No one said building a company is easy. But small business owners find it difficult to be honest about how brutal it really can be and the emotional price so many of them secretly pay.
At one time or another most small business owners will find themselves on the brink of financial ruin. During these times, what they won’t tell you is that they’re also on the brink of mental and emotional collapse.
Their calm demeanor will mask their secret emotions. They may look fine on the outside, but on the inside they are an emotional wreck. You’ll often hear small business owners describe waking up at night staring at the ceiling, with their mind racing, thinking about this or that and not being able to shut it off. They wonder “when is this thing going to turn around?” They will live with constant anxiety and sometimes may have panic attacks when they are by themselves. Some call this entrepreneurial terror, which is an all-encompassing dread that comes from nowhere. You feel like you’re looking into the abyss and there’s nothing to prevent you from falling headfirst into it. You scream soundlessly and no one can hear.
Over time, the experience of these private emotions can lead to despair. Small business owners, by their very position, need to be positive and upbeat in order to grow their business. This requires of the business owner an impressive ability to repress and compartmentalize their emotions. It’s both a necessary skill and a hazard of the job. The compartmentalization of their emotions also gives them relief, even if temporary, from the anxieties, fears, and pressures of their business, but the compartmentalization does nothing positive for them in the long run. In a “pick yourself up by your bootstraps” business culture, admitting that you struggle with strong, negative emotions is like admitting that you can’t reach your bootstraps. It’s just assumed that successful people will just “shake it off” and move on toward success.
No one ever tells the business owner that the marketplace can be a very unfriendly environment in which to start a business. They don’t always tell you that doing specialized work and operating a business that does specialized work are as different as night and day. Entrepreneurs who are highly skilled in a particular area and end up starting their own business are often not told that they must understand numbers in order to run their business successfully. They also don’t realize that they have to sell, even if they never see themselves as being salesmen. They’re never told that nobody really cares about their business. And to top it off, they’re never told that their ability to convince others is critical to their success. Relationships really matter in business, and yet it is relationships that are most damaged when a small business owners’ emotions are tightly controlled and compartmentalized. No matter how much a small business owner tries to repress and compartmentalize their emotions, the emotions will come out for everyone to see. As one small business owner told me as I was thinking of starting my own business, “your heart will be laid bare for everyone to see.” He was right.
Distressed business owners will have an impressive capacity to absorb their internal struggles without telling anyone about them. In extreme cases, death will feel like a better option than living. For others, the embarrassment of failure coupled with the knowledge that your best simply wasn’t good enough will drive them to a lower self-esteem and a depression that may last for some time. When we are successful in our work we feel invigorated, purposeful, dignified, and needed. When we fail in our work we feel drained, embarrassed, insignificant, unimportant, empty, discouraged, disheartened and unneeded.
When a small business is failing
Small business owners don’t always know the point at which they moved from creating profit to creating loss. They certainly won’t depend on their emotions to tell them. Most non-owners assume that small business owners persist in their business because the business is performing well enough to create a profit for them. Most also assumed that the business owner would exit the market and shut down the business if current losses exceed the present value of the expected profits. What folks fail to realize is that the accounting practices of most small business owners are such that they may not be immediately aware of the point in time when the company becomes failing. This point is supported by numerous bankruptcy prediction models which provide performance thresholds that once breached, indicate that failure is highly probable if not inevitable. Many also assume that once small business owners realize their businesses will fail that they immediately take action to terminate their business. These assumptions are not always correct.
Christian small business owners hang onto longer than they should often because they have a strong sense of a moral obligation to pay their vendors 100 cents on the dollar. They understand that if they close their business, that they will end up not honoring all of their financial commitments and this is an anathema to them personally. So they figure the best way to get their debts paid off is to keep whatever revenue generating engine they have in their business, cut expenses and try to turbocharge the revenue generation side to create enough cash flow to pay off their business debts.
But the cost of closing down a business is much more than simply paying off current payables. Longer-term contracts, such as lease agreements or phone systems, can be difficult to escape. So even though staying in the business is emotionally unattractive to the small business owner, the moral obligation they feel to not “shaft” anyone may drive much of their decision-making about how long they persist in their failing business rather than the emotions that they are feeling. Remember they’re good at compartmentalizing and repressing their emotions, so their decisions, in an odd way, make sense.
