal productivity levels rise.
Another suggestion for finding that balance is to seek professional advice in those areas of business where it’s needed. Although entrepreneurs may be reluctant to spend scarce cash, the time, energy, and potential problems saved in the long run are well worth the investment. Competent professional advisers can provide entrepreneurs with information to make more intelligent decisions. Also, it’s important to deal with conflicts as they arise—both workplace and family conflicts.
If an entrepreneur doesn’t deal with conflicts, negative feelings are likely to crop up and lead to communication breakdowns. When communication falls apart, vital information may get lost, and people (employees and family members) may start to assume the worst. It can turn into a nightmare situation that feeds upon itself. The best strategy is to deal with conflicts as they come up. Talk, discuss, argue (if you must), but an entrepreneur shouldn’t avoid the conflict or pretend it doesn’t exist.
Another suggestion for achieving that balance between work and personal life is to develop a network of trusted friends and peers. Having a group of people to talk with is a good way for an entrepreneur to think through problems and issues. The support and encouragement offered by these people can be an invaluable source of strength for an entrepreneur.
Finally, recognize when your stress levels are too high. Entrepreneurs are achievers. They like to make things happen. They thrive on working hard. Yet, too much stress can lead to significant physical and emotional problems. Entrepreneurs have to learn when stress is overwhelming them and to do something about it. After all, what’s the point of growing and building a thriving entrepreneurial venture if you’re not around to enjoy it. Visit LSBF, one of the best online learning platforms, to learn more about entrepreneurship.
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