From last week: The moment of truth has come. The business is not performing to expectations and your dream to be your own boss is almost in tatters. Time to send out an SOS part 1 – save our small business.
Structural resilience – Can you introduce investors into the business who would inject additional cash in return for equity? Investors can be working partners, silent partners or a myriad of other arrangements. A word of caution: adding partners into a business can create more complications than a marriage, because money is involved.
On the positive side, introducing a partner can make or break your business dreams. Never be afraid of the complications. Just manage whatever challenges that may occur with the help of your lawyer and accountant. One will take care of the legal ‘prenuptial agreement’ for the partnership/investment and the other will manage the tax and financial implications of the changes.
Strategic resilience – When does all this need to happen? Establish a time frame for the turnaround and when you will see the fruits of your labour and pain. Talking about short-term pain for long-term gain, you need to define short term: is it three months or a year? Also, is long-term six months or two years? It is advisable that you write down your calculations and assumptions. This will help you visualise and crystallise your thoughts and ideas as well as serve as a reminder of the goals ahead.
Seek a second opinion
You will need to have considered at least the first six points above in order to seek an accurate second opinion. You need at least one mentor, but not a tribe of mentors. There’s an old proverb that says ‘If you are wise, you are wise for yourself, and if you scoff, you alone will bear it. Wisdom is with those who receive counsel’. Your mentor or advisor can help you with some of the detail and particularly the seventh point.
If you do not have a mentor, hire one. Most Australian states have appointed a Small Business Commissioner and the federal government also has the office of the Australian Small Business Commissioner – www.asbc.gov.au. Any of those organisations will provide a subsidised or free mentoring service. The mentors usually have a great depth of business experience that you can rely on. Before you speak with a mentor, it is imperative to note that the mentors will only advise you based on the information that you provide and to the extent of your capabilities and your resilience levels. The onus is on you to present the complete picture.
Your own self-belief will count for more than the doubters. Tread carefully, rather than with trepidation. Still, don’t be overconfident: according to the captain of the Titanic, ‘I cannot imagine any condition which would cause this ship to founder…modern shipbuilding has gone beyond that’.
The world’s worst predictions
Before walking away from your business, take note:
• In 1876 USA President Rutherford predicted that no-one will want to use the new invention called a telephone.
• In 1903 Henry Ford, the founder of Ford Motor Company, had his loan application rejected by the CEO of Michigan Bank because ‘the horse is here to stay; the automobile is only a novelty – a fad’.
• In 1955 Variety magazine predicted that rock-and-roll would only last one summer and Elvis Presley would fade.
• In 1962 the executives from Decca Records rejected the Beatles after their audition.
Nader Seifen, Head of Franchising & Leasing, Telechoice