Small business owners may also stay in the business too long because they just can’t bring themselves to admit that their source of livelihood is going away. “What will I do?” is a thought that will run through their minds repeatedly. If they are true entrepreneurs, they’ll have a very hard time conceptualizing the thought of working for someone else. And yet starting another business may not be all that attractive to them either. So they stay in a failing business because the alternatives are not much better from their viewpoint.
Managing your emotions during the downturn
There are things that small business owners can do to manage their emotions when their business is failing. First, the most important thing is to take time for the ones you love and to take time to connect with God every day. As a Christian business owner, if you are harboring sin, you can be sure that God will not bless your business. This is why confessing and repenting of your sin on a regular basis is so important to ensuring that the enemy does not have a foothold in your life and your business to cause destruction.
Secondly, you should not be afraid to ask for help. Don’t be afraid to see a mental health professional or a medical doctor for some antidepressant medication or attendance at CEO and business leader groups or even just grabbing a cup of coffee with a close friend.
Thirdly, your natural tendency will be to work harder and harder and harder to turn your business around. This is the wrong thing to do. Maintaining balance in your life and surrounding yourself with good advisors will enable you to live your life even when your business is failing. Maintaining balance includes taking digital sabbaticals every week where you do not check email or voicemail’s or Facebook or foursquare or any other social media.
Fourthly, limit your financial exposure in the business. This will be a blind spot for you so you will need an advisor to help you assess. Set a limit for how much of your own money you’re prepared to lose, and don’t let friends and family kick in more money than they can afford to lose.
Finally, stay focused on what you can do right now to improve your situation. Focus on doing the small things well and find pride and satisfaction in them. Don’t brood over the big picture of how poorly your business is doing. For sure, you need to embrace your situation and the unvarnished truth. But most of your focus should not be on worrying about the big picture and all the “what if’s” that could happen. Instead, your focus should be on doing what you can to embrace change and positive actions that will increase revenue or decrease expenses.
Reframing failure and loss and learning from it
The ability to refrain failure and loss can also help small business owners maintain good mental health. You’ll be tempted to tell yourself, “I failed, I’m a loser.” But if you look at it from a different perspective, you’ll realize that “nothing ventured, nothing gained” is a motto that nearly everyone understands.
Sometimes a business owners’ grief in their business interferes with the ability to learn from their experiences. Researchers found that using a dual process of grief recovery emotions can be managed in a way that minimizes interference and maximizes learning. Specifically, business owner should oscillate between a loss orientation process and a restoration orientation set to best use negative emotions to focus their attention on the event will simultaneously and allowing the cotton in the kitchen. Given a small business owners’ propensity for repression and compartmentalization, having them feel their grief may be a challenge.
Businesses fail for any number of reasons. Some of fail due to a change in laws, regulations or industry technologies that the business is simply not able to adapt to. Other businesses change due to a discontinuity of ownership. Sometimes the performance of the owner himself is so poor that the business fails. The reason that a small business owner experiences failure has a direct impact on the magnitude of his emotions. For example, if the failure is due to a sudden change in industry technology that the small business owner simply does not have the financial capacity to adapt to, then there is a sense in which the owner can shift the blame away from himself and onto the technology change. The owner “saves face”. But if, all things being equal, the business should have survived and thrived and yet it still failed, then the owner has no one to blame but himself. This increases the magnitude of the negative emotions that the business owner feels.
At a minimum failure is likely to impose a financial cost on the business owner in the form of a loss of or reduction in personal income. While a degree of financial cost is to be expected following failure, an interesting issue relates to how business owners manage or absorb these costs. For many business owners, financial cost may take the form of personal debt that takes years to clear out. If the business owner has a portfolio of other businesses, the cost may be transferred and absorbed by the other businesses which are profitable and ongoing.
Often, failure will lead to social costs in relation to its impact on personal and professional relationships for the business owner. Not only is the owners’ marriage affected (see below), but professional and social relationships may be damaged as well.
Business owners can learn from the failures if they have the opportunity to use the information about why the business failed to revise their existing knowledge of how to effectively manage their own businesses. This knowledge often relates to one’s self as an entrepreneur, manager, and leader; issue surrounding the management of cash investment; managing internal and external stakeholder relationships; building and managing partnerships; managing the challenges of growth and understanding the marketplace and competition.
