Facing Challenges in Entrepreneurship | Tory Burch Foundation

Small business ownership can bring so much satisfaction as well as its share of difficulties. Changes like materials price increases and smaller budgets across industries can make it harder than ever for small businesses to compete with big ones. Entrepreneurs are resilient, but even the toughest may start to reconsider having a business at all.

Kimone Napier, founder of Hire Breakthrough recruitment agency and The Intrapreneur Network, returned to our webinar series to help frustrated founders think through their next steps: either finding new ways to sustain their business, downshifting or pause it altogether. She emphasized that regardless of the path they choose, a founder probably has more options than they think that first. “What it means is that as entrepreneurs and business owners, we are going to have to get creative in our ways to generate money and create opportunities for ourselves.”

ASK YOURSELF SOME QUESTIONS.

Napier outlined the major sources of frustration including financial uncertainty, loss of work-life balance, difficulty managing teams and cash flow concerns she sees when talking to her clients.

Planning for the next step in your business starts with thinking about how it fits into your life. Ask yourself:

• What are my personal and professional goals? Are you currently focusing on debt repayment or home ownership? Are you excited about your invention of yours?
• What are the risks to your customers? What, if anything, will your customers lose if you transition away from full-time entrepreneurship?
• What are your other options? Could changing your business model or your offerings help your business? Can you turn things around by hiring help? Or is full-time entrepreneurship truly unsustainable for you at this point in time?

The answers to these questions will help you narrow your focus as you plan for your next steps. You’ll have to create the work-life balance that suits such common goals as self-determination, innovation, achievement, recognition, pursuing your passion, creating your legacy, and more.

YOU DECIDE: YOU WANT TO STAY A FULL-TIME FOUNDER.

You may have concluded to continue with full-time entrepreneurship because you are passionate about the problem you’re solving with your business. You appreciate the potential for flexibility in your schedule, the control you have over your output and the fact that there is no real cap to your earnings. Napier believes those founders interested in remaining full-time entrepreneurs can breathe new life into their businesses by changing their business model or finding new sources of capital.

Business model changes

Adding a co-founder to your existing could also alleviate financial burdens when they bring a cash infusion to the business. Co-founders can also usually bring fresh eyes to your business’ challenges, as well as a different kind of expertise.

Business owners who are overwhelmed with the amount of work or clients can consider an agency model, where they subcontract projects. They may also choose to serve as consultants, who advise businesses how to solve problems, rather than executing each tactic themselves. Or instead of asking clients to pay for a single service, you may decide to request a few for VIP days, where you make yourself available for all or part of a day to help them with anything they need help with.

Added revenue streams

Napier also recommended that small business owners consider diversifying their offerings to have different income streams. For example, service professionals could add a subscription or pay-on-demand online course component to their existing consulting business. Consider making yourself available for speaking or teaching work, though Napier recommends someone who is new to public speaking work with a coach first.

Founders can also apply for grants or look into alternative funding for necessary capital. Again, make sure the type of capital you raise fits into your existing operations and bandwidth.

Decide which options make the most financial sense for you in the short term and trust your gut. “I want to stress to all of you is that entrepreneurship does not look like for me what it’ll look like for the rest of you individually,” Napier said.

YOU DECIDE: YOU WANT TO BE A PART-TIME FOUNDER.

If you are a full-time entrepreneur who is considering downshifting out of full-time entrepreneurship, the first thing you want to do is make a transition plan. How will you communicate these changes to current clients and still meet their needs? Will you need think about selling remaining stock? Will you need to become an employee, at least for the time being? Part-time founders are perfectly primed to benefit from sources of passive income, like the courses, workbooks and subscriptions Napier mentioned.

Part-time entrepreneurs, especially those providing business services, may consider re-entering the workforce as employees. They may also consider more innovation-focused roles that require intrapreneurship.

Intrapreneurship

“Intrapreneurship is the act of behaving like an entrepreneur while you’re working within a large organization,” Napier explained. That could mean working part-time while growing your business, leading a specific initiative at a company on a consulting basis or finding new opportunities for the business that employs you full time. This independent approach to work focuses on innovation, leadership and agility—all hallmarks of an entrepreneur. Flexing those skills within a large company can go hand-in-hand with stepping away from full-time entrepreneurship or scaling a small business after-hours.

In fact, being an employee for a time could be just the thing you need to support goals while you continue to build your business. Your work at a larger company can give you the chance to stay sharp on emerging industry trends and technologies. You can also use the salary from your employee role for living expenses or injecting cash into your growing business as needed—both ways to take the pressure off in times of low profits. Napier shared that some part-time business owners increase their W-4 withholding to cover the quarterly taxes they would otherwise have to pay on their companies. Lastly, having a salaried job that provides a W-2 is also helpful for people who need proof of income as they prepare to make a major financial commitment like buying a home.

While you may perform similar duties in your job and your business, it’s important to avoid poaching clients. For example, if you work at a company in a marketing capacity and have a marketing business, approach clients in a different industry than the ones your job handles. Thankfully, non-compete agreements are becoming less common, meaning you have more leeway in what you can legally do with your own business.

Being an employee while working on your own business can be time consuming. Be honest about the time you have—and find ways to make more time. Think about whether you can afford freelance help and investigate the kinds of AI tools that can support your operations. Careful project management can also go a long way to helping you run your business and your life.

Napier suggested that entrepreneurs who decide to start a job search should brush up their resumes and even consider hiring a resume writer . A professional can help you highlight the skills, projects and meaningful metrics from your time as an entrepreneur in a compelling way for hiring managers. Take this opportunity to ramp up your networking as well.

Should you decide that, after a time of being an employee, you’d like to go back to running your business full time, be sure to set aside six months of operating expenses, Napier recommended.

YOU DECIDE: YOU WANT TO STEP AWAY COMPLETELY.

Market forces or family needs may have made it so that closing your business is your best option right now. Again, you’ll need to plan for your transition. Close out or hand off existing projects. Talk to people in your industry about how best to handle leftover stock and equipment. If you’re considering bankruptcy, speak with trusted advisors about your options and what the process might look like for you. It’s possible you have more options than you think.

Remember, putting down your business doesn’t destroy your hard work. Nor does it mean you can’t relaunch or scale your business at another time. “I don’t want you to think about anything as final, because I’ve seen a lot of people stop their businesses and start them right back up,” Napier said. “Again, it really depends on the moment.”