In the economic tailspin of the late 2000s, loss is part of life. Workers are losing their jobs, employers are losing their businesses, and as credit becomes more and more scarce, everyone is losing confidence. What's more, entrepreneurs are grappling with a sense that they've lost control of critical factors that could determine their futures. Those psychological hurdles are perhaps the biggest challenges facing today's business owners; after all, it was probably that shining confidence and ability to innovate that got you started in the first place, right?
"So much of it has nothing to do with you," says Tarek Tay, 36, co-owner and managing partner of Atlanta's Zaya Restaurant, which launched strong in February 2008, boomed through the summer--and then saw business drop 30 percent in September. Although well-reviewed, it has operated in the red since, even with $1.2 million in 2008 sales. "If your food isn't good, you can improve the quality," he says. "If service is the problem, you can train your staff. But if the problem is that no one's going out to eat because of the economy, what can you do?"
As he and his partners fund Zaya with profits from the New Orleans restaurants they also own, Tay works tirelessly on cost cutting and marketing. "It makes me feel like I'm not giving up," he says. "When I'm out there working and I end up with a busy night, then I get to experience some sense of return. If you sit at home, your worries just fester in your mind."
In other words, he takes control of what he can. In fact, studies have found that a sense of personal control--the belief that you set your destiny--is one of several characteristics shared by happy people. These days, gaining that sense of control might seem like a tall order. But even when the world is hurtling toward an uncertain future, there's one thing that's always and entirely up to you: your perspective on that world. And if you're an entrepreneur in an economy on the brink, your perspective could be getting a little loopy.
Actually, it's called cognitive distortion, says Edward Trieber, a clinical psychologist, an attorney and the managing director of Harris, Rothenberg International LLC, which provides integrated
solutions, executive coaching, web development and more. Cognitive distortion can cause people under undue stress to discount positive events, seeing only the negative. They also might lose their long-term perspective, focusing exclusively on the immediate fires they're called upon to douse, or perceive even minor events as major catastrophes. As of late, Trieber's company has been helping businesses cope with the stress of economic uncertainty. According to the American Psychological Association, nearly half of Americans (47 percent) report that 2008 brought increased stress--with money and the economy topping worry lists--while 30 percent say their stress is extreme.
Your first stop on the cognitive thrill ride: a network of people to talk to, says Trieber--and not for the warm fuzzies. Friends and family can point out when your doomsday scenarios are getting a little too biblical for your own good; they'll also remind you that you're more than your work. "When people define themselves by their business," says Trieber, "they might conclude, 'If my business isn't doing well, then I'm not doing well.'"
That's a precarious position in a volatile economy. But for husband and wife team Eric Haggard, 47, and Kimberly Rock, 42, whose home is security against their Torrington, Connecticut, business lines of credit, work and life really are one and the same. Rock recalls the period before she and Haggard launched their online retail business RealMemories.com as one of the most stressful times of her life.
Today, she realizes the danger of losing her home wasn't as real as it felt then. "But fear isn't always rational," says Rock, whose site, which provides archival-quality custom framing for digital photography, launched with $225,000 and brought in $100,000 in 2008 sales. "For one week, I wallowed in the what-ifs. And it did me absolutely no good."
Instead, she and Haggard wrote their way through the fear, synthesizing a long- and short-term plan of action. Relief was immediate. "When you put everything on paper," Rock says, "it's not floating around in your head as this nebulous, insurmountable set of fears."
Writing slows your thoughts enough to clarify those that aren't serving you, says Trieber, while a plan gives you perspective. "If you thought that for the rest of your life, you'd be working in this business environment, things would seem very grim," he says. "But when you see how things could be in two or five years, it's easier to tolerate what's happening now."
Haggard and Rock, who also own the million-dollar business PulpProducts.com, used to check sales figures daily--sometimes after particularly feverish economic newscasts. Nixing that nervous habit, they now look at sales monthly and quarterly. "With an online retail business, your mood can swing daily," Haggard says. "When orders are up, you're up. When orders are down, you're down. We made a conscious effort to stay positive by looking at the big picture."
At Seattle's Hyde Evans Design, a small interior design firm with $1.5 million in annual billings, the phones practically forecast the Dow. "There's a direct correlation between the amount of calls we get and news about the economy," says founder Barbara Hyde Evans, 55. "When the markets drop, clients start calling to say, 'Do you think we really need to do such and such? Maybe we could put that off.'"
As Hyde Evans' high-end residential projects slowed through 2008, she had to lay off an employee and shift to what they're calling "holiday hours." Another employee left to become an in-house designer at Starbucks, which seemed to offer more stability. "The stress was getting to the point where I sometimes felt physically ill," she says.
And she's not alone. Three quarters of people experience symptoms like headaches or upset stomachs because of stress, according to the APA, which recommends exercise to manage it. For many, that's tough. According to a national survey from Amway Global, 38 percent of Americans say getting enough exercise is their biggest challenge to healthy living. Not for Hyde Evans. Once weekly, she and her staff members arrive at the office early, move the conference table aside and take a yoga class led by an instructor. "Two of our clients want to join us," she says. "It hasn't happened yet, but we joke that we truly are a full-service design firm."
She's even found a silver lining around the dreary cloud of slow business: time for all the things--organizing the office, advertising aggressively--that she was too busy for in the past. "It's an opportunity in that sense," she says.
"Extreme inflection points always create opportunity," Trieber says. "Yes, you may have lost something, but there could be something to gain. Look at your situation and say, 'What positives, if any, are available to me now?'"
The Other Side
This past year, former advertising executive Tami Quinn, 43, and her Pulling Down The Moon co-founder and co-director Beth Heller, 41, watched the SBA's lending volume drop nearly 30 percent. So this year, the founders of the integrative care for fertility center, which reports 2008 sales of $1.2 million, have had to shelve aspirations for opening a fifth location.
"We've had so many challenges that could have threatened our business," says Quinn, whose center works with doctors to incorporate holistic modalities, like yoga, acupuncture, massage and stress management techniques, into medical fertility treatments. "Every time something like that happens, we turn to each other and say, 'OK, what's the opportunity here?'"
In this case, Quinn and Heller decided that if it's not possible to open a fifth location, they would pour their energy into making sure their four locations were that much more extraordinary. "In yoga, we say you can only go so far into the forest before you start coming out of it," she says. "Using that line of reasoning, you can see that this economy will only be bad for so long before it starts to get better."
So keep moving forward. We'll see you at the clearing up ahead.