From start-up to exit – the life of a business Summing up 2014 –Part IV

“The future is still under construction” – Ikutaro Kakehashi

Are you where you should be?

          And if you are not exactly where you planned, is that such a bad thing? You failed and you didn’t reach your goals, be it intermediate or final. Failure is an option and you should star your journey knowing that sooner or later you will fail. Big failures stop your project, smaller one delay your advance, but both can be good for your future as long as you are able to manage your failures and make them a good experience.

Growing up I heard a lot of times from my parents, teachers and especially my basketball coach “failure is not an option”. These words can have a very negative effect on a person because if you start believing this, the first time you fail your world will shatter and fall. And you need to fail as much as you need to get sick with measles as a kid to develop antibodies for it.

Managing your failures the right way represents half of your future success. And the first step in managing your failures is to always start a new project expecting at some point to fail. The chance of that happening is there so you might as well incorporate the idea in your mental plan. We have to stay realistic at any given time so if you believe everything will go exactly as planned with no surprises is just like betting on the weather forecast for next month. Believe in your idea and start your project even in the presence of the risk of failure and you can use that to your advantage, fear of failure can make you become better because you pay more attention to details.

At some moment, as we agreed, failure becomes more than just an option but a reality and how you respond in that moment is crucial for you and your partners. You have to remember, first of all, to stay calm. Throwing blame and raising your voice is never a good solution. So just take a moment to relax and analyze what happen before taking any decision. Most of the time, reacting impulsively is going to make everything worse. After calming down try and get feedback and find out what went wrong, not only from your point of view but also from your partners. Listening to other opinions can always give you a clearer picture of the situation you have in front of you.

Lately I find that I like a new inspirational quote – “I learned so much from my mistakes that I think I am going to do some more”. As long as you can see the positive aspect in your failures and they make you into a better version of yourself, you shouldn’t fear them. I am not saying that you should start inviting failure into your activity and your life. But you should change a little your perception about them and understand that it might rain exactly on the day you go to the beach but the sun will shine again and there is always another chance.

But understanding you failed is only half of the work. You also need to change something or else expect another failure. My favorite definition of insanity states that you are insane if you do it the same every time and expect different results. And I am sure you are not insane. The tough part here is to manage the changes, even if you are doing something the wrong way, it is a way you know and are comfortable with. So change is something bad in your eyes.

Fear of change makes you delve in mediocrity. I remember in the days I in sales in the construction materials industry, offering specialized and innovative solutions to constructors, the main problem was not always the fact that my products were the most expensive. It was actually this type of attitude: “we have a solution for this, we use it for 20 years now and it works’. Sometimes I didn’t even have the chance to bring arguments into the discussion, the people in front of me were so reluctant to change that they became defensive and close all talks after just our hellos. But in the end, change is a natural event, in nature, life or business you have to adapt, “it’s easiest to ride a horse in the direction it is going” so learn to manage and use the change in your advantage.

Moving from point A to point B in your change process (where A is Current State and B Future State) can be more successful following the five key goals of the ADKAR® model:

Awareness of the need for change. You have to be sure you need change, don’t change for change sake. You have to ask those questions in order to be 100% aware of the need to change. After you become aware of the real need for change you will also be more open to change and accept it easier.

Desire to participate and support the change. Desire to participate is conditioned by the expected outcome, that has to be beneficial. In the business area change will bring better profits, improved communication or happier clients and I believe these are good reason to stimulate desire. Sometimes negative consequences prove to be a better motivation factor, because we respond better to threats and perils. But in both case, positive or negative, the consequences have to be great enough in order to overcome resistance to change.

Knowledge on how to change. If there is need and desire you also have to know how to change. This is an important moment because we don’t always have the knowledge to change so we should all be honest to each other and ask for help from someone that already did that a couple of times. If you want to change your diet ask a nutritionist or doctor. In the case of your business, unless you have experience in writing code, don’t build your own website. The alternative to asking for help is giving you time to learn the required skills for the change. Attend training programs which have as subject developing the skills you require.

Ability to implement the required skills and behaviors. This is the part where you transform need, desire and knowledge into a habit. If this ability lacks you need to do it step by step. Sometimes at this stage outside support is required, coaching or mentoring session might help you accept change easier.

Reinforcement to sustain the change. In the beginning change is accepted easier due to enthusiasm and excitement. Imagine when you first started going to the gym, it was a great feeling, but after a while you started looking for reasons to procrastinate. A new strategy in sales for example will not bring the desired results as quick as you might want them or the social media approach might not double the number of visitors in the first month on your web site and this could be frustrating. You just have to remind yourself and all those involved the rewards waiting at the finish line. Go through the process and look at the big picture not just at different stages on the way.

Change is not easy; it is not comfortable and can sometimes bring a lot of hardship but as long you have decided it is beneficial you have no other option but to do it. And as long as you change for the good reason, have a plan and the guidelines to implement it you are already half way there.

There is life after business.

          Relax, nothing is under control. You don’t have your business anymore, after an exit strategy you find yourself with a lot of free time. The change you needed required that you get out of the business. Enjoy!

            Sometimes the best thing you can do is to let go. And it is not only a selfish decision; it is the best thing for everyone involved. Nothing lasts forever and it is better to have a plan and be prepared for the moment than be surprised. And exit doesn’t mean you ruined your business and all is over. Sometimes it can also mean you took it this far and now is time to cash in and enjoy a new challenge. And keep in mind that if you lose the window for a profitable exit, the other side of the coin could be bankruptcy. Planning your exit can also act as a powerful motivator, you know why you work so hard and what is waiting at the finish line. The plan you make is also a great map from point A (Great I am an entrepreneur now) to point B (I worked so hard I need out). It is easier to find your way as long as you know the destination. The exit strategy you envisioned may not happen like that but as long as you are prepared you will exit victorious.

            Exit strategies are at your disposal, be it M&A, Friendly Sale, liquidation & sale, IPO or a lifestyle company, remember that this is a good thing. You can focus now on all those projects you neglected. On family and so on. Take some time for yourself before starting a new challenge.

            I asked my friend, Dragos Roua (http://www.dragosroua.com), being an entrepreneur that experienced a successful exit, how did he reach the conclusion that an exit was the best idea. He told me this: “For me, deciding the exit was almost obvious: the moment I realized I was trying more to escape my own business than to build it, I knew that wasn’t my playground anymore. The rest were technicalities.”  His answer should serve as a lesson to all entrepreneurs facing the Hamlet situation: to be or not to be. Yes it is your baby, your business and you have so much of yourself in there. But at the same time, you will know exactly when the time to let go and go play somewhere else has arrived. Start with the end in your mind, and work hard to make that end remarkable.