Do Entrepreneurs Worry About Fraud?

Almost all Entrepreneurs have heard about fraud affecting business. While they might be lucky not to have experienced fraud first-hand, they can appreciate the devastating effect of malfeasance and broken trust in companies.

Entrepreneurs are often too trusting of their employees, especially ones who started at the beginning. Too much trust without built-in internal controls leads to a potential environment for fraud.

Entrepreneurs might be aware of the need for internal controls in their companies, but the size of their organization often limits proper segregation of duties.

Regardless, Entrepreneurs should be vigilant about proper checks and balances as they build their organizations. While trusting your people is a fine virtue, a solid company is built on strong systems and procedures with proper internal controls.

Even in a smaller organization, creative division of responsibilities with reviews and approvals can provide adequate controls.

Protect your company against fraud by doing the right things!

Ravi Patel

www.patelCFOservices.com

What Drives Your Revenues?

Almost everyone has heard the cliché that in order to help a hungry man for the longer term one teaches him how to fish rather than giving him fish.

Similarly, for Entrepreneurs to be successful they should not only focus on increasing revenues, but should more importantly also understand what drives those revenues. Then, improve the processes that deliver those revenues.

Entrepreneurs might be able to increase revenues in the short-term by doing it themselves. Without knowing what drives revenues it might indeed be short term. In order for revenues to continue growing for the longer term and through other people, they need to establish and keep on improving the processes that generates such sales.

In order to do so, they first need to understand the processes, improve them as necessary and then ensure they are repeatable with no lapse in quality. Documenting the procedures, training the people and monitoring compliance are necessary to implement robust revenue-generation processes.

Do the Right Things!

Ravi Patel

www.patelCFOservices.com

Managing Change

Successful companies grow by changing with reality and situational needs. Being stuck in the same rut doesn’t help anyone.

However, Entrepreneurs can’t force change upon their employees. They need to first create conditions where employees are willing to accept change. Managing change effectively is necessary for its successful implementation.

The first step is to involve the people affected by the change in the process. Don’t force change upon people.

Involving people means that the Entrepreneur has to communicate the reasons for the change and genuinely listen to ideas from employees on how best to make it happen.

Employees are closer to the operations and are in a better position to suggest ideas once they are aware of the need for changes. Accepting their ideas gives them a feeling of being part of the process.

Involving people in a positive environment of collaboration will also make the implementation of changes more effective in terms of acceptance, speed and cost.

Manage change well by involving people and creating a positive environment for them to contribute to its success.

Ravi Patel

http://www.patelCFOservices.com

Are You Managing Growth?

“To climb steep hills requires slow pace at first.” – William Shakespeare

Starting a new business and helping it grow is akin to climbing a steep hill. If you climb too fast you could run out of energy and might not get to the top; a slow pace is required at first to build up strength and stamina to reach the peak.

Entrepreneurs too need to pace their growth. At first one needs to move slowly to ensure that all the building blocks (fully developed product or service, employees, backroom systems and processes, etc.) of the business are in place. If one starts running without these fundamentals, one might not be able to get too far.

Starting with a slower pace also ensures that you have time to make sure everything is working as intended. If corrective actions are required, you have time to fix the problems before you get too far down the road.

Once the structure is in place and you have warmed up, you can gradually increase the pace of growth as your building blocks are strong and the business has stamina.

Pace yourself in business to climb to newer heights.

Ravi Patel

www.patelCFOservices.com

Do you Depend on People or Processes?

When Entrepreneurs start their business and during the initial growth stage, they rely upon a few people to know most aspects of their operations. Entrepreneurs depend upon these key people for everything and if someone is absent, it disrupts the operation as no one else is aware of the required details.

For companies to grow, it is critical to develop efficient, solid business processes. Reliance on an individual for knowledge of  the procedures to conduct business is risky.

A solid process provides the foundation for imparting knowledge to multiple people for understanding the procedures and if properly cross-trained, any one should be able to fill in or step up to perform the necessary tasks as required.

Information on business tasks residing with individuals not only poses a risk, but also eliminates improvements since the individuals have always been doing it the same way and see no need to change. A well-defined process on the other hand allows measurement and continuous improvement from many people to make it even better.

Entrepreneurs should have more dependency on processes than individuals.

Ravi Patel

http://www.patelCFOservices.com

Are you Ready for Growth?

Entrepreneurs are mostly focused on growing their companies and would like nothing more than rapid growth. Compared to the alternatives, managing growth is a nice “problem” to have.

