In a predictable show of political posturing, a deal was reached in the 11th hour, and crisis averted for the time being. It is, by all means, a small part of what is sure to be a long-term strategy, but the fact that this house of cards holds global financial ramifications is something we must all concern ourselves with. So what should the self-employed entrepreneurial minds take away from all of this?
Today’s latest developments are theoretically a step in the right direction, but that doesn’t necessarily mean that they will work. Really, there’s no point in speculating either way for the sake of sensationalizing what is clearly nothing more than a potential at this point. Either way, the results are going to have an impact on small business people, and really, only time will tell what the future holds for the economy. However, if we take a moment to examine an oversimplification of what’s been going on, we can gain some insights into the long-term health of our small businesses.
Bad Practice #1: Frivolous spending.
It’s easy to spend when it’s not your money. Whether that money comes in the form of taxes, loans, or credit, investing in the growth of any business (especially in the early stages) requires painful discretion. Yes, your business many need supplies; tools, a computer, a vehicle… But part of growing a successful business is recognizing the needs of your business and containing your zeal. Don’t slip into the delusion that your small or home-based business needs the same high-end tools that are required to meet the extreme productivity levels of big business.
When your profits can cover your expenses, then you can buy that shiny new BMW.
Bad Practice #2: Increasing credit limits
Clearly, a business requires funding of some sort to get started, and maybe even to sustain its growth until it becomes self-sufficient. It’s a harsh reality that many in government are just now coming to realize, but many working people already know – repeatedly increasing your debt limits simply leads to more debt.
Unless a shift in innovation accompanies the incredible burden of taking on increased debt, throwing more money at a sinking ship is only going to make the problem get bigger. We all make mistakes, and if our initial startup capital was either not calculated to be enough, or it was blown through by frivolous spending, it may be ok to hit the reset button and require more funding. If it doesn’t work the second time, that’s when it’s time to re-evaluate the business model.
So if the ship begins to sink, how do we save her?
The only way for our businesses to survive (and thrive) is to remain true to the foundations of what it means to be an entrepreneur. Successful entrepreneurs are known for two fundamental traits – innovation and flexibility.
Innovation
Innovation comes in many forms, but for entrepreneurs it is a concept that must be applied across the board. Is your business idea innovative? Is your product or service innovative? Does it solve a problem? Most importantly – Is your vision innovative?
Running a successful small business means wearing a variety of hats, and as every entrepreneur knows, you need more than “something to sell.” Good leadership, foresight, management, marketing, and sound implementation are all part of being an innovative small business – and that’s your biggest key to success.
Flexibility
Entrepreneurs’ ability to be flexible mainly stems from being in the position of having no other choice. We are not in the position to simply throw money around in attempt to solve problems (again, a reason why the debt crisis is far from over), so we must find creative ways to deal with our challenges. There are many outside forces acting upon any business, large or small; but as entrepreneurs we are faced with bearing the burden of dealing with them ourselves. Factors such as changes in tax laws, interest rates, competition, or even personal matters (ie. Having to spring for a new household appliance, getting the car serviced, mowing the lawn…) are all influences that force us to be adaptable in our time management and budgets.
The good thing is, being flexible is a commodity that big businesses cannot afford. There’s too much red tape and regulations, internal policies, and voices in a large company for them to be as flexible as an entrepreneur. This is one power entrepreneurs can leverage, and is your biggest advantage in outpacing your competition.
Looking back to the band-aid fix of raising the debt ceiling and the accompanying spending cuts to follow… Only time will tell, but one thing is for certain – Few entrepreneurs would be able to claw their way out of that kind of hole without the abilities of innovation and adaptability.
Sole-proprietors and small business owners have the ability to steer our moving ship as we choose. So moving forward, think carefully about how your small business can continue to innovate and adapt over the long term. Having a clearly defined vision and the ability to recognize the triggers that caused events such as the debt crisis will put smart entrepreneurs in the best position to come out of this economic climate on top.
Dave Seeram is the Editor in Chief and Publisher of the PhotographyBB Magazine and the new clamorate! Magazine. He started PhotographyBB back in 2006 as an online environment for digital photography and image processing enthusiasts. Dave is also the owner/founder of PhotographyBB’s parent organization, PowerButton Media. Prior to that, Dave came from an extensive working background in retail management, and educational studies in applied mathematics at Simon Fraser University followed by graphic design at the British Columbia Institute of Technology (BCIT). Dave’s passion for entrepreneurship coupled with design, drives him to assist other creative individuals who seek out the life of the self-employed.
This posting couldn’t have come at a better time! Great information to apply to my photo biz
Thanks for the comment Cliff, glad to hear that it was helpful to your business in some way. Here’s to navigating through financial storms!
Here we see an example of “glass half full” philosophy, thanks Dave for your perspective which is from where rubber hits the road – so to speak. I wonder if I missed these two fundamental traits in the venture that failed? There must be a longer list of basic qualities, which address some pretty valuable and key elements.