Tag Archives | Entrepreneurship

The Key to Having a Unique Business? Unique People!

Over the years of teaching in an entrepreneurship program, I realized a pattern. As expected, every entrepreneur thinks his business is unique. But in having a unique business, who works for you? What value do they bring to the table? Do they make your business “unique”? To some extent, they probably do! These are questions we will explore, but for now, let’s talk about what really makes a business unique.

Is your business really unique?

Every business or inhaving a unique businessdustry has nuances that are peculiar to that market. But is it necessary to restrict your hiring to employees with industry experience?

Business is business is business. Yes it’s different, but you don’t want to make decisions based on pride and skills you don’t have. They don’t make MBAs for each industry, after all. If all businesses were unique, they would make specific MBAs per skill per industry. That’s the beauty of the hiring process… seeing who has the talents and skills, and who doesn’t.

A few tips on having a unique business…

1. DiversifyEver thought about pivoting? Or changing your business model? When we say “diversify”, we really mean looking for something in your company that can be improved. How can you best optimize the assets you already have?

2. Innovate. This includes solving new problems, creating a new product, finding new business partners, and many other factors that go into making new plans for your business. But be careful not to introduce too many things at one time!

3. Hire unique people! Who else is going to implement these changes? Building a better team will help solve new problems that your company might not have seen before. You just have decide from there… will you hire based on degree or drive?

How do you build that unique team? Download our free whitepaper to learn how to recruit the perfect team for your business!

Degree vs. Drive

The term “degree” in this blog is a loose term. It generally means the typical employee who has gone to college, and worked 5-10 years in a job to acquire skills. If you think about it, who knows the nuances of the business better than anybody? It is the entrepreneur and his core team!

In the Strategic CFO, we work primarily with established companies rather than solely start-up companies. Although we don’t always work directly with the entrepreneur, we still see the patterns of pride within the company. Pride, in this context, means more than believing your company is the best and undeniably different than any other company.

Recently, I visited a client that wanted to recruit a CFO. They told me they wanted to hire someone with “industry experience.” How would you interpret this? “Industry experience” can mean one of two things: 1) years of experience in any given industry, 2) knowledge of the industry, or 3) both. Notice that I never mentioned talent or drive in this analysis.

Hiring for Degree

Advantages

having a unique businessNow don’t get me wrong, hiring for experience has its perks. Those with experience are familiar with the industry jargon, and understand the processes. If you’re lucky, you won’t have to train them for longer than a few weeks! Having a more tenured employee also appeals to customers and other partners, because not everyone trusts a young, fresh new hire.

Disadvantages

Experience is often short-sided. If hiring for experience was the main criteria for hiring new graduates, then there might be a lot of holes in the skill set of your company. Take the MBA, for example. You hire this person based on experience and their years of study in the industry. But what if there was a new skill set that not a lot of people have studied in? You’ll be paying a lot more to receive a lot less. Experienced employees tend to go by the book, and generally don’t go outside of what they know. After a while, tenured employees are less innovative, which is an essential part of diversifying your business and solving new problems.

Hiring for Drive

Advantages

Harvard says, “hire for talent, train for skills.” When you have someone that’s talented, you can get that person up to speed in any industry. For example, the marketing specialists in the Strategic CFO staff weren’t always tech-savvy when I first hired them. However, I chose them from a pool of talented people with drive. Within months, they became digital marketing specialists. People with drive are also innovative. They won’t stop until they’ve finished a project or solved a problem. Finally, they’re affordable. If you think about it, they’re usually young hires. Young hires are cheap!

Disadvantages

Although young hires are cheap, they might take longer to train and familiarize with industry jargon. Additionally, you can’t always send millennials out on cold calls or familiarize them with regular clients.

“Teaching tall:” more on hiring for talent

In my opinion, I think hiring for talent is more valuable than hiring for experience. It’s an investment. John Wooden, the famous head basketball coach at UCLA and creator of the “Pyramid for Success,” had this saying… “I can teach anybody how to play basketball. I can’t teach tall.” Basketball players are known to be tall, muscular, and fast. John Wooden showed us that anyone can do something if they have the drive for it. The same can be applied to business and building your company.

