Unplanned Holes and Cash Flow Woes:  How to Manage Stress in Small Business

Aug 2, 2023, Written by Sue Miley

I know the Bible says that we don’t need to stress; we just need to bring our concerns to Jesus. But God created entrepreneurs and small business owners, and sometimes it feels like it is in our DNA. We have to learn to manage stress in our business.

There isn’t anything new under the sun though, and it seems we all stress over the same themes. And if I had to pinpoint it, a thread that runs through them all is circumstances or situations we feel are out of our control.

But, not waiting until the end of this post, I will remind us all that there is One who is in control. As Christians in business, it would help us immensely if we could remember that and depend on Him as He calls us to do. That seems easy enough, doesn’t it?

Especially when these issues arise:

Unplanned Holes in our Team

when we lose staff, one or sometimes it happens in clusters; in a small business, it is a much higher percentage of our team. And many teams in small companies do not have depth in a specific talent bench. We only have one salesperson, bookkeeper, project manager, etc. When we lose that one, it usually falls back on the owner to pick up the slack until a replacement can be found.

Unplanned holes create a domino effect:

We lost a team member.
Business owner jumps in to fill the gap.
We need more time to recruit a good fit for the skills and culture we need.
End up hiring the first semi-qualified person we can find.
Which costs money in training and, in many cases, if a poor fit, weakens the team.

And, as pride appears to be a common entrepreneurial characteristic, we lament that the initial “hole” wasn’t our fault. It wasn’t because we hired the wrong person, didn’t take care of the right person, was an absent boss or leader, or any other manageable issue. It was the no-good employee leaving us in a lurch.

An alternative path:

  • Create professional development plans for each team member. People value and stay in companies that develop and invest in them.
  • Cross-train so there are alternate backup plans than just you, the owner.
  • Constantly recruit and look for the next hire so that if you have an unplanned hole, you know where to look for a qualified replacement who will fit your culture well.
  • And pray – pray to the One who is in control. Pray God brings the right fit with the right talent.
  • Some additional articles that may help:
  • Employee retention
  • Short of staff
  • Strong team
  • Company culture

Slow and/or Low Cash Flow Creates Stress in our Business

We need cash to operate our business. It is one thing to borrow money for an asset that collateralizes the loan, but borrowing money to operate daily for other than just timing issues can be dangerous. However, our cash isn’t readily available when we are in an industry where we don’t get paid until the customer gets paid or we have customers who are using our credit to them as a bank. Or we may have a high need for cash to fund our business like industries that have extended lead times to create their product and their product is capital intensive. Construction is an excellent example of this.

There is nothing like a huge accounts payable balance, looming payday, and past-due rent to keep a person up at night.

Yet, we still believe it isn’t in our control. We hesitate to call a customer who is 90 days past due because they may get upset and not buy from us again. Who cares if they aren’t paying us? And how can they be mad at you if they are the one who is late paying you?

Again, the domino effect:

Sales are good.
Inventory and/or supplies are needed to fulfill sales.
Our vendors require quick pay.
Our customers won’t pay until the product or service is delivered.
Then if they are late, we still don’t have the cash to pay our bills.
We need to collect.
We don’t want to upset the customer.
We wait.
Our vendors call us and demand payment; rightly so, we are past due.

An alternative path:

  • Create a strong credit and collection policy and procedure and follow it constantly. Getting ahead of collection problems is the best antidote.
  • Use a credit line as it is meant to be used. Pay it down each time you collect money. Even if you must draw on it the next day, the goal is to use it for cash flow timing, not as long-term debt.
  • Save up at least three months of operating expenses before expanding your business and increasing your fixed expenses.
  • And pray – pray to the One who is in control.
  • Some other articles to help:
  • The power of financial analytics
  • Financial reporting
  • Risky

Culture and Morale Effect Our Business

We want a good culture. We are Christians and want to believe we are treating our employees well. We want to spend time with them, but can they see we are swamped? Why does that employee think our culture is toxic? I haven’t heard anyone say or do anything to that employee. Can’t everyone just get along? We are adults, after all.

The domino effect:

Employees have a bad attitude.
They let their lousy attitude affect their customer service.
The customer is upset.
The customer calls the owner.
The owner tries to smooth things over.
The owner can’t afford a hole in their team.
The owner doesn’t address issues with staff members.
Rinse and repeat.

Employee blows up at supervisor.
The supervisor complains to the owner.
The owner talks with the employee and supervisor.
The owner doesn’t want to lose the employee and have a hole.
Real discipline and accountability are absent.
Rinse and repeat.

The morale of the company is also the owner’s responsibility. We have our reasons for ignoring it, but it doesn’t matter. The result of bad morale hurts everyone. There is no way around it. Figuring out how to fix it is still the best path forward.

Just worrying about the morale and being frustrated over it doesn’t fix it. And it didn’t turn sour overnight. Patience and attention are required to create positive and lasting change. Fixing our morale also requires hard decisions and potential short-term pain for long-term gain.

An alternate path:

Managing Stress in Your Business During An Economic Downturn

This is a timely worry issue right now. Inflation is high, interest rates have tripled, and business is down in many industries. An economic downturn is not in our control. Or is it?

The economy isn’t necessarily in our control, but our business is still manageable. Our mindset is also in our control, and many times it is our mindset that hurts us most in managing situations outside of our control.

There are so many directions the dominoes can fall in a situation like we are in now. The first domino is:

Business slows down.

If we feel like we have no control over what happens, the next domino we play could be:

We stick our heads in the sand and hope business gets better soon. This domino assumes we keep doing business like we always have and hope for the best. This can lead to us spending too much, selling less, customers not being able to pay, us not meeting payroll, we lose good employees, and the worst occurs.

We overcorrect and stop spending money on anything and everything possible. We quit marketing. We lay off employees. We create a self-fulfilling prophecy. Sales dwindle, and we rinse and repeat.

We completely pivot to other services or offerings that require investment. We don’t have the talent for this service. Our processes aren’t in place. We dilute our resources as we are still at least trying to keep our core business alive.

You see the trend here.

All of these scenarios lead to stress, anxiety, and sleepless nights.

An alternative path:

I still do my fair share of worry, but I also realize that the worry part doesn’t help. When I start to worry or am feeling negative stress, I use it as an alarm bell to:

  • Pray for wisdom and discernment.
  • Pray for God’s will.
  • Develop plans or actions that are within my control that will help the situation.
  • Do what I know from experience, training, and planning.
  • Leave the worry behind as I lean into my faith and the peace that can only come from Jesus.

We may not be in control, but we have a direct line to the One who is. We must trust in His guidance, the gifts and talents He gave to us, and His will.

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Sue Miley

Sue Miley MBA, MA, LPC helps small business owners build successful businesses on a foundation of Christian values. After 20 years in business, and 10 years as a Christian counselor, Sue uses a combination of faith, business and psychology to help clients in business and in life.

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