Risk, Stress, and Entrepreneurship

Dear Coach Alan,

After 30 years, I am feeling a great deal of financial risk and stress in my role as both owner and CEO of my company. Here are a few examples of why. I was named in a lawsuit where my company was not even involved but listed through association.  I have a major customer who is slow in paying invoices.  And, several of the projects I expected to begin are being delayed due to both political and market conditions.  Am I just becoming a worrier or should I be thinking of reducing my stress by selling off assets and or streamlining my company?  

Bob

Dear Bob,

Being an entrepreneur always involves risk.  You are not unusual in worrying.  Many articles have been written on how scary it can be to own and run a company.  The first question I would suggest you focus on is “How do I manage risk–and the stress that goes along with it?”

Let’s look at each of the challenges you mentioned and put them into perspective.  With regard to the lawsuit, what is your situation regarding insurance?  Is your insurance company defending your case, and is it taking care of legal fees?  It is fairly common for lawsuits to list everyone with resources. This does not mean you will be liable for compensating the plaintiff.  While a lawsuit is certainly distraction, you need to let the legal process take care of this case.

Your slow-paying customer is cause for concern.  How confident are you that this customer will honor his or her commitments?  Does this customer have a rationale for withholding payment?  Are you able to manage cash flow until they pay their bill?  One thing you may want to do is check out the financial health of this company.  If healthy, perhaps a payment program can be worked out.

Sales based on projects pose special challenges.  In my experience, unlike products and services that are in continuous demand, projects are often put on hold based on economic conditions and organizational support.  If these projects are approved and funded, you should be able to get input from the customer on when they will be initiated.

In short, each of these concerns requires more information to assess and mitigate the risks.

To address your question about selling off assets or streamlining your company, as your coach, I would process each option with you to see how they would change your company and stress levels.  Will selling off assets or streamlining your company decrease your stress?  You will still be leading a company with sales challenges, slow payers, and potential lawsuits.  The real question you need to answer for yourself is “At this point in my career, am I willing to take on business risks?”  You may simplify your company and be fine with less risk.  You may also be able to take cash out of your business by selling some assets, giving you some financial security.   Or, should you be considering selling your company and doing something entirely different?

Entrepreneurs like you are exceptional.  The risk you are willing to take on creates value to customers, jobs for employees, and community support through the taxes that you and your employees pay.  You have lived with this risk for many years.  But in that time, your tolerance for risk may have changed, and now you will need to decide what is best for your company, your stress levels, and your financial security.