How to Maintain Control of Your Startup When Things Get Bumpy
The farther you get into your startup journey, the bigger the challenges are likely to become.
You may start to miss your revenue targets. Bills may begin to pile up. Staff members, even those who’ve been with you from the start, may begin to look for other opportunities. It could even reach a point where these concerns start to keep you up at night.
But challenges and obstacles are just part of the reality of entrepreneurship.
As a business leader, the way you face adversity could very well determine your chances of success. If you feel that your startup’s getting caught in the doldrums, it’s important for you to show focus and determination. Giving in to stress and frustration only leads to bad decisions that could eventually sink you.
Take charge and steady the ship.
Here are some key ways you can maintain control over your startup when things get bumpy.
Set boundaries with key stakeholders
During trying times, stakeholders could put undue pressure on you to deliver. Investors, in particular, are the ones who could stress you out the most. Some people tend to clam up and retreat when dealing with such personalities. But for a CEO, silence and avoidance during trying times generally does more harm than good.
Among your key responsibilities is to coordinate and create synergies with all your stakeholders. Surely, disagreements with investors are unavoidable, but you have to understand that they’re mostly out to protect their investments. Some of them may even appear hostile and try to take over. When that happens, be sure to reassert boundaries.
Mark Moses, the CEO of CEO Coaching International, refers to this process as making the rules of engagement clear. He writes, “You have to understand your scope of authority as the CEO. What are you empowered to do and decide, and what is left to the board to decide?” Pick your battles, but stand your ground when necessary.
Once those boundaries have been set, you’ll easily be able to make timely, bold decisions without having to worry about appeasing your investors’ egos. Make them understand that expediency is critical during turbulent periods.
This said, you still have to communicate with them frequently. Investors do love to be informed of the state of your business, and they may also have valuable insight to share with you.
Mind the numbers
As Gary Gaspar points out, finance is another one of the biggest sources of startup stress.
Many of the startup success stories that get shared around have been known to gloss over important financial details. Yet, entrepreneurs worth their salt should know that numbers matter. CEOs who neglect finance by focusing exclusively on other things like product innovation and salesmanship are doomed to fail.
“Most startups don’t fail because they lose money,” writes Acceleration Partners general manager Matt Wool, “The downward spiral starts much sooner, when entrepreneurs let managing their financials fall by the wayside.”
Even if you don’t completely ignore finance, you may be managing it the wrong way. If you only track the finances that you need to report to investors or for taxes, you miss out on the opportunities that modern accounting and unit economics can give you.
Your books can tell you a lot – how much inventory is getting moved, lag times on receiving payments from clients, how much salespeople are spending on collateral materials, whether or not suppliers charge you consistently, and so on.
Knowing these details allows you to intervene rapidly when necessary. You can also create financial projections more easily. By being on top of your finances, you’re able to work towards sustainability and avoid burning through capital unnecessarily.
Streamline your IT for smoother workflows
Given how business has become digital-or-die these days, most startups find themselves investing heavily in technology.
Fortunately, thanks to the growing popularity of SaaS as a distribution model for business applications, enterprise-grade software products are now actually more affordable. You can pay for access on a monthly basis, as opposed to previous licensing models that required you to purchase software upfront.
One drawback to SaaS, however, is that it can lead to a bloated IT infrastructure. If you give your teams and departments some leeway in their budgets, they can actually subscribe to many of these SaaS applications themselves. While empowering staff to choose their own tools for work can boost their productivity, they may also end up making poor software choices.
Staff members may be drawn to all sorts of bells and whistles that applications claim to provide but overlook the strength of the core functionalities that your business needs. You may also end up unnecessarily paying for redundant subscriptions and tools.
Unmanaged SaaS use can create problems. SaaS apps often lack out-of-the-box integrations, contributing to a disjointed workflow across your teams and departments. It’s often disastrous for businesses if teams aren’t working on the same version of information. Since staff members control these subscriptions, data can often get siloed within the applications. You may even lose all the data if employees leave without turning over access to these subscriptions.
Uri Nativ, VP of Engineering at Torii, shares, “SaaS, like traditional software, has its lifecycle. Every SaaS product that is introduced to your organization lives there, and one day might leave it. If you don’t own the SaaS lifecycle, then you don’t manage it. Who are your local admins? What products should be retired? Are your employees utilizing the SaaS offering properly? Which data is being shared?”
Using SaaS management platforms can help you identify all active subscriptions and applications within your network. Knowing this allows you to streamline your IT use and create a more integrated workflow.
Become a better example to your team
Crises often test your character as CEO, whether you’re simply a boss or a true leader.
If you act like “the boss” who sits back and tells others what to do, you might aggravate the situation even more. No one really likes armchair generals. When rallying troops, they have to see you on the field with them.
Show your staff why you’ve earned the title of CEO. Lead by example. Display the skills and expertise that got you where you are. Develop relationships with them. If you’re short-staffed, be prepared to step in and get your hands dirty.
If you’re new to the role, adopt a mindset of confidence. You’re no longer just some manager or a struggling entrepreneur. Think of yourself as a captain of the industry with a team of high performers.
Most importantly, always keep in mind that your staff are people. They too can get tired and frustrated when the pressure mounts. So maintaining a positive attitude can help set the tone across the organization.
As the CEO, your job will continue to evolve, and you will face new challenges as your company grows. It’s important to maintain control and not give in to pressure. Take time to assess the situation and identify the likely stumbling blocks in your own startup journey.
Often, these issues are caused by growing pains, as processes and business areas get tested. By setting roles and boundaries, managing your finances, and simplifying your systems, you can ease the pressure off of yourself and your staff, allowing you to overcome these challenges more capably.
Not all startups focus on creating a paid family leave policy, but they should. OV’s Amanda Walker explains why this benefit is crucial for your workforce.
Stripe serves global organizations, so it’s important that they have teams all over the world to assist their customers in the best way possible. Learn why cookie cutter internationalization sets you up on the path to failure and how Stripe has successfully scaled their organization globally.
How can an effective knowledge management practice help with employee turnover while enhancing productivity and efficiency? Find out what you can do to keep your best people around longer.