Well, initially during ma college dayz when entrepreneurial bug bit me… I was of the thought that to build a great company you need to build a great product. I was found of the software industry and was wowed by the biggies like d Microsoft, Google etc. And so all ma thoughts, desire, ambition, yearning and zeal was 2 come out with a generational next software that would Wow the world and make me d poster boy of the media and would goi all the way to become one of the big entrepreneur of the twentieth century. But sadly nothing happened and you would know why.
But now after some hard patches of ma life I do have learnt that you need not have a game changing, revolutionizing product to start a company. All you need is to have
invented identified a problem for which there are customers who would be willing to pay and all d more it is possible for you to offer the best solution.
Many have great ideas but only few own great businesses. Because the journey of taking an idea to a big business is difficult and challenging. Only few can do it. Robert kiowski has given a simple framework called as BI triangle for running/starting a business in his book Rich Dad guide to investing.
Here I have summarized and blogged on the BI triangle.
The first important thing a business needs is MISSION. Because if you don’t stand for anything, you will fall for everything. And, ideally a business should have two missions. One is a SOCIAL MISSION and the other is BUSINESS MISSION.
To start and run a business, one needs to do a lot of sacrifices and moreover business do undergo testing times now and then. And especially, during the initial years a business can survive only by entrepreneurs passion. And so, to provide the needed drive, enthusiasm and fire to run the business during those testing times, social mission is very important as money alone cannot provide the needed drive.
But having a social mission alone will not pave the way for creating a big enterprise. A clear cut business mission like ‘To be come market leader in communications’ can set clear cut benchmarks to achieve. This would set the business in growth path which is essential for the very survival of the business itself.
Business is a team sports. Entrepreneurs should not dream of owning a boat or a plane instead they should dream of owning a team of accountants, attorneys and bank managers. A well managed business will have excellent employees, specialists and entrepreneurs who would work along side employees and specialists to double the investors money. And remember MONEY FOLLOWS THE MANAGEMENT and not the otherwise.
Here, Robert says that the entrepreneur must have good leadership skills. He says that Leaders job is to bring out the best in people and be the best person. And also suggests that to gain leadership skills one must volunteer more. A good business man will rely on the advise of the advisers and his team members to help him do well in the business.
But here I would like to twist it a bit. I look Leadership as the need to have a mentor on board for the success of the business. Especially start-ups. Having mentors would save lot of energy in identifying the right path for the success of the company.
CASHFLOW MANAGEMENT :
Cash flow management is the fundamental and essential skill for Entrepreneurs. Most business fail because business owners are not financially literate. Many business fail because people do not understand the difference between profit and cash flow.
Some of the general cash flow tips
1. If you are a start-up delay taking in salary until your business is generating cash flow from sales.
2. Invoice your customers quickly upon shipment of goods.
3. Establish minimum dollar amount for orders before granting credit.
4. Establish late payment penalties.
5. Make sure you pay your bills promptly.
6. Keep your overhead costs minimum.
7. Have a investment plan for cash on hand.
8. Establish a line of credit with your bank.
The ability to run a business from financial statements is one of the
primary differences between small business owners and big business
COMMUNICATIONS MANAGEMENT ;
The better at communicating you are and the more people you communicate to, the better your cash flow will be. To be good at communications, you first need to be good at human psychology. Because just something excites you does not mean it makes others excited. The world is filled with fabulous products but the money goes to the best communications. Cash flowing into the business is directly proportional to the cash flowing out of the business. An entrepreneur must learn the following skills
2. Marketing systems
3. Advertising, headlines and copy writing
5. Public speaking
6. Direct mail advertising
7. Running a seminar
8. Raising capital
Moreover, marketing is what differentiates between small business and big enterprises. Its important to know that if you have convincing marketing, generating sales will be easy . To know more about marketing read Purple cow by Seth Godin.
In conclusion, communication is a subject worthy of lifelong study because there is more to communication than just speaking, writing, dressing and demonstrating.
SYSTEM MANAGEMENT :
The human body is made up of systems. So is a business. Every business big or small needs to have system in place. Some of the possible systems are
1. Daily office operating s/m
2. Product development s/m
3. Manufacturing/Inventory s/m
4. Order processing s/m
5. Billing and accounts receivables
6. Customer Service
7. Accounts payable s/m
8. Marketing s/m
9. HR s/m
10. General Accouting s/m
11.General corporate s/m
Today, especially in the information age your intellectual property attorney and contract attorney are some of your most important advisers because they help create your most important assets. These attorneys will protect your ideas and agreements. Many a business has been started and has survived by a simple piece of paper. One legal document can be the seed of your business.
Not alone that, there would be times when clients wont pay after getting the required service. To safeguard your business from those situations, a small piece of legal agreement is all that is needed.
The company’s product/service which the customer uses ultimately is the last important aspect of the BI triangle. Product/service is the least important piece to inspect when evaluating a business. Having a great innovate product or service is NOT important, the system behind that product/service is what is the most important part of the business.
A business with a defined mission, a determined leader and a
qualified and unified team begins to take the shape of BI triangle.
A business run with honesty and sincerity when built on the
principles of BI triangle will become complete, whole and sound.
To know more about BI triangle read Rich Dad guide to Investing by Robert Kiyosaki.