Dealing with Pain Points: Tips for Innovators & Entrepreneurs
Tuesday, February 12, 2019
Sometime innovators and entrepreneurs get swept up in excitement for their own ideas and expect that once they start moving ahead, it will be a straight-line to success. In such cases, unexpected but ordinary challenges can feel like insurmountable obstacles. More often than not, there are hurdles along the way to successful commercialization of a new product, technology or service; and it is helpful to be prepared for them ahead of time. It is important for innovators to recognize there are often pain points along the path to commercial success during start-up and growth phases: some are ordinary problems to be dealt with and others are red flags that something requires serious attention. Being prepared to mitigate and deal with problems can help prevent red flag scenarios or facilitate recovery from them.
Common pain points:
Temporary lack of cash to purchase equipment, hire employees, market the business, or even cover existing accounts payable is a very common struggle, especially for start-ups that might have difficulty acquiring commercial financing due to lack of sales.
Many innovators experience uncertainty knowing when to bring on a new employee, how to define a job and set high but realistic expectations, where to find the right person, how to hold employees accountable without micro-managing them and when to fire someone for inadequate performance. This can be even more complicated in cases of family-owned businesses.
Working long hours and even multiple jobs is not uncommon for innovators. It can be difficult to know which tasks to prioritize, how to set time limits and deadlines, and when to ask for help.
While developing a new product or technology, getting a new business off the ground or an existing business into a growth phase, entrepreneurs don’t always have enough time to spend with family and friends; and this can cause tension outside of work.
Failures and Doubts
Setbacks in developing a product or technology, or lack of initial market interest, can trigger lack of confidence about the worth of the innovation or the innovator’s capability to move forward with the idea.
Pain points can be difficult to get through; but while they present challenges to be dealt with, they are not necessarily signs that the idea cannot be successfully commercialized. There are, however, some red flags that things might need serious attention.
Lack of Financial Management
When no one is properly managing the finances, paying attention to cost structure and pricing, when there is no feasible plan for controlling cash flow, the business might be in danger of running out of money rather than going through a temporary lack of cash flow.
Lack of Engagement in Planning
When the owner isn’t staying engaged in business planning on an on-going basis but is just churning through tasks, or when the owner is indecisive and puts off decision-making, the business might be in danger of stalling due to lack of direction.
Poor Employee Management and Company Culture
When employees are overworked and/or micromanaged, performance expectations are lacking or are unrealistically high, tensions and pressures create a negative atmosphere, or poor compensation structure is in place, the business might be in danger of inconsistent performance and inability to retain valuable employees.
When the owner/management lacks flexibility, doesn’t listen to the support system that is in place or is not coachable, the business might be in danger of getting stuck with an idea or processes that won’t make it through to successful commercialization. This might happen, for example, when the owner is passionate but not realistic about the innovation.
Lack of Due Diligence
When a company is dependent on others to perform key tasks and does not go through a proper vetting process or make sure that appropriate contracts are in place, it may be at risk of failure due to the others’ failure to perform.
Strategies for Planning and Coping
- Don’t wait until you are out of cash or the sky is falling to ask for guidance about managing the business. Ask for real help from people you trust and whose opinions you value.
- Make purchases carefully. Think of them as investments in the business.
- Be creative during cash crunches (e.g., find creative solutions in working with vendors).
- Don’t make rash business decisions under pressure. Take a walk, take a break, think things through over a period of time.
- Plan ahead for the need to reevaluate your value proposition and best customer base.
- Understand that the right team isn’t necessarily people who always agree with you. Figure out what you really need in a team in terms of experience, knowledge, skills, aptitudes, attitudes, etc. Find people whose strengths complement yours.
- Get input from employees, customers, mentors, and/or reliable support resources.
- Network and build relationships with people you admire and with people with which you potentially see future overlap.
- Pivot when needed.
- Diversify revenue streams.
- Don’t think that you need to keep going at all costs.
- Learn what you can from your failures, adjust, pick up, keep going. “Failure is simply the opportunity to begin again, this time more intelligently.”-Henry Ford
- Utilize good resources. Places to go for business support include your SBDC office, banker, accountant, attorney, mentor, and other entrepreneurs.
At the Kansas SBDC, we recognize the challenges faced by innovators along the way to commercialization and want to help them be successful and avoid costly missteps. Our advising services include cash flow and financial analysis, access to capital, management, market research, growth strategies and general business planning for both preventure and existing businesses.
Laurie Pieper, Ph.D.
Washburn University SBDC
America’s SBDC Kansas