You might be surprised to learn the research shows that many business owners who have experienced business failure not only develop strong intentions to start subsequent businesses but they actually do so. If a key benefit of failure is that it provides a learning opportunity, then we might expect subsequent businesses owned by business owners who have experienced failure to perform better. Unfortunately, there is an absence of research testing this hypothesis. But some research shows that there is no qualitative difference between businesses that are run by owners who have never failed business and those who have failed business. This pessimistic view of a business owner’s ability to learn from his mistakes is not encouraging. This means it is likely that the owner will make similar mistakes and his subsequent business and may continue to repress and compartmentalize his emotions instead of managing his emotions in a healthier manner.
Marriage and a failing business
As a business is failing, the small business owners’ belief in himself alters and sometimes even shatters. But so can many of his relationships. He’ll feel responsible for everyone: his employees, the lenders to whom he owes money, the investors who bet on his idea, and for sure himself and his family. The small business owner might even realize that he has reset his family’s fortunes back to square one, they might be at square -1 million.
In all of this, the spouses expected to remain strong and encouraging. If their marriage is healthy, she’ll try to channel her emotions into pragmatism. If the marriage is shaky, then all those recriminations built up over the years of scrimping and postponing and single parenting will come gushing out in a rather ugly and difficult-to-repair way. A failed business may consume a couple’s assets until there’s nothing left. It may do the same for their love for each other.
We need to understand that the spouse experiences the failure of the business differently than the small business owner. The small business owner may regret his mistakes but his spouse is left wondering “was all that sacrifice really for nothing?” While it’s great to hear his spouse’s reassurance: “you did the best you could.”, sometimes the spouse can only blather, “How could you?”
The anger and hurt that a spouse feels will contribute to the compartmentalization, repression, and loneliness that the small business owner feels when the business fail. Left to mourn largely on his own, a spouse may keep herself at arms-length from the small business owner both emotionally and physically. This does not contribute to a healthy grieving process for both of them. And it does not contribute to using the failure as an opportunity to strengthen their marriage.
The time it takes for a couple to rebound is largely a function of the owners’ resiliency. Some small business owners are drawing up a new business plan within days after the failure is finalized. Others are paralyzed to the point where they can’t even go out and look for work, which only contributes to the negative emotions of their business failure.
When a small business is successful in providing steady income to the small business owner, there is a sense of security and stability for the foreseeable future. But when the small business fails, the solid ground upon which the owner and his wife were standing can swiftly vanish. The downsizing of lifestyle and the loss of perks can tear at the fabric of a marriage as well as a spouse’s identity. Her position in her community as well as her security crumbles along with the business. Both will find their friends and relatives avoiding the subject of their failed business, treating it like a serious medical condition that everyone is aware of but too diplomatic to acknowledge. This will take its’ toll on their marriage if they ignore these factors. It’s best for their marriage if they can discuss what’s really going one without being critical or angry with each other.
A crisis is a terrible thing to waste. And the experience of a failed business is also a terrible thing to waste. God can use that experience in our lives to make us better people and better business owners for the future. He can take that which Satan intended for evil and turn it into good for his kingdom, his purposes and his church.
Recall Ephesians 2.10: “for we are his workmanship created in Christ Jesus to do good works, which God has prepared in advance for us to do.” There is no experience that is wasted by God in our lives. Every trial and every experience is to be stewarded for his glory. If you are to be given $1 million you would ask yourself the question, “how should I stewarded this million dollars for the Lord?” By the same token, when God gives us significant sufferings, we are to steward those for his glory as well.
If you have a failed business in your rear view mirror, be sure to take time to reflect on what you learned about yourself, your capacity to lead, and your abilities to successfully manage process and people. In addition learn about God and his graciousness and how he has brought you through that failed business experience. You might find that you have greater trust in the Lord, greater empathy for those going through difficult times, or an even greater sense of giving to those who are in need. You may be able to identify with Paul when he said, “I know what it is to be in need, and I know what it is to have plenty. I have learned the secret of being content in any and every situation: I can do all things through Christ who gives me strength.” (Philippians 4.11-13)
Use that which God has given you and has built into you to minister to those who are starting businesses and who need your wisdom and guidance to avoid the mistakes that you made. Become integrated emotionally and learned that your real strength as a business owner comes not from compartmentalization and repression, but from appropriate experience and expression of your emotions – both toward God and your fellow man. You’ll find that the emotional roll-a-coaster you were once on as a business owner will flatten out as you take the natural emotions that are inherent in running a business, submit them to God, experience them appropriately and learn to express them to those around you who are supporting you.
If you’re a business owner and your business is not thriving, give Bill a call today. 763-458-3722.