The other day, I was talking to someone with quite a bit of experience as an entrepreneur, although now he works in corporate America.
It turns out he has a great idea for a new concept in the service sector, and he noted he'd been thinking about it for several years now.
When he explained the concept I agreed that it was a good idea, but also thought that there may be some challenges with it due to the changing dynamics of the economy and the reality that it might be difficult to get corporations and government agencies to pay for this new type of service.
What I noted was that through his entrepreneurial optimism and genius level creative thinking to create this concept, he hadn't considered all the potential eventualities, or how the game has changed, or how it plays out in the real world.
The amount of money to create this new business and startup operation would be significant and easily cost a couple million dollars, most of which would be cash flow in the bank to do the services until the company got paid.
Even if the company had a sales staff bringing in lots of new business, that would just create a larger challenge with the amount of cash flow needed on hand to complete the services until the company got paid.
Perhaps you can see some of the challenges with entrepreneurial optimism and why a reality check is often needed.
Any good consultant or business mentor needs to know this - and without crushing these ideas explain the reality to the entrepreneur and allow them to solve any additional issues.
Rather than shooting down the idea completely, there may be solutions, some that a consultant or business coach wouldn't even be able to solve or solutions that wouldn't even come to their mind.
Nevertheless, this is something entrepreneurs are very good at, solving problems that is.
It turns out the entrepreneur did have a way to get over the cash flow challenge by bidding the services with half up front before they started, or nonprofit sponsored payment of services that would benefit the entire community once the services were performed.
In this case that could actually work, therefore I felt good about not crushing the idea or telling him it wouldn't work, but merely presenting a new challenge, from my real world experience and observations of how the currently challenged economy is affecting those companies and service businesses that work for large corporations or government agencies.
Indeed, I hope this case study will help you as a consultant consider how to present counterarguments to the overdone optimism of serial entrepreneurs.
If there is a will, they will find a way, just don't let them get hit by any unforeseen circumstances and let them identify all the problems before they start.
This is something you need to do to help them succeed.
I hope you will please consider all this and think on it.