Conclusion

So we explored the idea of having a unique business by having a unique team, what other things you can do to make your company unique, and the advantages/disadvantages of hiring for degree and drive. The key to having a unique business: hiring unique people! You can accomplish anything for your business if you have the right resources and make productive decisions. You can get there, it’s just a matter of how soon you and your team are willing to do it. Your business can be unique… and you definitely can’t do it alone.

Don’t do it alone. Download our free 5 Guiding Principles for Recruiting a Star-Quality team today!

having a unique business

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Access your Strategic Pricing Model Execution Plan in SCFO Lab. The step-by-step plan to set your prices to maximize profits.

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having a unique business

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True Definition of Entrepreneur

The True Definition of Entrepreneur

What is the true definition of entrepreneur? Some say that it is a person who runs a business at his own financial risk and others may say it is someone who organizes and manages any enterprise. However do those “textbook” definitions truly define an entrepreneur in this day and age? Technically yes, but an entrepreneur is simply more than that.

An entrepreneur is a personality that you find in someone. The definition of entrepreneur cannot be merely defined by a conglomeration of words and phrases. After meeting an entrepreneur personally one can actually understand the definition of entrepreneur because it gives substance to the term. In a general sense, all entrepreneurs are a master of none but superior to the average in aspects of business. However they are unique in their own way. Not one entrepreneur operates in the same way or possesses equal traits. That’s why it is difficult to define an entrepreneur.

It is an entrepreneurial mindset that one possesses which really creates the true meaning of entrepreneur. So if you get the chance, I would highly recommend spending time around a successful entrepreneur to really grasp the concept.

Traits of a Successful Entrepreneur

How do you know if you possess the traits of a successful entrepreneur? You may have entrepreneurial traits that come naturally. Entrepreneurs are passionate to the highest degree. “No” is not an acceptable answer because the level of drive you possess is naturally higher than the median. An entrepreneur gets things done and loves to be competitive in the process. A true entrepreneur is not predictable, one that possesses a certain creativity level that allows one self to see and produce “ahead of the curve”. However, without strong people skills, an entrepreneur cannot be successful alone.

People skills are underrated in this aspect and can decide whether or not you are meant to be a successful entrepreneur. Not a single person wakes up on any given day and decides to be an entrepreneur on a whim. These people have distinct entrepreneurial traits that make them tick a certain way and that’s what makes one an entrepreneur. That is why they stray from the average and stick out in their own creative manner. In this current era, entrepreneurs are constantly innovating their traits. They don’t change them but, in a sense, they update their qualities by adoption and modification to create fresh ideas that stay ahead of the curve. Continuous learning is one of the key traits of entrepreneurship. Not by simply reading articles or following up on some of the master entrepreneurs, but actually implementing these entrepreneurial concepts. Successful entrepreneurs never stop learning; because once you think you know it all is the moment you get left behind the entrepreneurial curve.

Awareness is another vital trait of successful entrepreneurs. If you can obtain the indicators of a recession in your market by extensive research of the market trends then by all means do it. Keeping tabs on these indicators is vital to the survival and overall health of your business. The next trait of successful entrepreneurs posses is consistent brainstorming. All epic ideas are a product of some type of brainstorming. As a business entrepreneur one cannot simply rely on ideas you have taken from others. Effective entrepreneurs are constantly writing down new ideas that catch their attention. These entrepreneurial traits are vital to being a successful entrepreneur and can pave the way to being a successful entrepreneur.

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UH Entrepreneurship Mentor Program

 The University of Houston Wolff School for Entrepreneurship is looking for seasoned, compassionate entrepreneurs to mentor a university student through an experience that has the potential to change both lives. 

Every year the University of Houston educates 2,000 students in entrepreneurship. From this pool, the Wolff Center for Entrepreneurship selects 40 students to participate in a year and a half, lock-step entrepreneurial experience. In addition to six courses spread over the three semesters, the student participates in sixteen programs and experiences that are outside the classroom.  (These are as diverse as spending a week-end with Warren Buffett to traveling to a prison to coach a prisoner in the Prison Entr. Program.) 

The single most important part of the WCE experience is creating a relationship with a personal mentor. Each student is provided a personal mentor that not only coaches and advises on the student’s business, but equally significant, helps the student develop a vision for their future and helps identify stepping stones going forward. Most mentors believe they derive more benefit than they deliver from this relationship. (Our students would not agree, and for many of them, these relationships carry on for years after the student gets out in the real world.)

