Viewing “Labor Costs” in Business

Post Labor Day, a question for Entrepreneurs – how do you view your labor costs (employees)?

Are they a cost of doing business for you as they decrease your bottom line? When cutting expenses, is that the first thing you think of reducing?

For large labor intensive operations, this might be the case. However, Entrepreneurs might want to view this differently.

If you train your people properly and motivate them adequately, your employees could actually improve your bottom line by increasing revenues, improving productivity or even reducing costs.. View your employees as assets – invest in them to get better results.

It takes a different mindset to get the best out of your people. If you think of them as labor and an expense, then chances are that you don’t always get the most out of them.

Do the Right Things! Invest in your people and help them add to your bottom line.

Ravi Patel

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Published in: on September 5, 2018 at 4:30 am  Leave a Comment  
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Take Care of Your Employees First

“Charity begins at home” means that you should take care of family and people close to you before you worry about helping others.

Does this apply to Entrepreneurs and business?

Most Entrepreneurs and small business owners have a desire to be generous to causes they believe in. It is noble to give back to the community they work and live in.

However, it is important to first take care of matters close to business and then outside. This entails making sure you first address the well-being of your employees. Ensure that your employees are compensated commensurate with their performance, have comprehensive benefits, opportunity to learn and develop their skills,  and well-defined path for advancement.

Giving to charity and noble causes is great, but if you don’t take care of your employees first you might not be paying homage to the “charity begins at home” philosophy.

If you help others without first taking care of your employees, it might be at the latter’s expense and they might resent that. On the other hand, if you take care of your employees first, they might be motivated to join in and participate and contribute to your charitable causes.

Do the Right Things!

Ravi Patel

Published in: on August 28, 2018 at 4:30 am  Leave a Comment  
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Differences Between Inventors and Entrepreneurs

Inventors and Entrepreneurs both have new ideas, some of them quite unique. Yet, both have different perspectives on these ideas.

The “Shark Tank” TV show allows potential Entrepreneurs to pitch their ideas to the investors for possible funding. It is amazing to see many interesting ideas and inventions do not get funded because the person pitching the idea has not figured out how it could be commercially successful.

Therein lies the difference between Entrepreneurs and Inventors.

Entrepreneurs, the successful ones, know the importance of being able to build a business model around an idea and realizing the maximum value of that product/service. Generally they focus on that product/service before embarking on a new project.

Inventors, on the other hand, love to invent regardless of realizing value from their inventions. They keep on moving from one invention to another without thinking through the business aspects of their ideas. They are primarily driven by discovering new things and not money.

All Inventors cannot be successful Entrepreneurs. It is more important for such Inventors to turn over their inventions to business-oriented Entrepreneurs that can create a value for those ideas. Then the Inventors can continue their passion for inventing, hopefully funded by their previous successful inventions.

Ravi Patel

Published in: on August 21, 2018 at 4:31 am  Leave a Comment  
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Create a Strong Foundation

Watching a tree sway with the gusty winds brings forth a business analogy.

To survive strong winds, a tall, growing tree needs to have a strong foundation (deep roots) combined with the flexibility to sway with the gusts instead of being rigid.

Similarly Entrepreneurs need to build a solid foundation to combat competition, market and regulatory forces and changing economic environment. Absent a solid foundation a business might not be able to grow significantly. It would be akin to building a castle on sand.

What are some of the key ingredients to build a strong foundation? It starts with a system to deliver quality products and services repeatedly and consistently. In order to do that one needs a competent and dedicated team of employees and management utilizing robust business processes and procedures. A superior customer service mentality coupled with continuous innovation and improvement adds to the mix.

Just as a tree cannot remain rigid to survive gusty winds, a company must be nimble and flexible to adapt to the changing environment and customer needs to grow the business.

With such a foundation and flexibility not only survival but also significant growth is possible. Have you created a solid foundation for growth?

Ravi Patel

Invest in the Right Things

Businesses require investments. Entrepreneurs are aware of the capital necessary to start a business – whether it is for working capital, machinery, equipment, or so on.

As the business grows more investment might be needed. Are Entrepreneurs investing in the right things? If Entrepreneurs only think of investment in material things, it might be short-sighted.

