A Balancing Act for Entrepreneurs

Starting and building a company is fun and exciting for Entrepreneurs. They are involved in all functions and cherish control over details. However, there comes a point in time to let go.

Parents have a difficult time letting their children venture out on their own – from the first play date to leaving home for college.

Entrepreneurs are not so different. When their businesses grow and new management is required or when Entrepreneurs need to move on to other things in life, they have a traumatic time letting go.

Successful companies are not built on single individuals, but a strong organizational team of management leading the employees. The Entrepreneur’s role is to build the management team, inspire them with the vision, and let them execute the mission.

Enlightened Entrepreneurs accept the process of letting go gracefully, while some hold on by pretending to delegate management responsibilities but continually interfere.

Entrepreneurial company management is a fine balance between letting go and holding on.

Ravi Patel

www.patelCFOservices.com

 

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Published in: on October 29, 2013 at 4:56 am  Leave a Comment  
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Accepting Advice

“I never learned from a man who agreed with me.” – Robert A. Heinlein.

Critics might be frustrating to Entrepreneurs and might even get under their skin. However, critics can teach you important lessons. If you listen to people who only agree with you, you are not going to learn something new.

It is always important to weigh different sides of any issue to reach the optimal decision. If everyone around you only promotes one side – your viewpoint – you will never see the other side. Listen to people who don’t agree with you to understand differing opinions. You might even find those perspectives more useful than you own and it could lead to a better decision, product or service.

It is often better to accept good advice from critics than bad advice from your supporters. Just because someone does not agree with you does not necessarily make them wrong. Similarly, someone who agrees with you is not always right.

Entrepreneurs should accept good advice, no matter where it comes from.

Ravi Patel

www.patelCFOservices.com

 

Published in: on October 22, 2013 at 4:52 am  Leave a Comment  
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Knowing your Business Model

Entrepreneurs, do you fully understand your Business Model? What drives your business and what affects it?

What generates revenues in your business? What are the key variables that affect your revenues? Understanding your revenue model completely and analyzing the key drivers is an important component in knowing your Business Model . Have you ever performed sensitivity analyses on the key variables to see how they affect your revenues? What could you do to control the variables and affect the outcomes?

Similarly, what are the key cost and expense components in your business. What is fixed and what is variable? Do you know the broad categories that account for 80% of your costs and expenses? What can you change to increase your bottom line?

What is controllable versus non-controllable in your Business Model? Are external factors a key component?

As an Entrepreneur one needs to fully understand the Business Model not only to improve performance but also to talk intelligently to potential investors.

Ravi Patel

www.patelCFOservices.com

Published in: on October 15, 2013 at 3:20 am  Leave a Comment  
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Are you Setting an Example?

When starting their business,  Entrepreneurs show great leadership by rolling up their sleeves putting in the effort that they demand of their employees. As companies grow Entrepreneurs sometimes say one thing and do something else.

Entrepreneurs need to ask themselves certain questions to determine if they are continuing to show leadership by example:

  • Am I still putting the effort that I am asking of my employees?
  • Do I watch what I spend while I announce cost reduction programs?
  • What am I am doing to improve the company when I am preaching on continuous improvement in my organization?
  • Am I cutting corners while I demand quality from my employees?
  • Do I exhibit what it takes to provide superior customer service when demanding the same from employees?
  • Am I making greater sacrifices than my stakeholders?
  • Do I give the impression that we are all in the same boat?

Answers to these types of questions are crucial to determining your credibility and perceptions of your leadership. Do the Right Things!

Ravi Patel

http://www.patelCFOservices.com

 

Published in: on October 8, 2013 at 5:00 am  Leave a Comment  
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Random Thoughts for Entrepreneurial Management

A few management thoughts from past experiences:

  • Do not overreact to situations where there is employee dissatisfaction or customer or vendor complaints. Analyze the situation calmly before taking proper corrective action, instead of taking hurried actions due to external pressure
  • If you need to make a statement or convey a message regarding any irregularities in your company, do it for significant issues not trivial ones. If you mostly emphasize minor matters, your employees are going to dismiss such gestures.
  • Do not focus on the minor issues in managing your companies; focus on the larger or macro issues for greater impact. Let your management team manage the details.
  • If you do have a serious situation, do not create a smokescreen and divert attention away from it to hide the real problem. Be honest and you might be surprised at the support you get.
  • Be sensitive to the message that you send with your actions. If you are being austere or are having cost reduction programs, do not have bonuses or spending that is contrary to the current environment in your company. Having incentives is not inappropriate, but make sure that they are related to the right objectives and are perceived positively.

Things to ponder as you manage your companies …

Ravi Patel

http://www.patelCFOservices.com