However, is rapid growth always good for Entrepreneurs? Not necessarily.

Being ready for and managing rapid growth requires tremendous preparation and infrastructure. In addition to unique product and services and a solid management team, items such as adequate facilities, reliable IT infrastructure, communication systems, developed business processes, working capital lines of credit, access to growth capital, a group of professional advisors (lawyers, accountants, etc.), an industry advisory group or Board, and so on must be in place.

Most Entrepreneurs have a few of these things in place as they expand, but reach a crisis point when certain required elements are not readily available or in place.

While rapid growth is desirable, Entrepreneurs must ensure that they have in place the requirements to manage such growth . Otherwise, rapid growth may not be good for them.

Ravi Patel

www.patelcfoservices.com

Published in: on October 14, 2014 at 4:09 am  Leave a Comment  
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Focus on Fundamentals

Recent history showed that during a three-year period, the U.S. economy showed good trends, but the fundamentals were weak. This led to some of the downturns in the stock market and housing meltdowns.

Entrepreneurs can learn from these lessons. What if your business shows good trends, but the fundamentals are poor? You  feel great in the short term, but the future might be bleak.

As an example, your sales may be on the upward trend, but if the fundamentals for your business – quality of product/service, delivery times, customer service, and so on are weak, how long will your sales continue to grow? What if your sales are growing, but your margins are rapidly declining? Is that really a good trend?

Entrepreneurs should not be fooled by short-term trends in their businesses, but focus on ensuring that the fundamentals are sound and going in the right direction. Determine the key drivers of your business and concentrate on fixing and enhancing these fundamentals to grow your company for the long term.

Ravi Patel

http://www.patelCFOservices.com

Recover from Mistakes

Some Entrepreneurs are just too much of perfectionists. But, they can’t afford to be so!

Entrepreneurs often try not to make mistakes. Sometimes they try too hard. Is this a good thing? Not making mistakes is good, but trying too hard not to make them could be counterproductive. Trying too hard to avoid mistakes often causes them.

Instead learn to recover, somewhat quickly, from mistakes. If one accepts that mistakes will happen, then the correct mindset should be to develop a process to recover from mistakes.

For Entrepreneurs this is even more important. First, they need to recognize that a mistake was made. If not, they might proceed too far down the wrong path costing them time and resources. Second, Entrepreneurs should train their people to recognize mistakes. Finally, they need to develop a well thought-out process to not only recover rapidly from mistakes, but also to learn from such mistakes and implement internal controls to avoid such faux-pas in the future.

Do the Right Things by recovering quickly and learning from mistakes.

Ravi Patel

http://www.patelCFOservices.com

Fostering the Thinking Process

Entrepreneurs start businesses because they have new, innovative ideas as a result of “thinking outside the box.” They identify underserved niches in the marketplace and find unique ways to fulfill unmet or unrecognized needs.

Do Entrepreneurs, once they start and grow the business, foster the culture of “Thinking Outside the Box” in their employees?

The reason for the Entrepreneur’s original initiative due to creative thinking is also applicable to his/her organization. If the culture of the company is one of innovation and finding unique ways of doing things better and faster, it will promote not only continued success for the company but also tremendous job satisfaction for the employees.

Entrepreneurs should be careful not to create a control-oriented impression that “Thinking Outside the Box” is only meant for them. It gives a feeling of “Do what I say, not what I do.”

Empower your employees and let them come up with creative ways to perform their jobs better and improve processes in the company. Entrepreneurs for this employee performance management philosophy should also think outside the box !

Ravi Patel

Prepare for Growth

Entrepreneurs are mostly focused on growing their companies and would like nothing more than rapid growth. Compared to the alternatives, managing growth is a nice “problem” to have.

However, is rapid growth always good for Entrepreneurs? Not necessarily.

Being ready for and managing rapid growth requires tremendous preparation and infrastructure. In addition to unique product and services and a solid management team, items such as adequate facilities, reliable IT infrastructure, communication systems, developed business processes, working capital lines of credit, access to growth capital, a group of professional advisors (lawyers, accountants, etc.), an industry advisory group or Board, and so on must be in place.

Most Entrepreneurs have a few of these things in place as they expand, but reach a crisis point when certain required elements are not readily available or in place.

While rapid growth is desirable, Entrepreneurs must ensure that they have in place the requirements to manage such growth . Otherwise, rapid growth may not be good for them.

Ravi Patel

http://www.patelCFOservices.com

Published in: on April 15, 2014 at 5:10 am  Comments (3)  
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