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Starting A Business in A Challenging Economic Climate, Part 2 (Limiting Risk)

Starting A Business in A Challenging Economic Climate, Part 2 (Limiting Risk)

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    In Part 1 of this series, I talked about why now is a good time to start a business. But without Part 2, Limiting Your Risk, you may be setting yourself up for problems. Now is a great time to start a business, but part of starting a business in this kind of economy is playing it smart.

    How You Can Limit Your Risk:

    When you start a business in challenging economic times, you’ll want to limit your risk as much as possible. There are several ways to go about this, but here are my top recommendations:

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    Get it right at the beginning. A lot of budding business owners skip crucial steps on their way to a business launch. I can’t tell you how many clients have come to me, a year or two into their businesses, without having set up their companies with the Secretary of State, the IRS, or having met with an attorney to help them set up their operating agreements. These are things that could get you in a lot of trouble if you don’t do them the right way.

    There are other steps that won’t necessarily get you into trouble, but may cause some headaches if you don’t get them right. Branding is an excellent example of one of the most-missed (and most misunderstood) steps in entrepreneurialism. It’s also one of the things that can make or break your company.  Choose a generic business name like “ABC Consulting” or create a brand that doesn’t intrigue your target market and you’ll start your business heading down the wrong path.

    Choose an industry that’s hot or one that’s a “need.” Generally, you want to go with the industry you know best, but at the same time, you can’t ignore what most business experts define as the wave of the new future. Currently, the hottest trends are green businesses, health care, natural beauty, discount retail and luxury, credit and debt management, and technology. If you can find a way to spin what you already know into one of these hot business areas, you’ll take advantage of the coming upsurge in these industries.

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    On the other hand, I also believe in going after the “needs” of your consumers. For example, I once worked with a guy who was a chimney sweep in the winter (something people need) and a custom SUV builder in the summer (a luxury people want). His winter need-based business was one that provided enough income for the whole year, just in case his want-based business waned in the summer.

    Start with a low-risk business model. When I work with a client to design a new business, we typically use what I call a “leap-frogging” or “dovetailing” approach. This is where you start your business using a low-risk business model and build from there, using the income from the first model to fund expansion and growth into more complex business models. This approach almost always allows my clients to start their own businesses without seeking any type of funding from lending institutions, venture capitalists, or other investors.

    Plan ahead. If you lose your job, there isn’t much you can do about that. And in this economy, you’d have to work a part-time job in addition to your regular full-time job to save up enough for the six to twelve months of living expenses I generally recommend when clients want to start a business they can work full-time from the beginning. But if you can keep your job and start your business part-time, you’ll reduce your risk substantially. This allows you to maintain a steady income while you’re building your business, and eventually, you can make the transition to being self-employed, full-time.

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    Market research can save you a lot of time and heartache. Before you head into any business startup, you want to know your market inside out. More than that, you want to know your target market. There are lots of ways to do the research. You can do your own research (called “primary research”) or you can use information compiled by others (“secondary research”). Both have their pros and cons, but the questions you want to answer are:

    • Who is my target market?
    • What do they want?
    • Can I deliver it to them?
    • If I deliver what they want, will they buy it?

    Leverage free and inexpensive marketing methods to build your business. A lot of new entrepreneurs develop complicated, expensive marketing campaigns before realizing how many ways there are to get the word out about their businesses without spending a fortune. And with the power of the Internet literally at our fingertips, it’s easier now than ever to build awareness for your brand. However, that doesn’t mean you should go out and build a giant Twitter following. There are so many online options, but all of them may not be appropriate for your target market.

    Get the right help. Before you launch a company, you want to find professionals who can help you start on the right foot. There are countless people out there calling themselves “consultants” and you have to be careful who you choose. The ideal business consultant for you is someone who understands a lot of different business models, especially the low-risk ones, and who can help you figure out the model that suits you best. You want someone you find personable, someone who knows what they’re doing, and someone you can trust.

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    In addition, make sure they don’t make promises that are too good to be true. A lot of business “experts” I’ve seen lately offer what amounts to “get rich quick schemes,” while others offer such vague information that you’re compelled to keep buying more books and products to get to the “real” information….which never actually comes. Instead of wasting your time on these folks, find someone genuine, real, and honest, who may not promise you the sun, moon and stars super-fast, but who can help you build a solid, stable income with real growth potential.  Work one-on-one with them to develop a sound business model and a strong brand with a viable marketing strategy that you can easily implement. A good business consultant will know how to work with whatever budget you have and tailor solutions to your needs. Plus, they should have an army of other professionals who can also work within your budget, but still offer high quality work.

    Build your team. Speaking of other professionals, you will need your own little army. In addition to a business consultant, you’ll also want an accountant, an attorney, a graphic designer and a web designer, and you may also want a virtual assistant and some other consultants, most of whom your business consultant probably has access to.

    Starting a business in an uncertain economy can feel risky, and it certainly has stopped a lot of people from moving forward with great ideas. But if you look at history and remember that some of the most solid businesses today were started in just such an economy, mitigate your risk factors and hire the right professionals from the start, you’ll give yourself a fantastic leg up on your competition, and set yourself up for success.

