Return on Marketing Investment

A well accepted, but not necessarily true, axiom is that it is impossible to measure the return on your marketing and advertising investments.

Entrepreneurs desire to grow their businesses and need to spend certain monies on marketing their products and services. However, there is some reluctance as the true return of their investment is not readily known.

However, if a marketing program is well-designed, it could be possible to track the benefits of such a program and calculate the return on investment. Paying attention to the measurement of results while designing the marketing program may prove beneficial.

Ravi Patel

Focus on the Big Things

The well-known Pareto Principle of 80/20 is important to practice in business.

An offshoot of that principle is for Entrepreneurs to focus on the big things as they grow the company and let others worry about the small details. If one dwells on small things, there is little time to work on the larger, more important things in business.

Similarly, if you are dedicated to increasing revenues or cutting costs, focus on the 20% of issues that would generate 80% of the returns.

Do the Right Things!

Ravi Patel

Philosophy for Hiring at the Management Level

As Entrepreneurs build their organizations and hire key management personnel, what is the hiring philosophy?

Do you hire key management officers specifically for a position or for the company?

While you do need to add specific skills and management experience in your organization, do not lose sight of the future. Entrepreneurs need the support of a strong, complementary management team that not only serves the short term needs of the organization, but also is a valuable resource for leading the company towards fulfilling its Mission.

It is sometimes better to hire the right person for the long term needs of the organization rather than the requirements of an immediate,  specific job description. Be resourceful and create  the appropriate job description for the right person!

Ravi Patel

Do you have a Mission?

Entrepreneurs start businesses on creative ideas. They know what they want to accomplish and what their mission is.

How about sharing that mission with the rest of the organization as it is being built up? Do you have a well-defined Mission Statement that clearly depicts the Entrepreneur’s initial and refined thoughts on the purpose of the company?

Well-defined Mission statements often contain the purpose and aim of the organization; the company’s primary stakeholders – clients, stockholders, employees, etc; responsibilities of the organization toward these stakeholders; and products and services offered.

In developing a mission statement encourage as much input from your management team, employees, and other stakeholders; make it short; and publicize it broadly internally and externally.

Ravi Patel

Customer Analysis

Producing accurate and timely monthly financial statements should not be the end goal for Entrepreneurs. Analyzing not only the financial statements, but also all aspects of the business is what helps Entrepreneurs better understand their operations and make optimal decisions.

One of the areas of analysis should be customers. Customer analyses related to size, profitability, diversification, quality of services, etc. should be conducted periodically. Such analyses are critical in better understanding the contribution of your top and marginal customers towards your profitability and success.

Armed with valuable analyses you can approach your customers to discuss ways to serve them better. Do the Right Things!

Ravi Patel

Team Building

After having hired a great management team and put them in place in the organization, what does the Entrepreneur do then?

In addition to mentoring and coaching the members, the Entrepreneur needs to build cohesiveness in the team. Members of the management group must work well together and function as a well-oiled machine.

The Entrepreneur should plan periodic team building events, preferably off-site, to create a feeling of camaraderie among the management team and facilitate effective working realtionships between the members.

Ravi Patel

Financial Analysis versus Instinct

Entrepreneurs by their nature are risk takers and successful because they rely on their gut intincts to do innovative things.

As the capital needs of their businesses grow, they have to attract investors who often demand financial analyses for major projects or ventures.

There has to be a fine balance between decisions made on instinct and ones based on financial analysis. While the “entrepreneurial” spirit in decision making is important, the need for solid analysis should not be overlooked.

Entrepreneurs should optimize decision-making by achieving a proper balance between instinct and analysis.

Ravi Patel