A big part of being a business leader means being an optimist. But there are times when you need to park your optimism. This is one of them.
An asset-based lender told me this week that getting some of his borrowers to take a more realistic view of their situations is becoming an issue. That’s probably not surprising, after all entrepreneurship is a mix of optimism and practical action.
Here is what I would suggest to someone struggling to find a balance between optimism and practical action in the current environment. Recognize that in a crisis, we often defer to our gut, our subconscious, our instincts, and that means your innate optimism could be misplaced at this moment. But there is a time and place for that energy.
Here is how you can direct it. First, park your optimism for a quick minute and see what is going on around you. It is for almost all of us a bad situation. Now is the time to make a plan for the short-term bad situation. Hunker down, push off spending, let employees go, defer payments, take government assistance. Write this into a plan.
The best planning tool for a crisis is a 13-week cash flow model. Then once you are hunkered down and have a good cash-based plan, pull out your optimism and think about how you will attack the new world. You want to take a fresh look at the dual problem of getting back on your feet as a business and how would you be best placed in the new world order where clearly many things will change.
Putting that optimism on the back burner now and then later directing it to your post Covid-19 future is the most useful way to direct your entrepreneurial energy and optimism.