Business

What does it take to be a proactive entrepreneur?

/ Leadership, Business

The term proactive, as most of us understand it, refers to taking action in advance to deal with an unexpected problem or difficulty. Proactivity at work enables a person to act quickly and take responsibility in order to prevent problems from arising. This anticipation aids in reducing workplace stress and maintaining a pleasant organisational climate. Proactive person does not expect their leaders to notice a problem and incubate solutions. 

There are many examples that demonstrate this concept.

Notice that when a company conducts a customer survey on its products or services, what is it actually doing? It is taking proactive steps to improve the service it provides to its customers.

Consider another example: a city is taking a proactive approach to crime prevention by hiring more cops.

A proactive person, according to Bateman and Crant, is someone who takes action to influence environmental changes. A proactive entrepreneur will first identify opportunities before taking action and persevering until they have reached a conclusion by bringing about meaningful change. Merriam-Webster defines it as “acting in anticipation of future problems, needs, or changes.”

Being proactive means focusing on what’s important, not just what’s urgent. Proactivity is a vital part of creating massive success, and it’s the only way to reach your full potential.

A reactive (rather than proactive) person is at the mercy of time constraints and outside influences. Because the sense of urgency frequently trumps the sense of importance, many of us spend our days stuck in an endless loop of promptly responding to irrelevant emails, agreeing impulsively (without giving it much thought) to routine meeting requests from stakeholders, and attending to a variety of other unimportant (but urgent) communications/activities. 

However, keep in mind that proactivity always outperforms reactivity.

After all, reactive tasks are self-evident; these are the urgent day-to-day chunks that most people do automatically. And it’s not that reactive tasks don’t need to be completed; it’s just that they don’t have to be completed right now, and they don’t have to be completed by you.

Proactive tasks, in comparison, necessitate more thought and effort. They are the projects that have a significant impact on your company; the great ideas you’ve been putting off until you “have more time.” These tasks could include creating a compelling list of reasons why a specific feature is important for your product to move the company in that direction, or writing a blog post to develop thought leadership in your market. 

In a nutshell, proactive tasks are strategic initiatives that bring you significantly closer to achieving your goals. 

“Proactive people focus their efforts in the Circle of Influence. They work on the things they can do something about. The nature of their energy is positive, enlarging and magnifying, causing their Circle of Influence to increase.”

Stephen R. Covey,
The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change

So, what does it take to be proactive?

In a word, discipline. 

Here are some of the reasons why self-discipline is so important: 

The world will put your resolve to the test the moment you begin incorporating proactivity into your life. Emergencies will arise, demands will rise, and you will be tempted to revert to ineffective, reactive behaviours. So, You need unyielding self-discipline to stay proactive in a reactive world; you can’t always control your circumstances, but you can manage your response. You have the option of remaining proactive.

Not only that, you will be confronted by procrastination. Procrastination leads to pressure, which leads to stress, and stress severely limits your brain’s creative processing abilities. As we all know, creativity is an essential component of proactivity; therefore, procrastination renders you incapable of being fully proactive.

References:

  • Ewers, Patrick. “How to Be Proactive: A Guide for Entrepreneurs | Better Humans.” Medium, 25 Jan. 2022, betterhumans.pub/the-definitive-guide-to-understanding-proactivity-and-becoming-a-proactive-entrepreneur-558ecf3a755d.

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How much does perception matter in business?

/ Business

Before starting a business, an entrepreneur must form an opinion about all major aspects of his or her venture. Setting such a perception is critical regardless of whether you are pursuing a commercial venture for economic profit, a not-for-profit business, or social entrepreneurship. Setting a genuine perception for your future venture will also work wonders for categories such as consultants, educators, homemakers, and others who are considering starting their own businesses now or soon.

It is only natural to wonder what role perception plays in business growth. If applied and used correctly, it can play a significant role in assisting the business to grow and survive in the market. It gives the company a new perspective that will help it thrive in the future and develop leading business opportunities. It is critical to always keep in mind what perception you are projecting.

In business, perception is extremely important. It is important for you to know whether your customers perceive you as cheap and nasty or exclusive and expensive. Are you perceived as an expert and experienced professional, or as a novice with no idea what you’re doing? Perception has far more implications than we can imagine. It has a significant impact on how we define and do things in our social, personal, and, of course, business lives. It is a crucial aspect of business, especially when it comes to marketing.

The company must ensure that its advertisements are relevant enough to persuade the customer (without resorting to any kind of manipulation or trickery). We want to highlight our best qualities in order to present ourselves in the best light possible.

One of the key factors that influence consumer perception is exposure to the products. Naturally, if a customer has more knowledge about a product and is satisfied with the information provided, they are more likely to buy it rather than something they haven’t heard about or seen yet. This is where publicising a company’s offerings comes into play. Educating our customers is an important aspect of marketing, perception and effective selling.

Furthermore, when manufacturers of goods and services include appropriate guarantees and warranties with their offerings, it reduces customers’ perceptions of risk, especially if the item is expensive or large.

Finally, once a customer has purchased a product, it is the responsibility of the business to ensure that the customer is not lost. The company must maintain a positive reputation and foster brand loyalty. One way to accomplish this is to provide better customer service, which helps to maintain the perception that the company cares about its customers’ needs. In this way, the customer develops loyalty to the company, generating a consistent revenue stream and making it more difficult for competitors. The customer must believe that they are valued and cared for.

Here are some real-world examples of how perception plays a role:

If your company uses Hotmail or a free email account, it indicates that it is not professional, established, or serious about business.

If you have homemade or low-cost business cards or flyers, it indicates that your company is low-cost, that it is your new hobby, and that the business has not been properly set up.

If your company is not GST registered, it is safe to assume that it is small (or that its annual revenue is not huge).

If you are late for appointments or do not show up without prior notification, it demonstrates that you are disorganised.

If you are consistently late, it demonstrates that you do not value time.

If, on the other hand, you are immediately available, it indicates that there are few clients and that the workplace is quiet because there isn’t much business. The perception may cause them to doubt your ability and capabilities.

If there is no website, it appears unprofessional or uninterested in business.

If your documents or website are riddled with errors, it gives the impression that you don’t care enough about your company. “Will you care about me as a client?” it implies.

If there is a wait for an appointment with you, it indicates that you are busy and must be working hard.

If everything that you do insists on paper, i.e., if your workflow is overly paper-based, you are sending the message that your workplace has not embraced technology and is is behind the times.

I hope this article was useful to you. How much do you think perception actually matters in the workplace? Is it 50% or is it 90%? Let me know in the comments below.

Let me end this with a quote by Tom Peters, an American Business Author:

“Customers perceive service in their own unique, idiosyncratic, emotional, irrational, end-of-the-day, and totally human terms. Perception is all there is!”

References:

Stone, D. (2017, May 15). The Importance of Perception in Business. Donna Stone. https://www.donna-stone.com.au/perception-importance-business/

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The spirit of an entrepreneur

/ Business, Motivation
Do you have what it takes?

I have always believed that anyone can be an entrepreneur! But entrepreneurship is not for everyone!

Let me elaborate: Anyone from any background or skill level can be an entrepreneur. A vada pav-wala can have an astute business sense developed through experience. A homemaker can also run a successful business and tackle the ups and downs of her venture. The MBA textbooks and theories hold little consequence in this regard.

Having said this, not everyone is cut out to be an entrepreneur.

So, what traits make an entrepreneur different from the rest?

In this post, I want to impress upon my readers specific values that one can imbibe to become a great entrepreneur. I think the following maxims represent the entrepreneurial spirit…

A failure is nothing but the postponed success

What every entrepreneur needs to understand is that failure is part of the journey, not an end. Entrepreneurs with a strong commitment and dogged determination to succeed in their business should not worry about failures. If you see successful businessmen and their career paths, you will see that they carry the attitude – “I did not fail; my project failed.” Essentially, they are serial entrepreneurs, moving from one business project to the next. You can always rework your business/project idea and identify a different business opportunity. Many entrepreneurs have learnt from their failures, redefined their projects or business opportunities and have moved on.

Only excellent people can create an excellent business

As an entrepreneur, you have to invest time in people. You have to develop a work culture that fosters collaboration and innovation. The first and foremost suggestion I would give you here is that you must be choosy about selecting people who will join you in your start-up journey. These are the people who are going to work and grow with you. You must develop an effective team of qualified and competent persons with the necessary skill sets, exposure, and experience. Later on, you should not leave any stone unturned to build an efficient and effective team of committed, dedicated, and self-propelled employees and provide them with quality resources so that they can perform at their very best. As you coach, counsel, and encourage them, you must also hold review sessions from time to time. This will give you the opportunity to pay special heed to their training and re-training needs.

Being ambitious alone is not enough

You are an ambitious entrepreneur. You have tremendous enthusiasm and zeal to make a success of your entrepreneurial venture. But then these attributes alone may not ensure your business success. You have to put in the work and apply strategic thinking at various points in the journey. Apart from your bubbling enthusiasm, energy, and fervour, you will be required to set a business plan and develop discipline in order to stay on track, so you can eventually make a profit with your business.

I hope this post gave upcoming businesspersons some food for thought. Let me know in the comments down below: What maxim/ motto strengthens your entrepreneurial spirit?

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The Basics of Building a Business

/ Management, Business
The building blocks of business

As regular readers of my blog are aware, I serve as a consultant to a few business owners. My job entails advising and assisting these clients as they launch their businesses. It also entails giving the CEO or other top executives advice regarding their daily operations. It is an engaging and challenging task! I thoroughly enjoy it!

In this third inning of my life, I have been dreaming about working closely with young minds. It has been my goal to reach at least 1 lakh students and entrepreneurs and share my passion and expertise with them. With that in mind, I’ve been considering how to communicate with more aspiring business owners and providing them with information on the fundamentals of managing a company. To reach a younger audience, I have distilled my lectures into these five basic tips in this post.

Tip 1: The Entrepreneur must have goals and objectives that are clear.

The bigger vision, yearly mission statements, goals, and objectives of an entrepreneur’s business or initiative must be very clear. More importantly, all employees of the organisation who work in various divisions, departments, branch offices, etc. must be made fully aware of these. The word SMART, which stands for specific, measurable, agreed upon, realistic, and time-bound, best describes these goals. For every entrepreneur, these goals will be different, depending on their specific project or stage of business.
Let me give one or two examples to demonstrate my point. For an entrepreneur who is implementing a real estate project, the objectives would ideally be controlling the timeline, project cost, and scope of activities. For another entrepreneur who is managing FMCG operations – these objectives would be related to the cost of production, product and process quality, speed of delivery (to minimise the lead time for the customer), flexibility, and dependability.

Tip 2: Resist the temptation to borrow more

For first-generation entrepreneurs embarking on their entrepreneurial journey, it is prudent to begin with a micro or small business with 100% equity raised from savings, with financial assistance from family, relatives, friends, and associates. Since a first-time entrepreneur is still learning to manage finances, borrowing would add to the stress and increase risk. Borrowing from banks/DFIs (by mortgaging your property as collateral) should be avoided as a general rule unless and until you have mastered the art and science of handling money and making money from money.
The advice I give to first-timers in general is that they should start a micro or small business first. Check their tenacity for business risks, grow their business slowly in modules and eventually with baby steps consolidate the company over a period of 6 to 12 to 18 to 24 months. This would be an ideal strategy. This technique will work wonders for them in the sense that it will enable them to learn and make money at the same time. Additionally, it will protect them from unanticipated dangers, and in the event that they do, the damages will be within reasonable bounds.

Tip 3: Build experience first, then jump into riskier waters

As the company grows and the size of your business expands, then the entrepreneur can create an additional equity pool. Ideally, they should start with the people they know. The first resource is to reach out to classmates who have completed their professional degrees with the businessman for help. One could also get in touch with the major suppliers of machinery and raw materials of their business or other business associates. There are many alternative ways such as bootstrapping, crowdfunding, and so on. Eventually, the entrepreneur would have gained sufficient experience and mastered the art and science of effectively managing all of their resources (particularly financial resources). This experience is required to learn how to create the necessary value addition from their business operations. Once this experience and rigour are achieved, they can always seek a secured loan from a bank or a development finance institution (DFI) and make somewhat riskier business decisions.

Information helps take prompt action

Tip 4: In the digital age, information is an important resource.

The entrepreneur must also create proper systems for information flow within and outside the organisation. This systematic collection, organisation, presentation, analysis, and interpretation of all available data and information will facilitate good decision-making within the organisation. This simple task will result in the initiation of timely actions. An effective and robust MIS (Management Information System) should also be developed and implemented to ensure that all employees and key executives benefit from all important top-down and bottom-up communications. An effective MIS also ensures the organization’s long-term success through effective management control.

Tip 5: Develop world-class business processes

The next step should be to choose world-class business processes. These processes should be created and validated with the assistance and support of various domain experts both inside and outside your organisation. Process or activity flow charts should be created as needed and made available on your intranet for access and retrieval.

I hope this helps young entrepreneurs visualize the challenges and the road ahead for them at whatever stage of business they are in. If I have missed a crucial point, let us discuss them in the comment section below for the benefit of others!

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India needs more and more Entrepreneurs!

/ Business, Motivation

Having worked for over 4 decades in business at various locations in India, I am really passionate about this topic. From my varied experience in corporate planning, business idea generation, project identification, project finance, preparation and execution of business plans, entrepreneurial development, general management, marketing, and strategy, I strongly feel that entrepreneurship is very lucrative. The only way to tackle the unemployment problem of our country is to create more and more entrepreneurs. A vast and vibrant network of entrepreneurs, intrapreneurs, freelance advisors, consultants, and mentors together with qualified, skilled, and committed executives employed in all kinds of organizations across the length and breadth of the country can significantly contribute towards achieving three laudable national objectives – sustained economic progress leading to tremendous growth in GDP, environmental sustainability, and fulfilment of various social and governance goals.

I am now 73 years old. Most of my time is spent on educating and guiding youngsters. I am engaged in either teaching undergraduate and post-graduate management students or advising and motivating ambitious young males and females on planning and execution their dream businesses/projects. My dominant agenda at this juncture of my life is to convince, motivate, guide, and prepare young people to start something on their own rather than opting for a 9-to-5 job. They can either work as a freelance professional or take up the entrepreneurial (or intrapreneurial) route. They can start any business or remunerative activity either by working as an agent of an established large enterprise or as a franchisee.

Entrepreneurship is not only a financially rewarding prospect, but it is also an intellectually stimulating and uplifting journey. Starting a new business or a social enterprise is thrilling and intimidating at the same time. The delight of boarding on a new expedition, mapping a new path, being self-sufficient and in control, the possibility of accumulating substantial personal wealth, solving peoples’ problems, meeting those unmet needs of society, and making the world a better place to live are all reasons to look ahead with great excitement and hope. For some people working in a 9 to 5 job feels monotonous and stifling, while some thrive in the structured environment. But if you are the former, entrepreneurship is for you.

Let me give below several reasons why entrepreneurship should be promoted in a big way in India and why all young people should opt to become entrepreneurs:

Tackling Unemployment:

Promoting entrepreneurship is a sure-shot strategy to create more and more employment opportunities in the country. As more and more entrepreneurial clusters/pockets get created, many new job opportunities will be generated. Smart and educated young persons residing in cities/urban areas can also promote entrepreneurial units in nearby villages/rural areas on a remote-control basis – visiting their promoted unit once or twice every week.

Rural Entrepreneurs:

Promoting micro and small enterprises in rural pockets of India by small artisans, SHG groups, and other aspiring young persons should now be a national priority and relentless efforts must be made to achieve this goal. To involve people from lower-income groups in entrepreneurial activity – the development of the cottage industry can work wonders! However, this will require help and support from the state governments. Special emphasis should be given to the promotion of those businesses that focus on providing education and healthcare (including health education) to village folks.

Balanced Regional Development:

The Central and State Governments should be actively involved to ensure that all our initiatives to promote entrepreneurship are adequately broad-based to cover all metro towns, big and small cities, and semi-urban, rural, and micro interiors. No region – howsoever small should be left out. To intensify our efforts in this direction, we may also rope in state-level developmental agencies like SFCs and SIDCs and others. These efforts will go a long way to ensure balanced regional development across the country and to prevent the migration of rural workmen to bigger cities in search of employment.

Income Generation & Wealth Creation:

Promoting your own business or industrial unit helps you in earning great profits and generating wealth for you and your country (by contributing to the national GDP). Besides achieving exponential growth in your business and becoming rich over the years – you are also becoming a salary and wage provider to so many executives, staff, and workers employed in your unit. This is no doubt a great feeling of satisfaction and helps you to realise your self-actualisation need.

As an entrepreneur, you control your destiny:

As an entrepreneur – you enjoy so many benefits and privileges which are a far cry from a 9 to 5 job situation. Here, you are your boss. Nobody will get in the way of your vision. You make your plans and schedules. You pick your clients and projects. You pick your team. Owning a business allows you to support local charity events, local schools, and non-profit organizations. Being able to make a difference in your community is a great feeling. Being an entrepreneur is anything but monotonous. There are always fresh business prospects to dive into, new ideas to brainstorm and execute, and new individuals to collaborate with. Being an entrepreneur is a never-ending rollercoaster, but if you enjoy what you do, it’s a thrilling journey with new challenges every day.

There is no harm in being an Employee:

Many young males and females are not at all interested in starting their businesses. This category of persons can jolly well go for the “9 to 5 job route”. There is no problem with this because for the industry to thrive we need both entrepreneurs and employees. Such persons can always go for additional income by investing their savings in well-performing companies or in the start-up projects of other entrepreneurs. Those whose salary is very high can also become non-executive partners/directors in businesses promoted by other entrepreneurs. I can cite an interesting example here where a person is employed in a 9 to 5 corporate job and his/her spouse is an entrepreneur!

Finally, I would like to conclude by saying that entrepreneurs are innovators! Think of all the new technology and ideas that have come to life over the past few years. Those were all once just an idea — but amazing entrepreneurs brought those ideas to life. Doing what you love is the best part of being an entrepreneur. When you’re working with people you enjoy and are doing things that inspire you, it is just easier to get up in the morning with a smile on your face. This is what makes starting a business worthwhile. Creating a successful brand to the point where it leaves a personal legacy behind is appealing and serves as motivation for many entrepreneurs.

So I hope I have convinced you with my passion and sound arguments! Comment below with your thoughts on the subject!

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Nurture creativity in your business

/ Business, Management
Creativity in Organizational Teams

As little children, we all were very creative, but our creative instinct started getting eroded as we grew older. To remain creative, we must try out new things, learn to fail and re-learn from each failure, and always try to take the path that was less travelled. We can learn to be creative in many different forms. Remember that if you want something which you have never had, you must do something that you never did. Creativity is one of the most important traits we possess as human beings – and this trait can lift our personal and professional lives by several notches. 

What does it mean to be ‘Creative and Innovative’?

We can understand creativity as the ability to create, bring into existence, invent into a new form, produce through imaginative skill, or bring into existence something new. Creativity is the capacity to produce novel ideas by fusing, modifying, or repurposing old ones. Every idea is the result of creative thinking, and every product is an idea made real. Why do we want to be creative? The objective is mainly to enhance comfort and convenience or to increase productivity and efficiency. Whatever the objective, thinking is a crucial skill for all successful businesspeople. The celebrated human discoveries are not by chance. It was an abstract thought that originally existed only in the mind of the thinker. Men and women used their creative thinking to produce tangible results.

Creativity involves many people from different disciplines working effectively together to solve a great many problems. 

It requires talented people to work effectively with one another. That requires respect and trust, both of which must be acquired over time. It cannot be mandated by managers. What we can do is create an environment that fosters respectful and trusted interactions that encourages everyone to express their talents. If we do that well, the outcome will be a thriving community where talented individuals are devoted to one another and their shared work.

The definition of innovation is the addition of something new to an established process or product. The successful application of novel concepts is innovation. All invention starts with original thought. Innovation is the result of creativity. The implementation of creative inspiration is innovation.

Joseph Schumpeter, a political economist, believes that the concept of innovation to create a new commercial product or service is the crucial force in creating new demand and thus new wealth. Innovation creates new demand. Who brings it to the market? None other than entrepreneurs! This revolutionizes the existing markets and creates new ones, which will in turn be disrupted by even newer products or services.

No doubt, the current economic environment is a volatile and violent one. The new environment demands renewed dynamism of approach and only a few organizations can manage the changes inherent in the new environment. Entrepreneurs must keep their organisation lean, young, flexible, and eager for new things to continuously delight the customers, which is the purpose of every business.

How to Nurture Creativity in Organizational Teams?

Having understood the concept and importance of creativity and innovation, let us now explore how we can inculcate the spirit of creativity and innovation in our corporate teams – particularly in the first-generation entrepreneurial endeavours/projects.  

Creativity is very important to organizations and to organizational teams that want to solve new problems, fix current ones and be innovative in their industry. Look behind any creative success story and you’ll usually find a great team, a group of passionate people who raised each other’s game. 

Here are a few suggestions to help you boost the effectiveness of your team and to inculcate the spirit of creativity among team members:

Use the power of brainstorming

Encourage your employees to brainstorm to generate new ideas. You can brainstorm effectively by taking breaks and removing yourself from the office.

Create diverse teams

Assemble a group of employees who don’t usually collaborate, who have a different set of strengths and weaknesses and who come from different backgrounds. 

Reward great ideas

Let your team vote on the best ideas that come out of your brainstorming sessions. You can even give the winner a prize as an incentive for employees to put more thought into their ideas.

Give them big open spaces

Create an open and spacious environment so your team is relaxed by removing as much clutter as possible. Cubicles won’t create a collaborative environment, so try and avoid those if possible.

Make sure your top management supports creativity

Your employees will take risks if they know that you support them. If they know their ideas won’t be considered, then they won’t try to come up with them and no change will take place. Don’t penalize employees for taking risks and thinking outside of the box – embrace it!

The presence of others can boost performance

One of the earliest findings in social psychology was the “social facilitation effect” – the way the mere presence of other people engaged in the same task as us can boost our motivation. 

What are some features of successful, creative teams?

A familiar team has benefits like a home stadium.

Everyone knows that sports teams enjoy an advantage when competing in their home stadium’s familiar surroundings. Consider a 2006 Harvard study that showed the performance of heart surgeons improved over time when working at their main hospital surrounded by their usual team. 

Virtual teams can outperform face-to-face teams

In 2009, a research team led by Frank Siebdrat assessed the performance of 80 software companies worldwide and found that more dispersed teams often outperformed “co-located” teams.

A balance of extroverts and introverts makes for a better team

While extroverts will grab your attention and showcase their abilities, you might need to search a little harder to spot the talented quiet types. But don’t go too far the other way and ignore extroverts — a balance of complementary personalities is often the most effective mix.

Most good teams have one analytic thinker on board

Team members with a big picture thinking style are great for brainstorming and creative problem solving but when it comes to idea execution a study published this year suggests it’s a good idea to have at least one focused, analytic thinker on your team — that is, someone who can focus on the details of your project.

Teams perform better when they include both men and women

In 2012, Credit Suisse published an analysis of nearly 2,400 international companies, finding that those with at least one woman on their boards tended to be the strongest performers. The benefits of having both men and women in the controlling team were especially apparent in tougher operating conditions and were attributed by the report authors to issues such as better team diversity and a balance of leadership skills.

There’s a danger of teams splitting into sub-groups

A study led by psychologist Doris Fay investigated this problem in the UK’s healthcare system. Fay found that diversity was a bonus – multi-disciplinary teams produced better quality innovations than more homogeneous teams – but only if certain processes were in place to help prevent internal splits. 

The best teams communicate outside of formal meetings

Researchers at MIT’s Human Dynamics Laboratory have found conversations outside formal meetings are the most important factor contributing to team success. There are simple steps we can take to increase these valuable encounters, including scheduling coffee breaks so that all team members get to chat with each other and planning social events.

I hope this researched article provided you with some practical tips to nurture creativity in your teams. Tell me what features are already present in your workplace or business, and what has scope for growth.

References:

  • Campbell, Ed. “How Pixar Fosters Collective Creativity.” Harvard Business Review, Harvard Business Publishing, 25 Feb. 2019, hbr.org/2008/09/how-Pixar-fosters-collective-creativity.
  • Akanbi, Sheu-Usman & Iortimbir, Aun. (2015). Creativity and Innovation in Entrepreneurship. 
  • McGowan, Robert. “Innovation, Creativity, and Entrepreneurship.” Journal of Entrepreneurship & Organization Management, vol. 01, no. 01, 2012.

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Practical advice for young entrepreneurs

/ Business

Today, I wanted to take the opportunity to address young, enthusiastic entrepreneurs. This is a lesson I learnt from my life experiences the hard way, and I am always generous with such advice because I hope my mentees and students will learn from my mistakes. You can read many such stories from my life in my book, “Entrepreneurship: The Mega Opportunity”. 

However, this post may be more apt for first-time entrepreneurs and qualified professional entrepreneurs who have resigned from their cushy jobs to enter the business world. There is a tendency among such enthusiastic newbies to get into a vicious trap because they are so purely driven by their ambition to grow fast and become rich overnight. Although ambition is not a bad thing, over-ambition can prove costly!

What do I mean? When novice entrepreneurs begin their journey, they borrow heavily out of sheer enthusiasm to take advantage of the higher financial leverage and consequent quick growth. Such youngsters most often land in trouble! 

What happens is that, apart from paying higher interest on their huge borrowings, such entrepreneurs also spend lavishly spend on swanky offices, cars, overstaffing, advertising, promotion, and other items. Although, there is no harm in building up all such expenses if these are in accordance with the original business plan and can be absorbed in the projected cost of production. 

But you can imagine how most of the time, many such expenses are not justifiable when you look at their original business plan, but then these are done because of lifestyle reasons or the ego of the main promoter/ entrepreneur. 

Expenses which result in improvement of the value chain can offer a competitive advantage to the firm and result in an improved bottom line through higher value addition should be welcome. However, one must exercise adequate caution against random and unplanned (at times arising from the entrepreneur’s whims and fancies) expenses that only erode the bottom line.

In short, my advice is: “Ambition is good but then do not overdo it.”

But the monk Tenzin Palmo put it more succinctly: 

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16 reasons why you should be an entrepreneur

/ Business, Motivation
Entrepreneurship is not only a financially rewarding prospect, but it is also an intellectually stimulating and uplifting journey!

Starting a new business and/or a commercial or social enterprise is thrilling and intimidating at the same time. The delight of boarding on a new expedition, mapping a new path, being self-sufficient and in control, the possibility of accumulating substantial personal wealth, solving peoples’ problems, meeting those unmet needs of the society, and making the world a better place to live are all reasons to look ahead with great excitement and hope.

For some people working in a 9 to 5 job feels monotonous and stifling, while some really thrive in the structured environment. But if you are the former, entrepreneurship is for you.  

Let me list down some compelling reasons why you should be an entrepreneur.

Reason 1.  You have full control over your destiny. 

You call the shots and make the decisions that ultimately determine the success or failure of your business. Nobody will get in the way of your vision.

Reason 2. You are your own boss

You get to decide what you want to do, how you want to do it, and who you want to do it with. There’s something amazing about being able to say you work for yourself. Did you not like the way things were done at your previous job? You could do it your way with your own company.

Reason 3. You make your own plans & schedules.

Are you an owl or a lark? I mean, do you prefer to work late into the evenings or bright and early at 5 am? When you’re your own boss you get to decide when you want to work.

Reason 4. You pick your clients and projects

You have complete control over the types of clients you want. Once you’ve created your own business, you’ll be able to turn down clients and projects that aren’t a good fit for you and focus on those that do.

Reason 5. You pick your own team

As captain of your own ship, you pick who to invite aboard! If you want a young crew or experienced professionals, you decide what works best for your project.

Reason 6. You become a provider.

 As an entrepreneur you will become a provider for many. Your employees will depend on your leadership and decision-making, as it will directly impact their livelihood and well-being. 

Reason 7. Opportunity to give back. 

Owning a business gives you the opportunity to support local charity events, local schools and non-profit organization. Being able to make a difference in your community is a great feeling.

Reason 8. Every day is different

Being an entrepreneur is anything but monotonous. There are always fresh business prospects to dive into, new ideas to brainstorm and execute, and new individuals to collaborate with. Being an entrepreneur is a never-ending rollercoaster, but if you enjoy what you do, it’s a thrilling journey with new challenges every day.

Reason 9. It enables you to dream big.

No idea is too crazy and no goal is too big when you are an entrepreneur — you can dream as big as you want

Reason 10. You learn new things

As an entrepreneur, you must wear multiple hats. This frequently entails picking up new skills and continuing to learn and improve on them. Part of what makes being an entrepreneur so fascinating is constantly adapting and shapeshifting by learning new things.

Reason 11. Entrepreneurs are innovators. 

Think of all the new technology and ideas that have come to life over the past few years. Those were all once just an idea — but amazing entrepreneurs brought those ideas to life.

Reason 12. You help shape the world

Great entrepreneurs are problem solvers who fill a gap in the market, whether it’s internationally or locally. Every small contribution to the economy makes a difference in the world we live in. You are meeting the need of consumers and will benefit from the goodwill you create.  You can directly impact society by introducing a service or product that people use. 

Reason 13. You have the opportunity to change lives.

Have an idea for a product or service that has the potential to make a huge impact? Go for it — nothing is stopping you!

Reason 14. You do what you love

Doing what you love is the best part of being an entrepreneur. When you’re working with people you enjoy and are doing things that inspire you, it is just easier to get up in the morning with a smile on your face. This is what makes starting a business worthwhile.

Reason 15. You serve as a role model. 

As an entrepreneur, people will look up to you. You have the ability to be a role model for family, friends, employees and community members. Your success serves as motivation and inspiration.

Reason 16. Create a legacy. 

Creating a successful brand to the point where it leaves a personal legacy behind is appealing and serves as motivation for many entrepreneurs. 

I hope these reasons have convinced you to dip your toes in the vast sea of possibilities that entrepreneurship is! For me, each one of them has been true, and I have thoroughly enjoyed every moment of the entrepreneurial journey.

References:

  • Holden, Kristie. “10 Reasons to Love Being an Entrepreneur” Marketcircle, 8 Feb. 2016, marketcircle.blog/10-reasons-to-love-being-an-entrepreneur.
  • Long, Jonathan. “60 Reasons Why Entrepreneurship Is Amazing.” Entrepreneur, 9 Mar. 2015, www.entrepreneur.com/article/243389.

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Importance of cost-benefit analysis! #GreatMinds

/ Business, Great Minds

Having embarked on your entrepreneurial journey – you must be very critical while spending money for an initial period of 2 to 3 years – irrespective of the fact that it is your own money or borrowed money. Even after 2 to 3 years when your business is well established and is running well, it is nice to remain financially alert, frugal, and prudent. I am not suggesting that you be a miser and/or have a narrow focus or short-term perspective of things. All I want to say is that you must always do the necessary cost-benefit (either a quick verbal check or a structured study) of any aspect, offer, or proposal before making any financial commitment. The application of the cost-benefit concept should not be limited to only fixed assets. It is a versatile concept and should be applied in all situations whenever and wherever a cost is involved. Always ask – what is my cost? and what benefit do I get?

Here’s what Thomas Sowell, an American economist and social theorist, has to say:

WHAT DO YOU THINK?

Let me know in the comments section.

In this ongoing series #GreatMinds on my blog, I am shining a spotlight on the important ideas that some very successful people keep talking about in their public life.

Importance of cost-benefit analysis! #GreatMinds Read More »

Do not over-capitalize! #GreatMinds

/ Business, Great Minds

Capitalize only to the extent necessary – overcapitalization may increase your borrowings and increase your interest burden. While ideally, you should have adequate capital with a healthy operating cushion (to take care of unforeseen factors) – temptation to overcapitalize and borrowing more should always be avoided. New entrepreneurs during the start-up phase can avoid buying land and constructing buildings – they can instead work from leased premises or factory sheds. Major plant, machinery, and equipment can also be leased out to save on initial capitalization costs. In the initial period, which may vary from a few months to 2-3 years, many entrepreneurs fail or are forced to exit from the business. Once the entrepreneur has crossed this vulnerable period of risk and uncertainty and the business has picked up, one can always do judicious planning to build own assets and terminate all lease arrangements. 

Here’s what Jim Breyer, an American venture capitalist, founder and CEO of Breyer Capital, has to say:

WHAT DO YOU THINK?

Let me know in the comments section.

In this ongoing series #GreatMinds on my blog, I am shining a spotlight on the important ideas that some very successful people keep talking about in their public life.

Do not over-capitalize! #GreatMinds Read More »