This month, we conclude our series on the top five business challenges in running our business. If you’ve missed any of the previous articles, you can click on any of the three previous challenges below to read the details:
- Cash flow issues/Undercapitalization of your business
- No investment in a proven pipeline for new business
- Shallow dialogue with our clients
- Lack of differentiation in the marketplace
- Fear or reluctance to take risks or try new things
Fear is a major hindrance, not only in business but also in all aspects of life – in your professional career, in sports, in raising your family and in your faith. Although fear has a negative connotation associated with it, we must recognize that fear is a necessary part of life. In fact, fear is one of the major contributors to progress and development in our world today. The fear of dark and wild made fire important, the fear of invasion led to building of Great Wall of China and the fear of death and misery helped in making medical advancements. With this in mind, it is the way we react to fear that makes the difference – it can hinder us or it can trigger success and victory.
Fear often prevents us from taking risks or from trying new things. By our nature, we like to do what we’re comfortable with. If you’re an accountant like us, it’s worse as our tendency is to be super conservative, often hesitating to take risks. Here are some of the top fears we had to deal with over the years in our business and some we continue to struggle with:
- Not going all in: Five years ago we started this business with three partners – one working full-time in the business while the other two partners maintained their day jobs and worked part-time in the business. Although this had its benefits as we kept most of the cash flow from the business reinvested in the business, it hindered growth as there was less commitment to focus on client service, business development and other aspects of the business. Today, the two partners left in the business work full-time in the business and with a stronger commitment in the business, we’ve seen more growth in the last year than we’ve seen in the previous four years. Taking a calculated risk to commit yourself 100% to your business can pay off big time.
- Not finding funding: In the first article of this series we discussed the challenges we had with cash flow. We know that poor planning with cash flow is one reason why many businesses fail so early. On the other hand, one of the key reasons many people don’t even get started in business or invest in growing an existing business is because they can’t get the necessary capital to start. Early on, we were lucky to get a business line of credit to finance our operations. However, when we wanted to hire new employees we needed some more operational capital but our bank declined our request for increase in our credit line. This did not stop us from hiring even though at the time, we were not sure if we will have sufficient cash flow to pay salaries. Today, we’re dealing with similar challenges. We’ve recently bought a new office unit and will be hiring an additional employee even though the bank again refused our request to increase our credit line to fund the additional our operational costs. In making this decision, we’ve not allowed the fear of how we will deal with the additional expenses in the future hinder what we consider to be the right business decision for our firm. Even if you don’t have the necessary capital at first, you’ll soon learn that a slow and steady process of building your business may be the best thing for you rather than inaction.
- Not attracting customers: With the proliferation of accounting and tax services all around us when we started the business five years ago, we were initially terrified of taking the risks of starting this business and wondered if anyone will value our skills and service offering. If we lived in this fear, we would never have started. What we’ve learned over the years is that as we approached our business with joy and consistently delivered what we promised, we’ve undoubtedly experienced the joy of serving more and more clients who value our services and happily refer other customers to us. So don’t let this fear hinder you, instead focus on your marketing plan, on increasing your level of expertise and on consistently delivering on your service to your clients.
- Not earning enough to recover the investment in the business: Don’t quit because you don’t see an immediate return on your investment. If we wanted an immediate return, we will be out of business by now. In fact, after 5 years, if I calculate my return on investment, it will be minimal at best. I probably would have been better off investing in mutual funds. In business, you need to have a long-term perspective and this should keep you working even when you don’t see an immediate return. For some, it may take 5 years or less. For others, it may be 20 years or more. No matter how long it takes, stay focused and keep working!
- Not trying new services, new ideas and new markets: Our market is changing rapidly, particularly with the changes in technology and client expectations. As a result of this, agility is highly required to succeed in today’s market. As accountants, we are particularly vulnerable to the fear of trying a new service, new technology or going to a new market. It is easy to stay stuck in doing what we’ve always done even when the world around us is changing at a rapid pace. As a firm, we have committed to keep trying new ways to serve our clients including offering new services and trying new technology that will enhance service delivery.
As a business owner, you must recognize that risk is all around us. In fact, life is a series of calculated risk. Everything you decide to do has a margin of risk so be bold and face your fears head on. John F. Kennedy said it best when he said and I quote “There are risks and costs to action. But they are far less than the long range risks of comfortable inaction.”
I hope you have found this series on the top five business challenges we faced helpful. We encourage you to apply some of the lessons as you run and build your business. If you have any comments or questions, don’t hesitate to let us know. Best of luck!