Richard Pierce Thomas

Leadership and Small Business Consultant

The look of panic in his eyes was all too familiar. I had seen it before – not only amongst our clients who are leading growing businesses, but also in my own expression staring back at me in the mirror.               

As I have written about before (SRG, Vol. 18, Issue 205, Earning the Privilege To Be in the Dogfight), I had my own brush with near extinction when my business hit rock bottom, and nothing – and I mean NOTHING, prepared me for the challenge of that ultimate moment of truth when I found myself wondering how I was going to pull the proverbial rabbit out of the hat to keep the doors open.

This is a scenario that is being played out in the U.S. over and over again as multitudes of small businesses wrestle with undercapitalized growth. If this describes your situation then you now realize there are no guarantees and one of the more sobering aspects of this reality is the lack of capital to fund the growth. 

This is especially vexing these days as liquidity in the financial markets is at near historic highs. Coupled with an equally high aversion to risk amongst the lenders, many businesses have found themselves without resources when the business begins to grow. Unless you have a rich and benevolent uncle somewhere in the family tree you can tap into, if you haven’t faced it yet, the moment of truth is coming. This is where my client found himself when I received the call to discuss the crisis.

“I am paralyzed by the fear,” he said as he described how he was feeling. “I lay awake at night wondering what I’m going to do and I can hardly face my employees. I don’t know what I should be doing first.”

While ultimately, everyone has to find their own way through the emotional turmoil, there are some practices I have found that help when one is facing a financial crisis in the business. Following is what I shared:

  1. Write down the worst possible outcomes – It sounds paradoxical, but when we write down our worst fears, they become less omnipotent and more manageable. It allows us to obsess about them less and move to thinking about what we can do.
  2. Action cures all fear – Identifying what you can take action on, even if it is seemingly insignificant, will shift the energy in a positive way. It is here where fighting for every inch in small actionable steps is invaluable. 
  3. Predict the date of your demise – It is entirely counter-intuitive, however, managing the cash down to the day when all the resources are expired does two things, 1) Forces you (if you are not doing so already) to be hands-on managing the cash. I can’t tell you how many business owners are hands-off on the financial oversight, and this is a BIG FAIL. 2) It focuses the attention on the short-term actions that will allow you to live another day rather than avoiding the inevitable.
  4. Fake it ’till you make it – If you have employees in the business, it is imperative you put on your best game face and keep them motivated. Call it, “belief in the absence of proof.” You have to believe enough in the business and keep the team focused on it, in spite of not knowing how you are going to get through it. This is how perseverance is forged.
  5. Remember this feeling – Ultimately, change doesn’t happen without discomfort. We can use the experience to our advantage by remembering just how crappy it felt to face the abyss. While certainly for some that keep it too close and become overly risk averse, remembering how it felt should spur us to do what it takes to make sure we don’t end up here again while also being willing to take future risks, which is necessary for any business.

In next month’s article I’ll cover some of the financial metrics we recommend all businesses utilize to manage the business and ensure they don’t repeatedly risk it all. Until then, take action on what you can today. If nothing else, you just might sleep a little better tonight.

Rick Thomas is a Principal and Director of Human Capital at Pilot Wealth Management, a registered investment advisor in Oregon state. Leading their focus on the human component of building wealth, he consults and speaks to organizations across the country, focusing on individual and organizational achievement.