The One Skill Every Entrepreneur Must Have
posted by Michael Olafusi , on ,
There is no part of my business that I can't handle myself. I currently have four partners. They are all great people, but integrating and getting started as a strong team takes time especially when we all work together virtually (at the start). Still, as young as the whole team is the realities that affect mature businesses affect us. One of my partners got a job offer and had to reconsider her staying full-time with me. She was very truthful about it all and I put myself in her shoes, and concluded that the other job has a better pay-off. I even helped her prepare for the interview and salary negotiation. It's a loss to my business but it's a manageable one because I can fill-in for what she was doing and she promised to continue as a part-time partner.
Small businesses, like mine, go through five stages of growth according to a Harvard Business Review publication by Neil C. ChurchillVirginia L. Lewis.
1. Existence Stage
This is first stage of every small business where the entrepreneur is trying out his business idea to see if it would work out. He is taking his business plan and heading to the tarmac to try it out. He is interested more in getting convinced that the business idea is sound enough to work in reality.
The major business problems he is seeking solution to are:
a) Can we get enough customers, deliver our products, and provide services well enough to become a viable business?
b) Can we expand from that one key customer or pilot production process to a much broader sales base?
c) Do we have enough money to cover the considerable cash demands of this start-up phase?
At this stage, the entrepreneur does everything and directly supervises subordinates, who should be of at least average competence. Systems and formal planning are minimal to nonexistent. The company’s strategy is simply to remain alive. The owner is the business, performs all the important tasks, and is the major supplier of energy, direction, and capital.
Once the business has proven to be a viable one and is able to get customers, then the business moves to this stage: survival. The focus is now more on cashflow rather than is the idea going to work.
At this stage the business problems become:
a) In the short run, can we generate enough cash to break even and to cover the repair or replacement of our capital assets as they wear out?
b) Can we, at a minimum, generate enough cash flow to stay in business and to finance growth to a size that is sufficiently large, given our industry and market niche, to earn an economic return on our assets and labor?
It is at this stage that the entrepreneur begins to put some structure in place. He begins to delegate more and focus more on the strategic part of the business.
You can read about the other stages in the original publication.
So it is very obvious that for a business to successfully pass through those first two stages the entrepreneur must be extremely hardworking and at all the tasks that concern his business. He must start by doing everything before delegating. And this has been the reason people who work for large multinational companies seldom set up their own business. They are used to having well defined tasks and passing on other tasks.
Taking a business from stage 1 to stage 5 is only possible when you give it all your attention. You can't take a business from stage 1 to stage 5 by running it part-time and hiring a business manager. Starting and growing a business is a 100% effort game. You have to give it your all. And in the beginning it would require doing everything. It is the one skill an entrepreneur must have.