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Issues Entrepreneurs Face

Initially people use to think that, not only foresight was required for starting a business, but a business plan and some capital also needed. Today, an entrepreneur can sketch an idea on the back of a napkin in the morning and have the business up and running by the afternoon. But not all new businesses live happily ever after. Because the majority of startups fail, it's important to be able to pull off a crash landing while minimizing the collateral damage. Startup veterans say that when there's trouble on the horizon, entrepreneurs should consider making changes in product direction, cash burn rate, business model, potential new markets and the management team.

If a company is going to shut down, there are a lot of people who are going to be affected. The investors are going to lose their money, the founders are going to go through reputation damage, the employees will lose their jobs, and customers will lose their connection to the company. Founders and investors need to find a way to shut the company down and minimize the negative repercussions.

The key to managing a crash landing is the ability to provide important stakeholders with timely information to keep the overall sense of desperation in check. Developing exit plans, providing outplacement resources, and quickly distributing information about severance pay, stock options and health insurance are crucial for employee relations. Investors, vendors and creditors need to know how debts will be paid.

It is advised that entrepreneurs to never operate based on desperation, panic or anxiety. The best results come when conducting business the same way you would if things were going well. Most professional investors and serial entrepreneurs have lost money before and understand that most investments do not pan out. But for the first-time entrepreneur who has devoted years to a single projectsometimes under less-than-ideal working conditions the humiliation associated with failure can skew decision making.

Minimize biases:
We constantly reshape reality to fit our personal beliefs. Organizational beliefs work the same way, which often blinds us to pending problems. Sharing decision making throughout the company and creating task forces to monitor potential dangers can combat this tendency.

Apply multiple search methods and find overlapping results:
Organizations often force new and ambiguous information to fit the existing course of action. It is necessary to apply some multiple search methods and find overlapping results.

Use different frameworks:
Group think can lead to a convenient obscuring of potential problems, so encouraging constructive conflict within the organization, seeking out the wisdom of experienced managers and trusting your own intuition can lead to broader perspectives. The more expansive your horizons, the better the chance you’ll see trouble coming and be able to respond proactively.

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