First understand a financial crisis is time-related and this too shall pass. Entrepreneurs or not, anyone can lose morale during uncertain economic times. Here is what to do in face of financial crisis as entrepreneurs.
Cut Your Losses
It’s a natural inclination of human beings to take more risk in situations that aren’t working than to take risk in situations that are working. So the inclination is to hold on to losers and not to add to winners. Being able to know when to cut, know when to fold is hard to do. In fact, it’s one of the toughest things to practice in a financial crisis. And one of the first things people should learn.
Sit On Your Hand
No, I’m not asking you to procrastinate. But learn to slow down, lower your expectations. A wrong decision can make things worse for you. During a crisis we as humans can be irrational and take decisions on emotions only.
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So, take no action. Just sit on your hand. So that you don’t go out there aggressively into a crisis borrowing more money or taking unnecessary risk to cover your losses in hopes of getting it all back. Being able to sit on your hands is a virtue that takes many, many years to learn. But that may be what you have to do. It’s important to encourage yourself to be more philosophical and to be more patient.
Learn The Lesson
You have to do a psychological post-mortem and determine what clues you missed to get into this financial crisis. What where the warning signs? There always seem to be enough warning signs if you are on the lookout for them before any economic difficulty.
Put in place a process to recognize what’s hurting and crying for help early on. Take steps to offset or minimize those risks. Learn your lessons from the mistakes you and others make. Being in a financial crisis is an experience, even though not pleasant but an important one for any of us to be good entrepreneurs.
Regain Your Mental Health
Any financial crisis could not be more burdensome, problematic or critical for an entrepreneur. The stress of it can make anyone psychologically vulnerable. You can better help yourself by focusing on more strengths than worrying about the weaknesses. Assess your emotions and keep note on yourself to regain your mental health. If you feel hopeless, talk to someone you think would help. Practice patience and tolerance, it will get you through all crisis.
Also Read : 5 Smart Steps to Become Debt Free
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