Business News Daily | February 2016 | By Nicole Fallon Taylor, Business News Daily Assistant Editor
Plummeting sales. PR disasters. Piling debts. Lawsuits. Layoffs. These are just a few of the many potential tough situations an entrepreneur might face — and that's just on the business side. Illness, family deaths, relationship issues and other personal problems can weigh heavily on a business owner's mind and make it really difficult to carry on with day-to-day operations.
You may not have faced a significant hardship while running your business yet, or perhaps you've made it through one (or more) and wish you'd handled things differently. Either way, it pays to be prepared. Here are six steps you can take to soften the blow if — or, more likely, when — you find yourself facing tough times.
Build up your confidence
Difficult situations will undoubtedly shake your confidence as an entrepreneur, so it's important to have a strong reserve of it to begin with. Bill Redfern, founder and CEO of Global Franchise Opportunities, credits his ability to deal with tough circumstances to his strong belief in himself and his own abilities.
"As businesspeople, we face many challenges each year, and sometimes, day-to-day work can make things seem rather bleak," Redfern said. "I have found that having a high level of confidence during tough situations helps to find a creative solution to the issues or challenges at hand. Entrepreneurs sometimes do [their] best work when under this sort of pressure."
Create a strong support network
When you've fallen on hard times, it's easy to let yourself become weighed down with negative thoughts. Erik Wilson, founder and CEO of Pozify, urged fellow entrepreneurs not to let this happen. One way to pull yourself out of a negative mind-set is to connect with people who push you to be your best, most confident self.
"Surround yourself with people who want to be with you and who help you stay accountable, authentic, honest, happy and open-minded," Wilson said. "Seek people who push you to constantly keep growing and evolving."
Find a great attorney
Even the most diligent business owners might find themselves on the receiving end of a lawsuit, which can wreak havoc on their finances and their reputation. Trying to find a lawyer during this time can add to an already-stressful situation, so it's best to be prepared by building a relationship with a trusted legal adviser — before you actually need one.
Ryan Blair, CEO and co-founder of ViSalus and international best-selling author of "Nothing to Lose, Everything to Gain: How I Went From Gang Member to Multimillionaire Entrepreneur" (Portfolio, 2013), learned this lesson as he suffered through lawsuits with his business. He advised all entrepreneurs to find room in their budget to invest in the best lawyer they can afford.
"You can never, ever hire too good of a lawyer," Blair told Business News Daily. "If you need a litigator, you hire the best litigator. If you need a securities attorney, you hire the best securities attorney. You'll never look back at your life, saying you hired too powerful or too good an attorney. You'll only wish you'd hired that attorney sooner."
Create a "rainy day" fund
You might have an emergency savings account for your personal funds, but do you have one for your business? Financial hardships are fairly common among small businesses, especially when they're just starting out, so as soon as it's feasible for you, start setting some of your income aside to cover any unexpected expenses or a dip in sales.
"It is always a good idea to have enough financial capital to sustain yourself during … slow months or unexpected emergencies," said Roger Murphy, president and CEO of Murphy Business & Financial Corp. "You'd be surprised at how many tough times can pop up if you're not prepared."
Know yourself well
Ancient Greek philosophers spawned the now-famous adage, "Know thyself," and it still holds true today, especially in the world of business. Wilson noted that entrepreneurs need to know how to self-reflect and understand their strengths, weaknesses, motivations and behaviors. Introspection helped Wilson through recent personal losses, financial troubles and startup woes, he said, and he believes it will be key to helping him deal with any hardships ahead. "The real answer to dealing with any hardship [has] to come from within,” Wilson said. “Understand yourself … and then explore within to find any ‘blind spots’ that [may be] affecting your reality and your outcomes. Once you start getting in touch with this more, you can be aware of how you personally need to handle hardships, and [be prepared] to deal with these in a more empowering way."
Learn to compartmentalize
In the midst of a personal or business crisis, many entrepreneurs let their emotions spill over from one side to the other. Blair said this "emotional attachment" to certain issues doesn't do you any favors — instead, you need to practice isolating each problem and dealing with it head-on, one at a time.
"Emotionally attached … people blow up their businesses when their marriages fail, or they quit working when things don't go their way," Blair said. "The only way to survive the constant battle tests is to compartmentalize your life, and adopt an 'at war' mind-set. [This] means that you don't waste time dwelling on the 'why' and 'how.' You have to fight. If you're unable to isolate issues, or you spend all your energy fighting with the wrong mind-set, then you might not have a business for very long."
If you're in the middle of a difficult financial or personal situation right now, it can be a struggle just to get out of bed in the morning, let alone keep your business running. Our sources shared their best advice for persevering and making it through.
Keep pushing forward. "No matter how crazy you may seem to some or how many people tell you 'no,' or how little support you may have both emotionally and financially, you have to keep pushing forward. If you are truly passionate about what you are doing, then none of the negatives will be able to have any major effect on you." – Erik Wilson
Look for the silver lining. "Stay positive through the hard times. Every business owner will face countless challenges, and those challenges may very well be what changes you and your business for the better in the long run." – Roger Murphy
Believe in yourself above all else. "You can rely on a great team, family or whoever else you look to as a support network, but at the end of the day, you have to be the responsible party and the decision maker. Tough decisions are never easy and rarely popular. Believing in yourself will help pull you through until you turn things around." – Bill Redfern
Draw strength from what weakens you. "When you experience pain, your tolerance goes up, and you only learn survival skills by surviving. In other words, suffering is the greatest teacher. So, get comfortable with your failures and crises. Adversity is not only inevitable, but necessary. Don't be afraid to hit bottom, because this is the strongest foundation to build an empire on." – Ryan Blair