Running a company is one of the most fulfilling and yet hardest jobs you can have. The life of an entrepreneur is not always one of joy and unbounded enthusiasm.
It is great to feel like you have full control of your own destiny when you are building a business, until you start to see some signs that your startup may be dying. A slower than anticipated sales cycle, an unforeseen competitor, investors that won’t bridge you, the list goes on and on.
There is no magic bullet for this situation, and I am not going to pretend that three thousand words can possibly solve your particular circumstances. Instead, I want to focus on strategies that you can employ that can keep your emotional state healthy and may also keep your business afloat.
Here are the top seven things you should do when your startup is running out of money:
- Don’t Lose Track of Success
Just because your business has run into difficulties doesn’t mean it’s a failure. Take some time and review all the successes that you and the company have achieved since startup. Actually sit down and make a list of these accomplishments. Have you launched a product? Garnered any awards? The list of milestones could be much larger than you think.
- Don’t Panic
First, you should explore whether or not the underlying business issue can be fixed before you run out of money. This could be an opportunity to evolve the business to be self-sustaining or attract more interest. Assuming you did this and came up empty handed, it’s easy to feel like the business is crashing. You only have a couple weeks of runway left and employees depending on you. Do Not Panic. This will not help and can lead to irrational actions.
In the grand scheme of things, you are already doing better than most of the population in getting your idea off the ground and into reality. You will survive this.
- Control what you can.
In any business or personal circumstance, there are elements that remain under your control. Identify what these are. Once you have a list of items that you can control, spend some time focusing on these. Often, these will be small and mundane in nature: aggressively collecting receivables, managing communication with your direct reports, etc.
It may seem trite or even nonsensical, but this strategy can ease your burden. Right now, a large component of your stress is related to your inability to control the situation. By focusing on elements that you can control, you bring a measure of comfort and self-reliance back into your life. Believe me, your psyche will benefit.
- Cut off your costs
When you first realize that you are in trouble, it’s time to do some analysis. To begin with, you’ve got to honestly figure out how much time you have left if conditions don’t improve. Otherwise, if you can cut off your expense load, you will absolutely extend the life of your company and that time might prove the difference between success and failure.
- Re-evaluate your idea.
Is it a good one? Do you have proof that it will grow? Why do you want to be an entrepreneur? You have to do a lot of soul searching at this point. You need to know what to change. You need to come up with tough decisions and strategies.
There will be good calls and bad calls and numerous ups and downs. Don’t get too excited by every positive indication. It is not over until the deal is done and money is in the bank. It’s also not over until it’s over, so don’t be negative until it is the last second of operations. Be realistic but optimistic, and keep fighting.
Hopefully, you found a good investor or completely evolved to a business that can support itself or attract more attention. Reflect on lessons learned. Share them so others can benefit and you can demonstrate to the world that you will carry your learnings into the next venture.