I am writing this post for a friend. This friend is an entrepreneur, they had a great idea and made their dream a reality. The path has been difficult, with extreme highs and disappointing lows, one of which is happening as you read this. I have nothing but tremendous respect for this person and every other entrepreneur I have ever met; you have poured everything you have into making your dreams come true.
I am not an entrepreneur, I am a businessman, I am a student of business, of execution. I know how to make things work, I know how to motivate people, I know how to translate ideas into action, and I know how to help entrepreneurs, executive directors, and organizations for-profit and not-for-profit. I share what I know because what I know has been shared with me.
Understand your financial statements – Good decisions happen when you know and understand your financial situation at any and every particular moment. Leaders who do not have the correct or incomplete information jeopardize their organization’s future.
Cash Flow should be on your mind daily – Too many SMEs, including non-profits, forget this maxim. Managing and monitoring your cash flow is as important as maintaining competitive advantages. Things happen, you might even have record sales, but all of your resources may be tied up in inventory and something unexpected happens. A charity may have a healthy balance sheet but lack the day-to-day reserves to meet payroll. Start with having enough resources to meet one month’s expenses without revenue and build towards a six-month reserve.
All organizations should use supplier terms; retailers should use market development funds, co-op advertising, display allowances, shop for deals; and free point of purchase; non-profits should actively pursue available grants, seek government funding, and encourage donations.
With unlimited demands and limited financing … stay focused – Mission creep is an everyday trap; an organization needs everyone to ensure the core missions are their priority. Is every activity helping to drive your organization’s goal(s). Know the difference between products and services you MUST have and others that would be NICE to have.
What are your competitive advantages? Competitive advantages are fundamental to the success of any organization. What makes you special? Loyalty only exists in the present; you cannot rely on it for the future as it must be constantly earned. For-profit/not-for-profit, for your customers/clients, your staff, and your advertising, all must tell everyone why you are special. BE DIFFERENT! STAND OUT!
Give your people the best training possible and the tools they need to do their jobs – Training is the one element organizations control almost exclusively and can make the difference between success and failure. Your training becomes part of your culture and does not have to be costly. Use every tool available, develop mentors on your team, use your suppliers, study your competition, read, attend conferences, and have effective meetings.
Build positive relationships with your customers/clients, customers, and your people – Listen to their ideas, appreciate their issues, and be genuinely interested in them. Everything is about people.
Are you working 10-12 hours a day and 7 days a week? Motivation and dedication are key to success for any successful organization; however, at some point, the “law of diminishing rewards” becomes a reality as the energy and drive required to lead your organization are dulled by exhaustion, fatigue, and inattention.
Hire smart people and let them work – If you insist on always being the smartest person in the room, your organization will only grow as far as you can push it. The hallmark of great entrepreneurs is the ability to find, hire, and keep people who might be better at certain things than they are AND NOT FEEL THREATENED BY THAT. At one point my organization had 12 former business owners contributing and their understanding and abilities were priceless.
Understand that you do not have a monopoly on good ideas – Learn from everyone, go to conferences and meetings and search out ideas that work, listen to concepts that have failed, and learn why. Incorporate all of the good things and try to learn and avoid the bad things.
Encourage your people to speak their minds – Almost everyone says they have an “open door” and they say they welcome fresh ideas; in practice, this is far from the truth, at least in my experience. Build independent thinking “red teams” in your organization to challenge current practices and ideas, use them to make your projects stronger, and close blind spots. (Red Teams are individuals or a small group of your people whose task is to find flaws and missteps in new processes or products to help anticipate problems and devise solutions before going to market.)
Measure your performance daily, weekly, monthly, and quarterly – When you define what success looks like for your organization and sector, choose at least five measures to stay on track.
When advertising defines and measures success – Too many organizations spend money on marketing and advertising and never measure the results. Use a combination of methods rather than relying on one approach or medium. Whatever message you choose to communicate ensure it STANDS OUT and provides value to your intended audience.
Dedicate 30 minutes each day for personal development – Your development can be structured (courses) or by simply reading trade magazines, business books, or blogs, or listening to podcasts or audiobooks. There is so much helpful information available, essentially for free, and few people even look at it.
Get involved in your community organizations – Join your local chamber of commerce, community networking organizations, local charities, and other community groups. Any networking opportunities are a great way to share resources and ideas and find areas of cooperation.
Support local charities and community groups – Donate time, encourage your people to volunteer, and provide financial support and/or door prizes. Participating in local high school cooperative education programs is another great way to support your community.
Know your inventory – Whether a for-profit or not-for-profit, what do you own, what is its value, is it obsolete, and how much of it is usable.
Don’t assume “industry experts” are smarter than you are – Always be respectful but challenge ideas and conventional wisdom, trust your instincts and the advice of your people. Ask questions, ask for opinions, ask for guidance, but after getting all the facts you can in the time available, review the alternatives, and make your own decisions.
Share the credit – When asked about what makes you successful, always give the credit to your family and your people. I have been to so many meetings where the top person takes all the credit for the success of the organization, especially when their key people are in the room, one of the key ingredients for success is humility.
You will second guess yourself and have doubts – Instead of dreading doubts, embrace them, turn towards them, and prepare for them. This is why using “Red Teams” can help, this is why you hire good people, and this is why you constantly challenge your status quo.
What if it all goes to shit – Given enough time and unexpected circumstances this can happen, even to really successful organizations. When it does remember just because something is failing, that you are not a failure; instead, this is the time to really demonstrate your commitment to being a good leader and to “double-down” on all of these strategies.
Being an entrepreneur or leading/creating a charitable non-profit organization is a great accomplishment. Your passion, drive, and determination combine to create something tangible, an organization that quite literally lives and breathes. The rewards are tremendous but without taking care the costs can be devastating. You never turn it off, 24 hours per day, 7 days a week, and 365 days a year for decades sometimes. This is why you need a plan; you need to set priorities, and you need to define success and measure it.
People around you will see problems and solutions, and listen to them, but know it’s okay to take things personally, for entrepreneurs and creators, of course, it’s personal. My advice to my friend is the same as I am suggesting to you, use these – they work.
Good luck, you can do it.
Paul.