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

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Published in: on August 7, 2018 at 4:43 am  Leave a Comment  
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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

Are you Investing in the Right Things?

All 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. If the Entrepreneur only thinks of investment in material things, it might be short-sighted.

Long term success requires investment 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 appropriately in such areas to make them generate superior returns.

Ravi Patel

www.patelCFOservices.com

 

 

Published in: on September 24, 2013 at 4:57 am  Leave a Comment  
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Doing it Right the First Time

How often have we heard the maxim of “Doing it Right the First Time?”

The intent of this thought is referring to the quality of the process people should use to accomplish things. The goal should be to use an efficient, high-quality process such that the resulting product (in the broadest sense) is totally complete requiring just about no changes. This is an ideal goal for everything we do.

For Entrepreneurs, it also provides a different perspective that is critical to their ventures.

Since Entrepreneurs have limited resources – money and time –  doing it right the first time means even more. If Entrepreneurs do not do certain things right the first time, they might run out of resources or opportunities to do it again or over. Or, having not done it right the first time might be too costly for them.

In addition to product or service development, other examples of doing it right the first time could be in:

  • negotiating legal contracts
  • rolling out high-priced marketing programs
  • hiring key people
  • making presentations to investors
  • selling to customers
  • signing up for leased facilities

The examples are by no means exhaustive, but the key point is that Entrepreneurs need a process to ensure that whatever significant or critical activity that they are trying to accomplish goes through proper scrutiny, such that costly errors and omissions are mitigated.

There is never a perfect process, but the more you make it closer to perfect the better the chances of doing it right the first time.

Do the Right Things!

Ravi Patel

www.patelCFOservices.com

Trust, but Verify

President Reagan has been attributed with this famous philosophical statement in connection with the nuclear arms treaty with the old Soviet Union.

What can Entrepreneurs learn from that?

As Entrepreneurs start building a solid leadership team for growth, they have to rely on and trust their key management personnel. But is that enough to ensure superior performance and growth?

While trusting the leadership to do the right thing, the Entrepreneur must also oversee the building of management reporting systems that independently verify the progress made by the company in established metrics. Such systems should have checks and balances to ensure that verification can be relied upon.

Trust is essential, but verification is paramount for long-term success. This is similar to a previous post on People or Process Dependency. Trust is people based; verification is process based.

Entrepreneurs, trust your people but do have verification systems in place.

Ravi Patel

You Can Improve Only What You Measure

Entrepreneurs might have heard this expression before. What does it imply?

As discussed often in this blog, implementing solid business processes is crucial for superior performance and growth. But, how does one know that the processes are continuously improving?

Do you have metrics in place to evaluate how well the processes are functioning? Have you identified and picked the relevant metrics? Are the measurements timely and widely communicated? Do you analyze the results and brainstorm ways to further improve the procedures?

If Entrepreneurs do not have effective measurement systems for their business processes, it will be difficult to analyze and improve your performance.

Ravi Patel