“Adopting the right attitude can convert a negative stress into a positive one.”

“It’s not stress that kills us, it is our reaction to it.”

– Dr. Hans Selye

Dr. Selye was a pioneering Canadian endocrinologist who conducted important scientific work on the response of organisms to stress. That’s something most business owners learn about very early. In business there are always stresses: trying to accomplish more with less or very little, trying to reason with the unreasonable, trying to shape positive behaviour, and meet goals and deadlines. There is a never-ending conveyor of stressors thrown at humans daily, and particularly, upon those of us who are responsible for the well-being of others.

I’ve found in business that the wise use of information can provide tremendous relief from stress. No one I know particularly enjoys the tedium of record keeping, but the information gleaned from the humble compilation of numbers can tell a story if you care to look. Numbers in business are simply the graphic representation of the efforts of everyone who makes your enterprise run. Those numbers, when accurately compiled, are like a sheet of music to a maestro. Used correctly, the images on paper can be translated into a symphony. That’s the first step in reducing stress in business: listen to the music.

The next step, particularly now, is to engineer your business. I used to think about engineers as problem solvers, but that’s only part of what they do. For the most part, they break things! They stress components to determine breaking points, so the user won’t be surprised when a gasket blows. Wouldn’t it be nice to know how far you can stretch your business resources before it implodes? I think that would be good information.

By way of example, and something particularly timely, is the stress test of your business’ ability to handle debt. This is a key decision that needs to be addressed on an ongoing basis during the lifecycle of every business. Let’s say, for example, that interest rates are 2% per annum, and that you want to buy a home for $1,000,000. It will cost you $20,000 per year in interest. That doesn’t sound like a lot, and is probably manageable. You may decide that you can carry that amount of debt, but that’s not really the question you should be asking yourself. The real question is: ‘can you afford that house for $1,000,000?’ You may be able to carry the debt, but when put under stress you may not be able to afford that house. If the rate of interest rises 1%, will you be able to generate the cash flow needed to carry the debt? What if it rises 2%? Now you have to evaluate whether to go variable or fix the rate at something you can afford, thereby reducing your risk and related stress. Now your powers of analysis and decision making are key to your economic survival and living happily in your million dollar home.

Look at your business. You need to evaluate three numbers: sales, margin, and fixed costs. With those three numbers you can determine the break even level of sales you need to survive, and you can experiment with the factors which will impact on your ability to grow successfully. With three numbers you can make better decisions concerning the long term economic viability of your business. With three numbers you can evaluate what you need to accomplish to ensure you have the necessary resources to endure and prosper in your industry. Then as you look deeper, you gain more insight and you can make informed, better decisions. A lot of business owners are too busy paying the bills to pay much attention to these basics and fly by the seat of their pants. That’s OK if day-to-day survival is enough for you, but it won’t help you to sail the uncertain seas of commerce. Better decisions happen when made free of stress, based on the objective evaluation of good information. Your business should not be a drag on your life; use those few numbers to put wind in your sail$!