Problem Solving | Mike McRitchie | Resume and LinkedIn Profile Writer

Responding to Problems

In business, there will always be challenges, and particularly in regards to generating profit. Even the most successful businesses in the world have their ups and downs; the ideas that don’t come to fruition; the product failures that they do their best to forget. No business is immune from these profit blips, and accepting that there will occasionally be rough spells is a key component of maturing as a business owner.

However, there’s no denying that accepting these blips is often easier said than done. This is especially true when you’re encountering your first blip in business; with no prior experience of how to deal with such a setback, you can find yourself falling into a reaction that is counterproductive at best, and even more damaging than the initial problem at worst. If your business is going through a rough time in terms of profits, here are the three responses you have to ensure that you avoid…

Refusing to accept blame

No one likes to think we have made a poor decision, or missed an obvious sign that we shouldn’t have overlooked. However, as a business owner, you have to be willing to examine a situation objectively and accept blame for profit problems if required. If you click here, you can read an experienced account from a business owner who has been there and done it when it comes to resolving a profit problem in their business, and they are very clear that management problems are often behind your profit woes, so it’s important to examine the matter in depth and — if necessary — take responsibility for your own errors.

Swingeing cost-cutting

If profits aren’t where you expect them to be, deeply and quickly cutting costs may seem like a sensible decision. However, you have to be extremely cautious about this, as you can leave your budget so stripped back your company is barely able to function. It’s vital that you cut costs very gently, starting with low-hanging fruit and only progressing the cuts after further evaluation proves you need to cut deeper. Go gently to begin with, as it gives you some room for future maneuver.

Impulsive abandonment of new ideas

If there is an area of your business that is under-performing and impacting your profits, you may find yourself tempted to abandon the entire endeavor and focus instead on areas that are profitable. Admittedly, this can sometimes be the right decision; at the very least, it prevents you from falling into the trap of the sunk cost fallacy.

However, if you abandon aspects of your business every time they don’t meet your expectations, in time, you won’t have a business left. Ensure that you’ve done all you can to improve profits in a failing area rather than jumping to an impulsive abandonment that you may later come to regret.

In conclusion

Now you know how you shouldn’t respond to business challenges and problems, you can focus on tailoring your response so it is genuinely beneficial. Ultimately, successfully controlling your response to a problem is to the key to finding an efficient solution.

Creative Problem Solving

In many ways, an entrepreneur’s role is that of a creative problem solver. In business, the successful entrepreneur is the person that can see a problem or pain point and find a way to solve the problem or ease the pain.

When you think about it, people don’t buy light bulbs – they buy the ability to see when it’s dark, meaning the person that invented the lightbulb came up with a solution to a prevalent problem that was people not being able to see very well after the sunset.

Similarly, people don’t buy fridges – they buy the benefit of an ice cold beer or the benefit of keeping their food from going off, as soon as you get it home. Essentially, the person that invented the fridge solved the problem of food going off due to exposure to the natural climate.

Today, however, many entrepreneurs are solving problems colloquially referred to as “first world problems” because they are rarely essential, they tend to be improvements – as an example, a can opener that can be used by someone with arthritis is a creative solution to a common problem; or the smart fridge that intelligently orders food with a local supermarket to ensure you never run out of milk… a creative solution to a common problem. In these instances, you need to adopt “design thinking”, which will help you get to your end goal faster and more efficiently.

The point being, that as an entrepreneur your job is to be a creative problem solver, yet it’s sometimes easy to get stuck and feel like we are heading our head against a brick wall. If this sounds familiar, you’ll want to consider these two strategies for getting out of a creative rut; which are play and travel.

PLAY

As a kid, you would have been encouraged to play due to a vast range of developmental benefits yet as an adult you are less likely to engage in natural play, as life gets in the way, and what most adults consider to be play is actually very insular and isolated as it often involves sitting in front of a TV screen pressing buttons on a remote control.

Many PhD students working in the field of innovation and design are encouraged to use Lego’s to explore their ideas, which may sound ridiculous and perhaps unnecessary, when they can just use words – but this process of play helps get their creative juices flowing and encourage the development of ideas, particularly in the context of group work.

TRAVEL

Sometimes, when we are faced with an intellectual challenge particularly one relating to entrepreneurship we get so bogged down in the problem we barely come up for air – meaning we end up living and breathing the problem rather than being able to engage in blue sky thinking and find a creative solution to the problem at hand.

Similarly, writers that get ‘stuck’ call this writer’s block which is why so many writers tend to spend a lot of time travelling, as travel broadens the horizons and a change of scenery is sometimes all that’s needed to shift one’s focus and let the penny drop.

Profit Blips In Business: The 3 Worst Ways To Respond