I’m a third-generation entrepreneur and have launched and sold multiple businesses. I’m also a CPA who regularly advises business owners on their finances and business operations. Over the years, I’ve seen how excessive stress affects entrepreneurs, myself included. Without a plan to manage and reduce stress, it’s all too easy to slip into a cycle of unhealthy living, poor decision making and unrealistic expectations for your business and life.
The good news is that many stressors are avoidable or can be reduced with the right mindset, realistic expectations and proper planning. I recently shared my insights on this in Entrepreneur, but here are a few more things I’ve learned along the way:
Plan for the first 18 months to be hard
Starting and running a business often requires learning how to pace yourself. Just like anything you begin it’s important to know and prepare for the first 18 months of your new venture to require more work. This is true for many things you begin in life such as learning a new language or starting a corporate job. So expect and plan for this. Set goals for what you need to accomplish in the first 18 months of your new business. But also set goals for after this intensive period for how you plan to live a more balanced life. For these goals, make it a priority to hire people or get outside help to reduce your workload and focus on the parts of the business that you enjoy most.
When I started my own accounting practice, I was unable to hire part-time or full-time employees. But as I got my business running, I was working 24/7. It was unsustainable and hard on me and my young family. I also started to experience the law of diminishing returns in which the extra work I was doing was not creating a better outcome. I took a small step to free myself from this cycle and lighten my workload by hiring a virtual office assistant to take calls. This helped me better manage my time, focus on what was most important and led me to hire more outside experts.
Don’t finance your business with your house
It’s hard enough to start and run a business without the added worry that you might lose your house. I advise people to only finance their business using their house if they’ve been in business for a long time and are confident that they can repay it. Unfortunately, I’ve seen too many entrepreneurs get into financial trouble doing this. It also warps their decision making processes. They work from a place of fear of losing their personal assets, not from a place of following a business strategy.
I had a client years back -- a husband and wife team -- who owned a small business. They began financing their business by mortgaging their home. The wife left her corporate job and she invested this money into the business as well. Their plan was to sell the business to fund their retirement. When there was an unavoidable decline in the economy and their industry, their business struggled. They found themselves concerned that they wouldn’t be able to repay the money that they used from their personal assets to start the business. They started to make rapid fire decisions in order to save the company, which did not achieve their business goals. If they had not utilized personal assets, they may have been able to step back with a clearer head to make better decisions on how to save the business.
Set 3 to 5 strategic goals every year
It’s easy to try working 24/7 as an entrepreneur but it’s impossible to maintain. I know. When I started my own accounting practice, I never said no, I never took a vacation, I never set boundaries because I believed that the next phone call or contact I made would be the silver bullet to make my business an overnight success. So I worked myself to the bone and burned myself out. After that experience, I became disciplined about setting 3 to 5 strategic goals every year. Before doing anything or saying yes to a request, I would always ask myself if the activity aligned with one of my goals. If it didn’t, I did not embark on the activity. This approach helped not only me, but my staff, work on the things that mattered most and as a result my practice started to gain momentum.
To be an entrepreneur always requires hard work and the ability to stomach a certain level of risk. But by following these tips you’ll be able to steer clear of some of the key causes of stress among entrepreneurs and create a healthier work life balance.
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