Three most common predicaments of an early stage entrepreneur
Every year I have the privilege to meet several entrepreneurs across the globe. Some have been there for a few years while others are still aspiring to build their success story. In my book “Make A Difference” I have covered the basic check list which an intending entrepreneur must clear before risking a working career and / or their hard earned money. And for those who have crossed that check list, the challenges continue! And here are the stories
This story assumes that the entrepreneur already knows the product and its market. Now is the time for Building (a) Better Business out of that product and the market. How does he do that? What are those common predicaments? From my experience of speaking to or engaging with over a thousand owners or their senior management every year, I could find three major areas where an early stage entrepreneur gets stuck, and looks for expertise.
Funding & Financial Impasse
“I have an idea with very good potential, I need funds for execution!” or “I have brought this business to this level and now to upscale it I need an investor or bank funding!”
We all have ideas at various stages in life, what distinguishes us as an Entrepreneur is when one starts building that Idea into Innovation. Now, when you start doing that, the first thing that one needs undoubtedly, is #Money! The reason I am sure that this will resonate with every entrepreneur is because that’s the crux of my interaction with 1612 entrepreneurs around the world in 2017/18.
Most entrepreneurs want to know where will I get #funding from? Will banks give me the money? How do I choose my bank amidst the crowd that I see? Will I get funded by an investor? What are my risks?
Again, when it comes to expert advice on matters financial, it is not just funding. A significant number of early stage entrepreneurs lack basic knowledge of what a financial statement looks like, what it comprises, what is the significance of each item there and the impact will it have on my funding? While there are many CAs that would take care of this, the entrepreneur is often confused on who is the CA, I must chose and why? Many times, they just chose a friendly guy in the neighborhood and often land up making a wrong choice. Who is my best choice and why, is a question that every discerning entrepreneur asks or must ask!
Another indirect, but important, financial aspect which many are unaware or less aware is, “What kind of an insurance do I need?” Do I need additional life insurance as an entrepreneur? Why? And then how do I chose the insurance for my assets, office, machines, software, equipment, inventory?
Almost all entrepreneurs use one or the other credit card. Most of the times the choice is based on factors like what is available or who called me first. Both could be wrong ways to choose and could have a serious impact on your financials. There are intricate differences between various cards. How do I pick the right one that's best suited for my needs and at the lowest of hidden costs. Same thing goes for Vehicle and personal loans.
One last item here is the choice of getting the right business plan / project report made. While most of the times your CA can offer to make it but keep in mind you need a Business Plan - not a financial plan. So choose someone that knows making sensible business plans. There are many in the market. Decide based on a research on who is your best choice and why.
Business Process Dilemma
"How can I create a system that will solve common problems of my business?”
After funding, the major challenge entrepreneurs have been facing is to put the right systems in place. The result is that most of them land up doing everything themselves or through a small crew of less experienced people. There are technology driven solutions and process that they are not even aware of. And even if they are aware of the same, they can't decide between two vendors.
Take the case of human resources.. These days an entrepreneur need not really employ people for jobs like payroll, leave records, legal compliance, recruitment, etc. Everyone tells you that these can be outsourced or you can buy an #HR software; but how does an entrepreneur decide which is the right agency or software for them? Someone needs to tell him who and why?
Same thing goes for, let’s say social media marketing, online purchases, purchase management and so many other solutions that a business needs to be competitive in current scenario. "Who is the genuine market player for #technology solutions? I need a CRM, and ERP, can you refer someone?"
I am often requested by solution providers to give them leads. And people who have asked me know that I don’t do referrals. But yes, I acknowledge that with so many business solution providers, it can be tough to access their credibility and authenticity unless you meet each one of them personally, and that, may I say is neither economical nor logical!
The entrepreneur needs to get hold of the right solution providers and needs to know the parameters based on which the best choice can be made.
To execute even a simple solution like mass Emails / SMS /Whatsapp campaigns to sell their products comes second, many entrepreneurs don't even know that such services are available and those who do, have little know-how to differentiate between many that are there in the market.
I have met a significant number of entrepreneurs where I felt that the product or the company could be better marketed through a good Video or and Corporate Film, but even if they agreed - they didn't know how to choose between the wedding video services and a professional business film producer.
An important solution available today for entrepreneurs in the form of Co-Working spaces, was not known to as high as 73% of the entrepreneurs when I asked them if they know of this option to cut down their office establishment costs. And those that did know, had apprehensions which can result from a lack of knowledge of having seen one.
“I need help ”
Whether a recent or an early stage enterprise, one thing that I found true in at least 80% of the cases was that they lack professional management in the organization. This is mostly due to lack / quality of training, coaching or mentoring. Contrary to a normal belief, everyone likes to learn but an entrepreneur needs to learn and learn from the right source!
Now, the million dollar question is how does an entrepreneur choose from thousands of people that give themselves titles like #Business Coach #Mentor #BusinessTransformationAgent etc? Do they have anyone vouching for them? The entrepreneur wants to know what you will deliver for them. Will you put your skin in to it?
Personally, I was pursued for nearly 6-7 months by a gentleman for strategic guidance for which I devoted nearly 2 weeks, and the most amazing thing happened after that! I saw the LinkedIn post by the same person which had the title Business Transformation Consultant & Startup Mentor. Made me smile and in a way proud!
The trainers, coaches, mentors, business consultants show the entrepreneur the real value of these services and how it can benefit the enterprise in the short, medium and long run. There can be no doubt that is a clear need of an entrepreneur.
The internet is full of data on how 90% of the new or early stage entrepreneurs fail. I won't challenge the data. But I firmly believe that it is the duty, and an opportunity for the experts and providers of these three areas, to show the ROI of their services to the entrepreneur to help him be a part of the 10% that succeed rather than the 90% that don't.
If you are an early stage #entrepreneur and wish to know the answers or are an #expert in any of these areas and want to share your answers, please feel free to contact me on How to Build Better Businesses.
Thanks for your time !
ravinder dot bhan @ tpsworld dot com