Life is a continuum – so change is inevitable. In the life of a female entrepreneur, then, this inevitability affects her not only personally, but also professionally. While some change results in higher profits and greater personal and professional satisfaction, other change may result in a situation that drains a business owner’s resources and leaves her feeling unsure about the best next step for her business and for herself. This shift also may result in another shift: a previously content and confident business owner, living as her ideal entrepreneurial type, transforms into an entrepreneurial type that simply doesn’t fit.
Based on professional market research of more than 3,500 women in business, this study shows that each type of business owner has a unique approach to running a business and therefore each one has a unique combination of needs. When a woman is living as her ideal entrepreneurial type, she feels satisfied, personally and professionally. This article outlines three of the main circumstances that may cause a woman previously living as her ideal type to transform into a less-than-ideal type – and provides advice for changing these circumstances so they can work their way back to ideal.
- The business started undercapitalized and acquired more debt than can comfortably be carried given current revenue levels. One reason companies acquire debt in the early years is that, although the entrepreneur had some money set aside, their business did not hit its revenue projections on time. The result: the cash ran out before the revenue kicked in. Some women who fall into this category are savvy businesswomen who had previously run large corporate budgets, and were confident and accurate in determining the costs of running the business. However, when they projected how quickly sales would occur and money would come in, they were overly optimistic. They struggle to add more customers, watching their cash reserve run out, ultimately having to decide whether or not to go into (more) debt to keep the business afloat. Many of them end up making that investment because they have hopes for the business and they feel confident it will be profitable eventually.
Advice: Business owners must look at two aspects of the business financials right away to assess whether or not their business model is going to be profitable enough to help them transform back into their ideal entrepreneurial type. She should ask herself: Is it possible to make enough money with the existing model, and if so, what should she focus on immediately to create the best possible chance for the business to survive and thrive?
Entrepreneurs need to assess how much money they can realistically expect to come in, and how much is realistically going out. Revenue and expenses, when viewed together, paint a vivid picture of how successful the business will be. If an entrepreneur discovers that by the time her expenses go out (mortgage/rent, phone, Internet, groceries, doctor’s visits, etc.), she is barely squeaking by, she can manipulate her business model to increase her income. Whether she increases her hourly rates or increases the number of billable hours she works each week, she can create concrete plans for increasing her income – using real, solid numbers.
- Fluctuating business environments drove the profitability out of the business, and the business owner finds herself struggling with cash flow, revenues and/or business cost challenges. For example, a brilliant and successful entrepreneur who established a niche in marketing specialty products grew her business successfully until “me too” companies started chipping away at her market share. Increasing competition took away some of her business.
Advice: If a business owner believes that something outside of her control has caused her to shift into a less-than-ideal entrepreneurial type, she must adapt accordingly – while focusing on cash flow, and possibly reinvesting in the business to give it the jumpstart it needs. To accomplish all this, she must set goals and then create specific, step-by-step action plans for achieving each goal.
This owner of the specialty products marketing company began marketing existing products to new niche markets, and started diversifying into other fields via new divisions that were related to the initial niche. Entrepreneurs should keep in mind that momentum will build as they begin to achieve their goals. The key is to prepare to act by choosing the right focal points and then succeed in those specific areas.
- The business owner is moving in too many directions at once. In some cases, a female entrepreneur has been successfully running her business for some time, and she decides to branch out. Her ultimate vision encompasses multiple streams of income and she tries to activate them all at once. This approach can be counterproductive in the short-term because the lack of a singular focus can make it difficult for her target market to understand her business model. In cases such as these, it is not possible to build marketing and sales efforts for such diverse income streams simultaneously.
Advice: Every entrepreneur, especially one who is struggling because she is not living as her ideal type, should examine her business concept, and her business model to ensure that her company in its current state can make the profit she needs. This will help her nail down a specific focus for getting back into her ideal type. When considering business concept, entrepreneurs may want to develop a one-sentence “catch phrase” to respond when someone asks, “What does your business do for people?” The key is to highlight a singular line of work, plus exactly what benefits customers can expect from using the business. For example, a business coach may say, “In my business, we’re experts at helping business leaders be more effective, so they can make more money with less stress.” In this statement, she has said who she helps (it’s deliberately open-ended to include a variety of business leaders), and what she does for them (helps them make more money with less stress). When considering business model, entrepreneurs must determine whether their customers would want to buy their product or service in the form in which they’re selling it. Maybe a business was running smoothly for years with the same business concept and business model – but with changes in the economy, it is not as profitable. In cases like this, a business owner can assess whether she could make focused minor or moderate changes to her business model to offer her services or products in a way that makes sense, now.
Change happens, always. The way a woman business owner reacts and adapts to change defines whether her company will simply survive or begin to thrive. By following the above advice during three common sets of circumstances, female entrepreneurs will hold the power they need to live their ideal type – and to find personal and professional satisfaction.
Michele DeKinder-Smith is the founder of Jane out of the Box, an online resource dedicated to the women entrepreneur community. Discover more incredibly useful information for running a small business by taking the FREE Jane Types Assessment at Jane out of the Box. Offering networking and marketing opportunities, key resources and mentorship from successful women in business, Jane Out of the Box is online at www.janeoutofthebox.com.