Long term success requires investment also in softer areas of the business. For example, in order to have consistent results it is necessary to invest in developing robust business processes (not necessarily computer systems). This takes time and resources, but it is a wise investment.

Entrepreneurs need to make similar investment in their people. Identify the key potential people in your organization and invest in them. Urge them to improve their skills, train them in functional areas, and take a risk by giving them projects and assignments that challenge them. Investing in your people, just like other assets, will pay off in the long term.

Entrepreneurs need to identify all areas of their business to determine if they have invested wisely in such areas to generate superior returns.

Ravi Patel

www.patelCFOservices.com

Published in: on August 7, 2018 at 4:43 am  Leave a Comment  
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Managing your Time by Doing the Right Things

Think about time management in another way. If you don’t have time to get things done, are you actually doing the Right Things?

Entrepreneurs, especially early in their careers, often have a tendency to not only do everything themselves, but also focus on doing tasks right – whether they are important or not! This isn’t effective use of their time.

The focus for Entrepreneurs should be to define and do the Right Things and delegate the rest. Once you discover and focus on the Right Things, you will probably have more time to do them. Wasting time on things that Entrepreneurs like to do, being perfect on insignificant tasks, or not delegating steals time from more important things to do for your business. Manage time effectively by changing your thinking.

Do the Right Things!

Ravi Patel

http://www.patelCFOservices.com

Small Steps for Success

Nothing wrong with Entrepreneurs thinking big!

Developing a plan to achieve those big dreams and putting it into action is a requirement, among other things, for Entrepreneurial success.

Some Entrepreneurs want immediate success which is unrealistic. Having sustained incremental progress towards your Mission and goals is a more realistic path to success than hoping for overnight results.

While overnight success stories happen from time to time, the odds are very high against it. Entrepreneurs need to focus on making small, sustained steps of progress to achieve realistic milestones. Celebrate those small steps of success!

Consistent effort and making incremental progress on a realistic timeline might be slower that one wants, but that is ultimately what gets you to your goal.

Ravi Patel

www.patelCFOservices.com

Don’t Give Up

Frustration due to obstacles is common for all endeavors. The successful ones are those who don’t give up, keep on going, and overcome obstacles.

Perseverance is defined as the steady persistence in a course of action, a purpose, a state, etc., especially in spite of difficulties, obstacles, or discouragement.

How appropriate that an Entrepreneur possess this quality to be successful? Facing difficulty, obstacles, discouragement, setbacks and even failures are nothing new for Entrepreneurs.

Entrepreneurs who come through even after facing challenges are the ones who have a laser focus on their Mission and can navigate a steady, persistent course without being unduly discouraged. The story about the spider weaving a web despite repeated failures comes to mind.

If you desire to succeed in achieving your Mission, don’t give up but have perseverance! Your people will be inspired and support your efforts.

Ravi Patel

www.patelCFOservices.com

Published in: on July 17, 2018 at 3:30 am  Leave a Comment  

Value of Good 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. Value such varying perspectives.

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 and value good advice, no matter where it comes from.

Ravi Patel

www.patelCFOservices.com

Published in: on July 10, 2018 at 4:30 am  Leave a Comment  
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Independence for Entrepreneurs

As we are about to celebrate our nation’s Independence Day, a few thoughts on Entrepreneurial Independence.

Entrepreneurs start their own businesses primarily for two reasons. They either believe that they have a better product or service, or they do not want to work for anyone else. The latter is born out of a desire of having their own independence.

As they grow their companies, Entrepreneurs lose their independence because they cannot effectively manage their businesses and/or get into a financial bind. In such cases someone else has to come to lead the company or exercise financial control (through investors or lenders), depriving Entrepreneurs of their independence.

How can Entrepreneurs maintain their independence?

First, understand one’s limitation in managing the business and build an effective management team to adequately complement the Entrepreneur. An enlightened Entrepreneur might even have to hire a CEO or COO to lead the operations of the company while the Entrepreneur focuses on his/her core strengths.

Second, pay attention to the financial strength of the company. Manage the growth and cash flows effectively such that lines of credit and borrowing are sufficient so as not to dilute equity. Even if equity capital needs to be raised, go for it when the value of the company is high enough so that the Entrepreneur can retain the majority stake.

Entrepreneurs can maintain their independence, but they have to work at it.

Ravi Patel

www.patelCFOservices.com