Small-business owners aren't immune to life’s ups and downs. A sudden health diagnosis, a divorce or an unforeseen financial stress can make an entrepreneur feel isolated and desperate. When a small-business owner comes to such a critical crossroads, the decisions made can have profound and lasting effects on the company.
"There is almost always hope for business owners—even when they think there is nothing left to do,” says David Wimer, co-author of INSIGHT: Business Advice in an Age of Complexity, which addresses this topic. “Owners need to know there are many options for obtaining advice and assistance and how to prevent crisis situations from occurring when at all possible.”
There is no doubt that problems will arise, and given the fact that the small-business owner is in charge of so many critical pieces of the company, it can be a stressful time.
“A lot can go wrong,” says Wimer, who is also founder and managing principal of David Wimer Advisors. He works with privately held, family businesses to navigate business transitions and prevent financial crisis.
“Many owners casually accept the risks of business ownership while discounting the potential impacts of those risks, such as loss of intellectual property, loss of customer relationships, loss of legacy information, loss of entrepreneurial spirit, loss of business value, loss of cash flow, and even more," he says. "Whether any of these problems become crises is usually within the control of the business owner.”
The surest way to weather a setback is to anticipate potential disaster before it has a chance to strike. “When key executives and managers know exactly what to do if you're not there, they can respond accordingly, and knowing there is a plan in place is comforting,” Wimer says. “Planning helps to keep everyone oriented, especially when they are emotionally stressed. Otherwise, the situation becomes highly reactive and hyper-stressful.”
Not having a preparedness plan in place could even mean losing your business, says Wimer, who tells the story of a business owner who appeared to be in perfect health and elected not to take out a key man life insurance policy suggested by his financial advisors.
“A year later, he was diagnosed with stage four pancreatic cancer, " he says. "His wife and son were active in his thriving five-year-old home health-care business, but because he didn’t have a plan in place, they lost their option to run it, so the company had to be sold while he was undergoing aggressive chemotherapy. Had the owner elected to secure the insurance, there would have been the funds to hire in a key executive to run the business while the owner recovered.”
Share the Burden
Seek help from trusted advisors during a crisis. While this may take some humility and courage, discussing the problem and getting it out in the open is critical. “Avoid denying there is an issue, and don’t convince yourself you can solve your problems better than others who can be objective,” Wimer warns. “Relay your troubles to those who have been in a scrape or two themselves and can provide you with viable options. And whatever you do, don’t go it alone or wallow in pity.”
By their very nature, crises are negative, says Karen Zeigler, a life strategist for women in leadership, who provides business coaching and is author of Freedom from Worry: Prayer of Peace for an Anxious Mind. “Avoid letting your mind go totally negative, because the negativity will permeate every area of your life, including your health,” she says. “Respond in positive and empowering ways by celebrating the good in your life, as well as the lessons learned and opportunities that inevitably result from a crisis.”
Life gets busy, and when things are going well, we tend to run past those activities that fill our spirit and bring us peace, Zeigler says. “Often it isn't until the shock of a crisis hits that we realize we have lost sight of those things. It is often the anxiety of the crisis that drives people to their knees. Reconnecting spiritually helps get you back on your feet. You can do this by spending time alone in nature, in prayer, journaling and meditation.”
Reinvent if Necessary
If circumstances occur that slow down or stop business, such as a financial downturn, consider reinventing your business and yourself, Zeigler suggests. “If the money is no longer coming in, look to see where it’s going, and then consider changing gears so that you are in the right market.”
“Crises tend to shake things up, and almost always there is some portion of your business that needs a shaking,” she adds. “Take this opportunity to make sure your business comes out not only having survived the crisis but better because of it.”
Read more articles on leadership.
Photo: Getty Images