Before Raising Money …

All Entrepreneurs, especially start-ups, are in need of money. What are the key issues you need to address before approaching potential investors/lenders?

1.   Ask for a specific amount. Don’t speak of ranges or be vague. If you do not know the specific amount, it does not speak well of your understanding of the financial needs of your business. It is reasonable to ask for slightly more than you need to provide for contingencies, but still look for a specific amount.

2.   Outline exactly how you are going to utilize the funds. If you do not have a well-defined idea of how you plan to use the money, it does not provide a high level of confidence to potential investors/lenders. However, resist going overboard and itemizing each and every item. You should have that for your own use, but do not need it when looking for money especially in the initial meeting.

3.   Present a rational argument of how using this money will build a business that will generate positive cash flows. This will be the main selling point. Investors or lenders are not only interested in knowing how they will be repaid (with upside), but also whether the business can become a self-sustaining cash generator. Again, the idea is not present a thick business plan with fluff, but rather a well-defined and articulated strategy backed by realistic projections.

Spend some time in working on the above three requirements before you start looking for money.

Ravi Patel

Published in: on June 30, 2015 at 3:57 am  Leave a Comment  
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Entrepreneurial Freedom Comes With Responsibility

Entrepreneurs often start businesses as they want the freedom that comes with working for themselves and not for others.

Entrepreneur magazine states that people who work for themselves are happier because of the freedom that working  for one’s self permits. So valuable is the opportunity to be one’s own boss that  studies show you have to pay people twice as much to get them to work for others and still have the same level of job satisfaction as being self-employed.

Being your own boss will grant you freedom, but it does come with serious responsibilities. No one else is there to take responsibility of your company and its stakeholders other than you.

Self discipline is paramount as someone else is not telling you what to do each day – you need to set you own agenda. Setting an example of leadership for the organization is your responsibility – there is nobody else above you. If you consistently play hookey, how can you expect your people to work?

Freedom is great, but make sure you learn to be a responsible “boss” for yourself!

Ravi Patel

Published in: on June 23, 2015 at 4:15 am  Leave a Comment  
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Gaining Respect

Business leaders might accept not being loved, but they would definitely like to be respected. Entrepreneurs are no different.

Respect though is gained not by the title of a leader’s position, but by his or her actions, behavior, and consistency of decisions. Business leaders have to prove themselves to their employees to earn respect.

One’s position allows you to command and direct subordinates to do certain things. Having their respect will make them more willing and happier to carry out their tasks for you. In the long term, earning the respect of your employees builds lasting loyalty.

So as business leaders and Entrepreneurs do what is necessary to gain respect by how you treat people, make decisions, and carry yourself. If you respect your people, they in turn will do the same.

Do the Right Things!

Ravi Patel

Published in: on June 17, 2015 at 4:00 am  Leave a Comment  
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Adapting to Changing Circumstances

Could a simple saying –  “Complain not about the wind. Adjust your sails.” – offer great business advice for Entrepreneurs?

In these economic times and uncertainty, it is easy to find excuses on all the things that are preventing Entrepreneurs from succeeding. Some of the issues faced by Entrepreneurs including cash shortages, employee layoffs and poor morale, unsustainable overhead and fixed expenses, misaligned ratios of variable expenses to revenues, customer and product/service issues, high debt levels and so on are ripe topics for complaining.

People who give up easily will take this opportunity to complain and find excuses to rationalize their failure, just as a poor sailor frets about the winds.

Winning Entrepreneurs and leaders, instead, adjust their sails to move forward on a steady course. Finding ways to increase cash flow; having employee work-sharing programs and non-monetary motivational programs to boost morale; reducing overhead and fixed expenses; realigning ratios of variable expenses to revenues, customer partnerships and product/service improvement initiatives; and restructuring high debt loads are all positive ways to adjust the sails.

What would you rather do? Complain about the winds or adjust your sails. Do the Right Things!

Ravi Patel

An Effective Apology

Do you make mistakes? Everyone makes mistakes; Entrepreneurs are no exception.

What separates leaders is that when mistakes are made, genuine leaders offer a sincere apology. How do you do that?

You often hear someone say sorry and then add a “but.” In those cases there are all kinds of excuses after the “but.” All these apologies are watered down by offering excuses. Saying sorry in this case doesn’t mean much.

A sincere apology is just that – sincere! When you make a mistake, no matter affecting which stakeholder, just say a sincere sorry without any excuses or reasons. This will be more genuine than trying to explain what happened to cause that mistake.

To be even more effective, you should privately analyze the reasons for the mistake and establish corrective actions to prevent that in the future. This will appear more sincere to the offended party.

Do the Right Things!

Ravi Patel

Published in: on June 2, 2015 at 3:49 am  Comments (2)  
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