“My friends all thought I was some kind of 28-year-old entrepreneur genius. They didn’t know I was panicking every time I looked at my ATM receipt.” - A small business owner said when we asked if they fear going out of business.
The White House acknowledges Small Business Week this year by “honoring America’s entrepreneurs who take a risk on an idea, invest in their neighborhoods and create jobs for others.” America has been built on the back of small businesses and individuals who are willing to take the risks necessary to strike out on their own.
This “strike out on your own” mentality has been a part of the American dream but for every small business or entrepreneur that “makes it”, there are many more that fail. There are even conferences dedicated to failure as a business, which host people like Travis Kalanick (the founder of Uber) to talk about their previous failures.
But where entrepreneurship and sometimes even failure is glorified, as a serial founder, I know that people don’t talk enough about the mental and emotional pain that can come with running your own company.
Proof Factor, a company that creates e-commerce plugins to help small businesses sell more (and that I am a founder of) decided to find out how business owners actually feel. We commissioned a study that asked 610 small business owners in the United States if they’ve ever been fearful of going out of business, and if they have, how they felt and why they thought they would go out of business.
The results were shocking.
31% of entrepreneurs have privately worried that they might go out of business. For context, there are 30 Million small and medium-sized businesses in the US, we estimate that ~10 Million entrepreneurs have privately suffered through this fear.
- The fear of going out of business is real, and, of survey respondents, it disproportionately impacts female entrepreneurs (40%) more than male entrepreneurs (23%).
- Social Pressure can lead to bad decision making, with one entrepreneur saying “I’m Doomed!”
- There are factors outside our control that can impact your business, with our survey respondents saying that a contributing factor is “Wage growth is higher than profit growth” and “Technology has replaced me”.
But all is not lost. As an entrepreneur, there are ways to manage through difficult times of your business, even if you think all is lost:
Talk to your employees - My biggest fear when I had to shut down my 30 person company was that my employees would hate me. In my mind, I had promised them the dream, and now I couldn’t deliver. I had sleepless nights thinking about what would happen once I told them. Once I told them, their reaction was completely opposite of what I expected, they were supportive, had excellent ideas on how we could turn things around and made sure that I got the help I needed to get through the difficult times. Lean on your employees, they are your biggest resource.
Be active about managing your stress - Stress makes it difficult to think through things clearly and can have a negative impact not just on the business decisions that you make, but long term health consequences too. Make sure you’re active with managing that stress - either through exercise, meditation, eating healthy meals and getting enough sleep or any of the other techniques available to you.
Acknowledge your circle of control and focus on that - You can’t control everything, no one can. Figure out the things that you can control, and focus on that. This will help you prioritize the most important items you can do something about, and let go of those that you cannot.
Know when to call it quits - Sometimes there is no winning hand. One of the entrepreneurs we surveyed said that he’d “rather take on debt than have to admit that we went under.” Don’t do that. Part of being a business owner is having to make difficult decisions, deciding to shut down is one of those decisions.
In the words of an entrepreneur, “the deck seems stacked against small business.” But if you decide to take the plunge, make sure to understand the challenges, and know that others are going through the same things as you. Good Luck!