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August 1, 2022
As a business owner, the best mantra for navigating through a downturn may be to “shift your perspective.” Seasoned entrepreneurs who’ve persevered through economic turbulence, as well as an array of studies, advise that adopting certain aspects of the entrepreneurial mindset can help business leaders drive success amid uncertainty.
By mastering a few adjustments to mimic the mindset shifts of entrepreneurs who have prevailed in a downturn, your business will be better poised to get through rocky times. Below we delve into six attributes that successful entrepreneurs embrace to navigate a serious downturn.
Start by acknowledging that your mindset can make or break your business in times of crisis. Like all entrepreneurs, you may need to process Dr. Elisabeth Kubler-Ross’ five stages of grief — denial, anger, bargaining, depression and acceptance — to confront the new reality.
“Once you realize that your psychology and the mastery of your mind may be the most important thing you can bring to the table, the fog lifts,” writes angel investor and NFX founding partner James Currier. In turn, this clarity of thought will foster trust among stakeholders, such as your customers, employees, investors and vendors.
To maintain control of your mindset during tough times, seek counsel from those whom you care about the most, Currier adds.
Risk-taking is one of the most powerful attributes shared by entrepreneurs. Similarly, business leaders who are willing to take bold risks are better positioned to find their way out of a crisis by taking a road less traveled. And if you can take the risk of redirecting your mindset from one focused on winning to one that focuses on persistence, an attribute Franklin Templeton CEO Jenny Johnson describes as one of the four essential qualities of great leaders, you can master survival when things aren’t going your way.
“[Risk-taking] is an incredible quality I see in many entrepreneurs,” writes EY Global Entrepreneurship Leader Stasia Mitchell. “Whether it’s taking the risk to step into a new market, or making a decision to put purpose above profit, they are able to keep pressing forward and see disruption as an opportunity to grow.”
Even the steadiest employees are likely to be unsettled when your company is grappling with stressful circumstances. To mitigate their concerns, keep purpose top of mind. No matter how tough the situation, employees should come to the workplace re-committing to this purpose, with you modeling its importance. If you take the lead with zeal, they will follow.
“Some founders hesitate to be honest with employees because they fear that people will quit,” writes venture capitalist Andreas Goeldi of btov Partners. “In my experience, quite the opposite is true: The best employees, the ones you want at your side to get through this downturn, are exactly the ones who appreciate being treated like adults, being trusted with the truth.”
Your business’s success rides largely on its capacity for innovation, which goes hand in hand with one of the critical traits we previously mentioned: risk-taking. After all, the most innovative ideas are most apt to strike when you are pushed beyond your comfort level.
When times are good and the market is at its peak, it’s natural to stick to the status quo. But when an economic slump sets in, business leaders must think outside the box. Great entrepreneurs take advantage of a crisis to reorient their business, look at problems from a new perspective and come up with unconventional strategies.
The entrepreneurial journey typically entails rejection, struggle, failure and disappointment. These setbacks require a thick skin and force founders to pick up their bootstraps and find a way to keep going. This illustrates the importance of resilience. When a downturn strikes, confidence may ebb and imposter syndrome could set in. But to withstand an increasingly unpredictable future, resilience should be imbued into the way you work.
In a multiyear study that looked at first-time entrepreneurs before they started their businesses, then followed their performance for two years afterward, researchers Jana Raver and Ingrid Chadwick found that resilience dramatically improved the odds of an entrepreneur’s business survival.
Entrepreneurs have a knack for seeing into the future that serves them particularly well in a downturn. Their capability to think big and have a vision helps them grow in the long run. But this ability to envision how your solution can solve a problem may not be obvious to naysayers until it comes to fruition, which can be alienating.
“If you have this gift of being a visionary, it’s more important than ever to tune it in, keep it alive and stay focused, because you are our survival,” Beverly Hills Publishing CEO Andrea Albright writes in Entrepreneur. “Without the visionaries of the world, we won’t make it out.”
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