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    How to Hire A Web Design Firm Are You Having A Scarcity Conversation? 5 Topics To Address When Talking With Your Partner About Starting A Business How to Stay Motivated and On-Track When You’re Struggling How To Do What You Have To Do When You Don’t Feel Like Doing It

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    Last Updated on December 5, 2018

    How to Lead a Team More Effectively and Be a True Leader at Work

    How to Lead a Team More Effectively and Be a True Leader at Work

    Being an efficient manager and a charismatic boss at the same time can seem like an impossible task. Is there a way to deliver the desired results for your business while remaining liked and respected by your staff?

    We all know bad examples of team leaders who seem to fail at one aspect or the other, or even at both. But we’ve also heard of awesome managers who seem to juggle both things well enough.

    How do they do it?

    By sticking to few proven ways that let them maintain a positive karma score while remaining efficient. In this article, we’ll guide you through 11 smart management tips on how to lead a team and become something more than a boss – a leader.

    1. Find a Management Strategy and Stick to It

    There’s nothing worse than a boss that keeps changing his or her opinions and assignments depending on their mood or a book they read this week. Chaotic decisions increase the insecurity and frustration of your team, so you better find your strategy and stick to it.

    If you do find some new methods you want your staff to follow, make sure they don’t contradict the general direction you are taking. Otherwise, you risk making your team take one step forward and two steps back.

    2. Set Goals​ and Track Progress in Reaching Them

    Set individual and collective goals​ for your team and track the progress in reaching them. This might sound obvious at first, but too often we find ourselves stuck between daily customer requests and monthly reports, and the bigger goal or vision seems to fade away.

    According to Elon Musk (and many other successful CEOs around the Globe), it’s crucial to have a clear and motivating aim to where the company is heading. His aim for the space transportation company SpaceX is “to make humankind a multi-planetary species”.[1] That’s a huge goal but the company is slowly moving closer to it by reaching smaller steps and milestones, like launching self-landing rockets. This is also a very inspiring and meaningful goal that helps employees endure the company’s extremely high expectations and 60 to 70-hour work weeks.[2]

    Even if your goals are not as grand, setting and reaching milestones will give you a clear insight into the team’s overall efficiency and daily progress. With time, you will be able to see the weak spots and improve your results.​

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    3. Demand Learning from Your Team

    CEO of print on demand startup Printful, Davis Siksnans, believes that:[3]

    “The key for a company going through rapid growth is to empower your employees’ self-development.”

    His company with 500 employees spanning two continents demands a culture of learning and provides all the tools necessary to do it.

    Their idea is –  as the company scales, people have to grow in their positions too, which means that they have to be constantly learning. Siksnans says:

    “We try to hire people for what they might become, but they need to have that drive.“

    Alternatively, you can provide educational courses for your employees or invite informal lecturers to educate and inspire your team. You can also encourage peer-to-peer learning by asking employees to teach their particular experience or skill to co-workers.

    4. Invest in a Pleasant Work Environment

    Studies show that a well-designed office environment can increase your team’s overall performance by as much as 20%. You’ll be surprised to see that even very small interior tweaks that don’t require major investments can improve your workers’ performance.

    Some ideas for a more productive and pleasing work environment:

    • Invest in modern furniture – offer ergonomic chairs, standing desks, and individually arranged workplaces​.
    • Start an in-house library – reading for pleasure just 30 minutes a day is proven to be enough to become more effective at work,[4] improve focus, and deal with problems like depression and anxiety.​
    • Play jazzy office music – rhythmic background music will help workers feel more energetic and enthusiastic while doing everyday tasks.​
    • Set up entertainment or break rooms – being able to relax and have fun at work creates a strong commitment, helps employees relax and clear their minds, and boosts productivity.​
    • Bring in uplifting office decor – it’s been found that art in the workplace can boost productivity,[5] lower stress, and even encourage employees to innovate.​
    • Decorate the office with live plants for freshness and a welcoming feel. Furthermore, plants are found to ensure better air quality and increase workers’ productivity by 15%.[6]

    5. Be Kind and Sincere to Your Team

    Did you know that 50% of employees quit because they dislike working with their manager?[7] In fact, most times when people leave their jobs they actually leave their managers. Being friendly and sincere may not be enough to be a successful manager, but it’s a big part of it.

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    Some ways to show you appreciate and care for your staff:

    • Celebrate the progress and achievements of your employees. And don’t be shy to simply say thanks.​
    • Talk to your employees regularly and really listen to what they have to say. Address their concerns, help them reach their goals and do your best to improve their work and daily life.
    • If you’re having a bad day, don’t pour out your stress and anger on the staff. Instead, try to recharge yourself by appreciating the achievements of your team and setting the next goals.
    • Try not to overload your team with work. Every company has rush periods when it’s okay to have more work than usual. But remember that people cannot work under prolonged pressure and stress.
    • Don’t be selfish – it can be very demotivating to see that the manager only focuses on what you can do for him and doesn’t care about your goals and well-being.​ As the CEO of Xerox Anne M. Mulcahy put it,[8]

      “Employees who believe that management is concerned about them as a whole person — not just an employee — are more productive, more satisfied, more fulfilled.”

