I believe that a person’s mindset is much more important than most people believe. Do you have any experience of a friend, colleague, business associate or a family member who is always negative? They are always expecting the worst happened in any situation. They not only fear/expect the most extreme outcome in any given situation, but they then proclaim this extreme outcome as the only option which they then declaim as inevitable. Is it possible to be successful in business with such a highly negative mindset? How damaging on entrepreneurial businesses is such a negative attitude? What should owner managed business owners expect to deal with? How should they plan to cope?
Is it possible to be successful in business with such a highly negative mindset?
Entrepreneurial businesses are founded on a belief or a hope that the product or service they are promoting will be in demand by businesses or the public when it becomes available. This belief can be without a lot of evidence at the time the business is started. Therefore, the success of the business requires that the entrepreneur must have strong confidence in their vision. Without which they will succumb to the natural downs in a business’s life and at this point in the businesses’ life they give up becoming just another statistic which adversely affects them and their confidence as well as discouraging new entrepreneurs.
They may believe that the demand for their product or service will be validated by the marketplace, but this can take time, often a lot of time. During which many people will be actively discouraging the business owner sometime due to their not wanting them to succeed or because they cannot conceive of such a success themselves. These people are often close family members and old friends whose discouragement is difficult to shake off.
Therefore, the entrepreneur will require to be strong minded and to perseverance in the face of these discouragements. They will need to focus on the company’s vision especially when the evidence is in short supply. Without a strong belief it is impossible to successfully navigate the setbacks which take place in the early years of a business. A negative mindset will undermine you and drag you down just at the time when you need to push through any setbacks to achieve success.
Why is this attitude so damaging?
So much depends on mindset. Nothing comes easy. Studying for exams is hard. Getting experience is hard and often comes with setbacks which need to be overcome. This is the background to life in general and can lead to people always looking for the easy route in life. This is not good training for running a business. When your main customer has just left you for a competitor you need to have reserves of self-belief and a determination to find the 6 more customers you need to replace the one who has left. This obviously should be accompanied by a clear and robust process which will support your customer search. However, even without this excellent process the setback needs to create a desire to not be defeated and if necessary to create a better sales process which will deliver the new additional customers. In this sense setback become the mother of invention.
What does this mindset do to a business owner?
The most important aspect of this poor mindset is to prevent the creation of a business owner who is mentally resilient, self-reliance and a determination to succeed. Without these attributes at the start of your business owning life, they will need to be forged in the heat of the business’s battles. This will be costly in time and money. If it delays the development of the business in the first three years, then much shareholder capital can be wasted in this time and may mean that the business owner loses a significant percentage of the ownership of the business during this time. If a company sells for say £5 million and you have lost between 25-50% of your ownership of the business, then this will cost you £1.25-£2.5 million. The consequences on the business owner personally can be divorce addiction to drugs or alcohol. So, this is a serious matter. Do not dismiss the importance of getting your mindset clear and congruent with your business objectives.
How damaging on entrepreneurial businesses is such a negative attitude?
The corrosiveness of a negative mindset can undermine the best of business ideas since the business owner is undermined by doubts or criticism which at critical junctures means that they do not make the best decisions or in fact make very bad and wrong decisions. This situation can lead the business to choosing to take on predatory outside investment. This can then lead to decisions being forced on the company by the predatory investor for short term financial gains which only go to fatten the company up for sale. The subsequent sale may mean that the predatory investor is removed but if then the company’s results are set back when the short term fixes prove to be harmful, then the financial reward based on an earn out for the CEO proves to be illusory and the reward for the CEO evaporates like the morning dew. If only the CEO had fixed his mindset first.
What should owner managed business owners expect to deal with?
A business owner should expect to have to deal with setbacks. Staff that do not turn up for work, claiming to be sick when they are not. New staff who need maternity leave at a critical time for the business. Salespeople who they discover after paying them for six months that cannot sell. A new product which was thought to be the best in the market is suddenly not wanted by anyone with the consequent impact on sales and cash. Every day is going to be a challenge. A successful CEO can become a very good firefighter, spending the working day fighting the fires that others in the business have started sometimes deliberately. This skill can be very necessary in the early stage of the business but can limit the development of the business since the CEO and his management team concentrate too much on the issues of “TODAY” that they do not have time for planning for “TOMORROW” or “THE FUTURE”.
How should the plan to cope?
Probably the most important thing is to know yourself. What are your personal characteristics? How do you cope with pressure? If badly then should you consider running your own business. How do you cope with uncertainty? I came across a situation where a director who had been very successful in an established business found it very difficult in a start-up since he struggled with a blank page. When he left, he joined another established business and was like a man transformed being as happy as Larry within an established reporting structure. In such a situation someone at CEO level needs to clearly understand their weaknesses and then plan to build a team around them ensuring that their weaknesses are covered by other people’s strengths. Another situation I came across was a dual CEO appointment which worked since they had differing strong point. When one of the two left the remaining CEO started to struggle without the strengths of their compatriot. They ended up being unable to recruit a suitable replacement and their weaknesses being overexposed subsequently led them to be replaced.
What can you do to help yourself?
It is important that the lessons outlined above a learned. If you are starting out and you evaluate that you have some of the mindset issues that I have covered in this article, then contact one or all three of the people below. The all cover something different though they do overlap. It is important to get the help that you need as early as possible. Do not delay and pay the cost as is cheaper than the cost of a failed business or the cost of three years lost growth which will cost you millions on the valuation of your business when you come to sell your business in 5-10 years’ time. So do not delay in getting help if you need it or at least assessing if you need help or if your mindset has been damaged over the time you have been in business.
How is your mindset especially after the last 15 months of Covid restrictions? There has been more incidents of “mental health” issues since January 2021 in both adults and children due to the lockdown restrictions coinciding with the winter months and the uncertainty of when lockdown would end. The continued pessimism from the “modelers” has not helped nor have the speculation that restrictions might continue into 2022.
So do you need help?
If so then you may want to contact one of the following: