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I hope you were able to learn a little bit about yourself from the last article about character traits of entrepreneurs. However, there is another, perhaps more important self-analysis to be done. You need to figure out what your entrepreneurial strengths are.
Most people find they are one of three types of business people:
- Product/Service Guru – These are the product innovators, the engineers and the tech geeks of the world. They are also the system junkies who figure out how to run the most effective and most efficient services with the highest bang for buck.
- Marketing/Sales Specialist – They are the extroverts that are REALLY excited about the company, its products and generally are not afraid to cold call or just pitch to random people walking down the street. (Do they still say “They could sell a catsup popsicle to a woman in white gloves?)
- Spreadsheet Geeks – These are the finance specialists. The bean counters. They are constantly analyzing the risk/reward structure of the opportunity, the gross margins and forecasting and budgeting until everything makes financial sense.
I think when looking at the list above most people believe they are good at one of these areas. Some believe they are strong in two areas. But, if you are really honest with yourself you will realize that you are not strong in all of these areas. I believe too that a lot of entrepreneurs are “technicians” in that they have technical expertise in some product or service making them Product Gurus. This falls in line with Michael Gerber’s E-Myth: You need to work on your business not in your business.
Too many people find themselves as the chief cook and bottle washer (or the Chief Employee Officer). Because they started their business based on some technical product or service knowledge they believe that is where they should work in their own company. The problem is the company will never grow beyond the time you can put into it. Further, it will never obtain any real value because all of the revenues will be tied to you…and when you leave the value leaves with it.
In order to be a true CEO you need to recognize your strengths and either partner up, hire out, or outsource the rest. Does this mean you have to give up two thirds of your company to take on two business partners to fill the gaps? No, certainly you can hire on employees in marketing or finance if those are your week spots.
If you can’t afford to pay a decent wage when you first start out consider profit sharing bonuses, stock options or even outsourcing. There are many good small advertising agencies who can handle your marketing plans, brochure designs and media buys for a lot higher return then trying to do it yourself (usually poorly). You can burn through tons of cash on poorly designed marketing pieces because you wanted to save a couple hundred bucks on the front end. Also, the yellow pages typically lists scads of book keepers who cost a lot less than a CPA to do your monthly reports, quarterly taxes and other functions that don’t drive sales for a reasonable fee.
The point is that when you are a Chief Employee Officer you are too busy putting out fires. Too busy dealing with crappy employees who are trying to scalp a $20 from the till or run inventory out the back door. Too busy checking the most recent inventory delivery to make sure a supplier didn’t short your order or overcharge an item. Too busy to worry about marketing your business. Too busy to look at last month’s financial statements.
I can tell you the end result because I see it in my office every day. A business owner looks up and finds out that two years ago they lost $50,000. Last year they lost $100,000. And now they are most of the way through this year and they are out of cash and looking at me asking for a loan cause they are “just about over the hump”.
And that may very well be true, but there is not a lot I can do for them at that point unless they have a time machine. The time to ask for a loan was before they got sooo deep into the hole there is no way to dig out. Had they paid attention to their financial statements they might have changed their business model or marketing plan. But that would require working on their business not in their business. Giving your new business a change to survive, let alone thrive, is the name of the game and you just can’t do that if you are trying to fill all the roles…especially those that are not the highest and best use of your time.
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