    Whenever you are having doubts about your kind attitude, remember – satisfied employees are productive employees which lead to satisfied customers and eventually – success for your company.

    6. Offer Flexible Work Hours

    The traditional Monday to Friday, 9 to 5 job is beginning to slip away. Increasingly more people are working remotely or having flexible work hours, and we can expect this trend to continue. To adapt to these changing habits and remain competitive in the labor market, more employers are offering the chance to choose your own work hours, work from home or even from another city or country.

    Offering flexible hours is a powerful way to inspire your existing staff and give them intrinsic motivation. Why not let your employees choose their preferred working hours while keeping the 8-hour day? For example, night owls are unhappy and unproductive if they have to come to work before 10 AM, while others might prefer to start at 7 and finish earlier.

    You can go even farther and hire remote workers – this way you’ll be able to recruit from a global talent pool and even save money on office expenses like desks, stationery, electricity, etc.[9]

    7. Track Your Team’s Productive Time

    Not monitoring your employees’ progress and efficiency can result in poor performance and slacking. Instead of letting things go with the flow, you should consider installing time-tracking software on your employees’ computers and see who’s doing great and who might need a productivity boost.

    But don’t get it wrong – there’s no need to become big brother and watch every step your employees take. If you use the time-tracker as a spying tool, you will only see increasing suspicion and insecurity around you, and your employees’ happiness levels will drop.

    On the contrary, choose software that allows employees to mark private time that won’t be tracked. In addition, consider these time-management tactics:

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    • Allow flexible work hours. (see Tip No 6)
    • Encourage breaks – studies show that employees who take regular breaks are more productive than those who don’t.[10]
    • Enable remote work to show your employees that you trust them and that they can work from home or even from another country (if they can maintain sufficient productivity).
    • Consider offering bonuses to your most productive employees (those who show productivity levels above 90 or 95%).

    8. Use Only Constructive Criticism

    Constructive criticism means offering valid and rational opinions about the work of others, involving both positive comments and remarks about what should be improved. Constructive criticism is usually expressed in a friendly manner rather than an oppositional one.

    When you evaluate your team’s work, give them feedback that’s helpful, specific, and sincere. Don’t be shy to praise, but also be direct and even strict when necessary.

    9. Don’t Give Special Treatment to Yourself

    The boss’s actions are – directly or indirectly – observed by your team. This means that your employees look up to you and often mimic your attitude towards your work and the company – especially if your actions don’t show commitment. Nobody wants to work for a leader who doesn’t go all in or inspire motivation.

    What you should do is lead by example. If you expect your employees to arrive at work on time and work 8 hours, do the same yourself. If you want them to show initiative, show it yourself and encourage others to do the same.

    Jeff Weiner is the CEO of LinkedIn – a company of 3,000 employees that consistently ranks as one of the best workplaces with a 92 percent employee-approval rating.[11] Weiner’s workdays are reported to be equally long or even longer than those of his employees, allowing him to stay “extremely credible as a leader.”

    10. Empower Your Employees

    Here’s a common mistake many managers make:

    They don’t motivate their staff and assume they simply love to work for their company.​ Such belief can result in painful losses for the company – especially these days when many companies are in desperate need of a reliable workforce.

    Instead of directly thinking about bonuses and perks, consider intrinsic motivation. For example, enable flat organization in your team and listen to your employees’ ideas when they come up with opinions and suggestions. Your company might actually benefit a great deal from the feedback, and the unique ideas employees come up with.

    You can also start an initiative where employees can freely share or pitch their business ideas to you or the founders of the company. If the idea is accepted by the management, the project can be developed, and the employee can have equity options.

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    If people feel they have an impact in the company, they become more motivated, engaged and interested in the company’s growth.

    11. Nurture Your Company Culture

    Company culture is the personality of a company that defines the overall work environment and relationships between teammates. It also includes company mission, values, ethics, and goals.

    Some examples of company cultures are the Horizontal corporate culture (collaborative and equal; popular among startups and free-spirited businesses) and Conventional corporate culture (a more risk-averse and hierarchy-based approach common in traditional companies).

    However, you don’t have to stick to pre-existing boxes when creating your corporate culture. You might think of your team as a family, a sports team, or even a hippie camp if it fits your business and purpose. But keep in mind that by the time a company’s size reaches 20 employees, the company culture is set,[12] and any changes will need to be implemented in smaller teams.

    Whichever personality you choose for your company, make sure to live by it and nurture it. Some things that might help:

    Team building events, relevant books in your office library and proper on-boarding for the new employees to get everyone on the same page from the very beginning.

    Be a Leader, Not a Boss

    Using the words of Printful’s CEO Davis Siksnans, the ultimate goal is to “Hire great people who don’t have to be managed.”

    However, when you do need to demonstrate some initiative and control, act as a leader rather than as a boss.

    In other words, don’t be afraid to show the personality behind your role. And keep these 11 tips close to your heart.

    Featured photo credit: rawpixel via unsplash.com

    Reference

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