Business success is largely influenced by entrepreneurial confidence. It is one of the most consistent characteristics across businesses that succeed.
Thriving entrepreneurs believe in themselves — their capabilities to learn, apply new knowledge and skills. They reach their desired objectives, and ultimately, realize their vision.
In agriculture, where we are challenged with many uncertainties, it can be the unknown and the unexpected, and the accompanying worry and fear, that fuel the lack of confidence and have a negative impact on creativity, productivity and revenue.
Entrepreneurial confidence comes from making educated and calculated decisions, and understanding and assessing risk. Not everyone is born with natural confidence, but one can work on developing it to obtain one of the biggest assets for business growth and success.
AME recently carried out a CTEAM Program Impact Evaluation, and CTEAM participants reported that entrepreneurial management education contributes greatly to the development of confidence.
This kind of education provides motivation, knowledge and skills along with a supportive and optimistic network of peers, and confidence grows when there are opportunities to learn, master and apply skills, enriching business capabilities by having faith in direction, decisions and implementation.
Having a plan and being prepared
A key outcome of the CTEAM program is the development of a strategic and operating plan for the farm business. The plan is said to “lift the fog” and provide clarity and clear vision. One of our graduates said having such a plan is “like coming out of a dark tunnel with a light at the end. You gain the focus to head toward the light, and when you get to the end you realize how large your opportunities are.”
Through taking time to identify your foundational business principles, including your value proposition, and through understanding the steps needed to achieve your vision, you will find confidence in your entrepreneurial skills; then, business will develop because you will have created a detailed plan that guides and informs your decisions.
CTEAM graduates repeatedly agreed the first significant impact to their businesses was having a documented plan with set direction and intents that gave them confidence to move forward and implement it versus just relying on gut instinct.
Having a plan also extended to managing and assessing business risk. Most business ventures involve risk at one time or another. Risk management is about understanding worst-case scenarios associated to those risks and how to be prepared to manage them.
In agriculture there will always be risks. We identify potential negative outcomes of the risks we can’t control, as well as those that could result from decisions we make. Creating a plan to manage identified risks reduces uncertainties and increases confidence in handling the situation if negative outcomes happen to occur. This preparedness reduces the unease and fear of the unknown if the worst should take place.
Learning and decision making
Knowledge is a powerful tool, and the best decisions are supported by knowledge and information. Any learning opportunity is a contributing factor to developing confidence.
Putting knowledge and deeper insights to work empowers you to make better informed decisions and to take action with confidence. CTEAM graduates expressed how learning about financial fundamentals and understanding their true financial position provided much greater clarity and confidence in strategy and decision making.
Informed decisions and actions based on financial analysis and ratios take the uncertainty out of purchase decisions and payment capacities. Many find they also strengthen the relationship with their banker since the farm is better prepared, informed, organized and focused.
Another crucial proficiency of business is effective communications, whether with family business partners, employees, lenders, suppliers or customers. With regular presentations to peers and instructors throughout the CTEAM program, participants noted they gained confidence in their ability to articulate their strategic and operating plan to other key players with confidence and clarity. Many of these presentations were again given to lenders for financing requests with added confidence and conviction.
Other CTEAM graduates noted they had much more confidence in conflict resolution because of the skills gained to better address issues and communicate with family and employees, resulting in improved relationships.
Networks and optimism
Graduates also report that their respective study groups had an influence on their confidence levels. These individuals become a support network to each other, giving them an opportunity to discuss real-life issues with similar businesses and find various solutions to the issues, while cementing long-term friendships.
Networks are powerful — you receive constructive feedback from peers, advice and motivation when needed, but they also hold you accountable and will challenge you when required. You also gain other perspectives. Having positive people around you generates and supports optimism and determination, which in turn increase your motivation to look for new opportunities.
The need for balance
Entrepreneurial confidence is truly a necessary quality in business. However, taking it too far and becoming overconfident can be costly and detrimental. It can result in taking on too much risk or extending yourself beyond your capabilities, leading to hard landings.
It’s also important to understand the difference between being assertive versus acting aggressively.
Our observation in working with people is that it’s important to stay grounded, basing your confidence on reality and true ability. This will enable you to make better informed decisions, take calculated risks, and extend yourself within your abilities to strive for success.
Heather Broughton is a principal of Agri-Food Management Excellence. She is also the business manager and partner, along with her husband Greg, of SWG Farms Ltd., a third-generation grain farm in Alberta.