I recently read in The Wall Street Journal an article authored by Ken Kuan, Founder and President of Torrey Hills Technologies LLC in San Diego, ‘Teaching entrepreneurs to do more than dream”. Kuan was pondering on the closing of the University of California, San Diego’s Moxie Center for Student Entrepreneurship. He pointed out that, although the UCSD Moxie Center was promoting entrepreneurship spirit, it was run like a charity. Not really a good example for startups!
His analysis concluded that the UCSD Moxie Center had failed to teach the most basic survival skills for business:
– understanding the concept of win-win
– understanding how to forecast profits and losses
Per Kuan, many U.S. business school graduates can’t create a realistic profit-and-loss statement. Sadly, the same failure to execute or teach these basics concepts also spread across small businesses, incubators, and other city and county resources.
Many entrepreneurs start a business based on a trade or skill that they are expert at. However great their idea may be, the real art to building a sustainable prominent business lies less in the idea itself than in the process to make your idea relevant! The two basic principles referenced by Kuan are the foundation upon which this process is being built in order to yield exponential growth.
Understand the concept of win-win
A win-win situation is an instance in which both parties that participated in the transaction come out feeling satisfied that they got a fair shake, says Kuan. So how relevant is your idea? Why should anyone care about it? Entrepreneurs too often have a narrow focus on their own perception and fail to contemplate objectively (data analysis, market research, etc.) how their model will positively impact the lives of their patrons and their community thus not being able to convey it and monetize it.
Understand how to forecast profits and losses
You would think that is the cornerstone supporting the entire business structure as money relates to every part of the business. Yet time and time again, this is the biggest failure of countless small businesses. These financial missteps take many forms and shapes: ridiculous salary or expensive owner’s draws, overoptimistic/unrealistic sales forecast, improper bookkeeping/accounting, insufficient research on budget and adequate financing, unmanaged cash flow, poor knowledge of profit and margin calculation, untracked ROI, and the list goes on.
Many small businesses are inadequately prepared to efficiently handle the complex nuances of running a business. Although it can be difficult for some to let go of the reigns, no single individual can emulate the many skills needed. Yet their emotional attachment to the way they operate is the greatest obstruction to their future growth.
Numerous successful entrepreneurs and business leaders share this one trait: they constantly ask themselves important questions to stay fresh and relevant. Here are 9 essential questions you should answer regularly:
– How do I help my customers succeed?
– What do I want to achieve?
– Do I have the capacity to execute?
– What is my motivation?
– What are my obstacles?
– What have I learned from my mistakes?
– Are my results commiserate to my efforts?
– What do I need to let go of?
– What legacy do I want to leave?
Leadership is not dogmatic but remember: “character rules”. Through your experiences, failures and successes, and the right team/partner/strategist, develop the distinction and significance you’d like to have.
Author: Carine Dieudé, Strategy Director, Altima Business Solutions “Empowering you to focus”