 

The ideal mentor would be someone who had:

  • Entrepreneurial success and failure
  • A willingness to share their experience and Mentor an undergraduate entrepreneur
  • The capability to understand a student and help them turn their passion into success
  • The time to attend a monthly meeting for two hours (No meetings in summer or over holidays…total of 9 meetings over the year and a half.)
  • Meet informally once a month

 

 If any of you believe that this opportunity might be a fit for your life, please contact:

Jim Wilkinson (jwilkinson@StrategicCFO.com)

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Corporate America

A thought occurred to me while digesting the news that the current presidential administration, upon discovering that most new jobs are created by small businesses, has seen fit to offer “help” to them in order to save the Republic.

What a fine land this is to live in for a large business! Governments at all levels will bow before you and grant every wish you have in exchange for locating your operations in their taxing jurisdiction, so long as you bring “jobs” and their families along. Health care “reform” means politicians catering to your every concern and ensuring that someone else pays for it, most likely the small businessman whom those politicians claim to defend from “big government.”

This is no longer a land for the risk taker, the entrepreneur, the individual who dares to live their life differently, and not just wear a certain brand of clothes or drive a certain car to prove their individuality.

The federal government doesn’t care about you when it needs taxes to pay for all of its excessive borrowing, a part of which went to subsidize the foolishness of large Wall Street firms. Not to mention that it had been subsidizing those firms with easy credit and low rates for a long time before.

Yet now, Uncle Sam needs you lest the proletariat wake from its slumber due to double digit employment. And so, once more, the managed economy is proven a failure, yet we cling to it, as children settled into our beds for a long winter’s nap, waiting for Santa to bring gifts for us to open in the morning.

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Financing a Startup

Recently came across an article in the London Times about how to approach financing a new business. Overall it’s a pretty good summary of the basic dos and donts. Do know what you can do without today. Negotiate with your suppliers so that you can get better terms on your payables, such as a longer payment period and/or discounts. Don’t take on an equity investor unless they bring something to the table which is absolutely crucial (other than money).

One item mentioned, which has been problematic for even my established clients has been the timely billing of customers and collection of accounts receivable. How much working capital are you financing due to large A/R balances? For most startups, poor billing and collections can be a killer combination. For all businesses it can be quite expensive to continue to finance customers for months after a purchase. Know your accounts receivable turnover. Track it. If it is low or declines over time, find out why. Seek to improve the timing of your collections. Provide your staff with incentives for reducing your company’s days sales outstanding.

Many entrepreneurs focus on profitability (which is important) but neglect monitoring and managing their cash flow. It is important as the financial manager of a startup or smaller company to watch your cash flow like a hawk.

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Entrepreneurs Want Solutions, not Problems

Accountants are trained to prepare accurate financial statements and information. They are taught to identify problems, risks and errors in financial information. As they advance in their careers they continue to tackle larger and larger problems. At some point in their careers they need to change their approach if they are going to become a contributing member of management and possible a CFO.

One of the differences between an accountant and CFO is that an accountant will identify the problem,but a CFO will provide a solution. Entrepreneurs solve problems all day long. They are looking for team members that will ease their burden and provide solutions to problems.

So the next time you identify a problem, go one step further and identify a solution. This mind step will go far in advancing your career!

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What an Entrepreneur wants from a CFO/Controller!

Most accountants are trained at identifying problems. In fact, as a profession they excel at identifying problems and minimizing ristks. Two excellent expamples of this skill is the audit and tax compliance areas of public accounting.

Entrepreneurs are looking for something more from their CFO/Controllers. They take risks and solve problems everyday. They often get tired of carrying all of the company’s problems on their shoulders. They want team members to help them navigate the challenges of the day!

So the next time you identify a problem in the company, develop a solution at the same time! Over time the entrepreneur will rely on you more and more to shoulder the responsibility of managing the company.

Since we don’t have all of the answers, use outside resources for problem solving. WikiCFO is an excellent repository for CFO/Controllers of entrepreneurial companies. Use this tool to bring the solution not just the problem!

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