In February, 2011, Tishan Mills and Ravin Shah decided to leave their corporate jobs for Mr. Shah's parents' basement, where the former University of Waterloo computer science classmates started their tablet-based survey company, TabbleDabble.
They gave themselves six months to earn a profit on their self-funded venture before they would consider rushing back to the safety of the corporate environment, so they knew they were running out of time after 12 long months without a pay cheque.
"We asked ourselves the same question every month, which is 'how much longer can we go? Is this business going to make money?" Mr. Shah says. "Every month we would push ourselves just a little longer, burn through as little cash as possible, just to keep going."
Things slowly started to turn around for the company when the partners signed their first major client, GoodLife Fitness, which recently signed on for a second year using TabbleDabble's flagship application, QuickTapSurvey.
QuickTapSurvey is now the highest-rated survey app for the iPad and Android tablets, with corporate clients such as McDonalds, Disney, BMW, J.P. Morgan, Procter & Gamble and Canadian Tire using it to collect data from customers. The 10-person operation has long since moved out of Mr. Shah's parents' basement and it is on track to reach $1-million in revenue this year.
"A year ago we were in survival mode," Mr. Shah says. "Today we're in growth mode."
Mr. Mills and Mr. Shah say they owe their success to perseverance, a willingness to make compromises, and being flexible.
Michelle Randall, president of Enriching Leadership International, a California-based management-consulting firm, says staging a comeback requires strong decision-making.
"I've seen small-business owners, and other business owners, when it looks like (the business is) going to crash, they start making very poor decisions. They start making emotional decisions, and they act out of desperation and fear."
Entrepreneurs, Ms. Randall adds, tend to have one of two negative reactions when they realize their businesses may be nearing the end, both of which often serve to magnify the problem.
- Isolating themselves, making it harder for employees, vendors and customers to access them, and causing unnecessary gossip and paranoia.
- “The other extreme is the over-sharer, the person who's always talking about how things are so hard and the struggle, and so they're leaning on their people for support.”
Instead, she explains the importance of finding a "happy medium" in a crisis scenario by keeping teams informed but motivating them with solutions instead of focusing on problems.
"In that fearful time you need to keep your wits about you," Ms. Randall says. "Have the mindset that you're going to get out of this somehow – it's not if but how – and on the other side, what do you want those relationships to be like? How do you make those relationships stronger having been through this process?"
Mark Faust Sr., an adviser and turnaround facilitator with Echelon Management International and author of Growth or Bust!, adds that by communicating optimistic urgency business owners can better motivate their team during a crises.
"Too often leaders are not honest with themselves, or the rest of the team, about what the facts are," he says. "Everyone has a contribution to make to innovating in the company that will increase profitability and improve their competitive advantage. When people realize that's part of their responsibilities, it's part of what needs to happen to keep their jobs going, you can get attention pretty quick and you can get results very quick."
When a company is trying to make a comeback, Mr. Faust advises business owners to maintain a clear vision of the future, and to communicate that vision with their team.
"If you're in a turnaround situation … create a vision of where you want to be, an ideal outcome, and maybe it's three years down the road, but ask the question: 'if all the stars align and things go as well as you could possible imagine, what is the state of being that we imagine being in three years?'" he said. "You pick that timeline, you pick that state of being, you create it, you detail it, and you work backwards from there."
Mr. Faust adds that when constraints inevitably arise that challenge a company's turnaround vision, business owners should be willing to innovate and change strategies.
When Mr. Mills and Mr. Shah were grappling with the reality of shutting down TabbleDabble, the entrepreneurs found innovative new ways to build revenue, such as offering graphic design expertise, additional signage and branding options, and renting out iPads.
"You've got to do whatever it takes to get revenue," Mr. Shah says. "Companies run on money, and if there's no money, there's no company. So you've got to do what you got to do to make some money, even if it's not exactly what your vision of the company is, because you'll get to that vision eventually.
"If you can't pay the bills, you'll never get there."