Are YOU headed for DOOM?
6 Reasons Why Entrepreneurs (and Nonprofits) need to readjust their thinking
There is a special kind of person out there who comes with the burden or pleasure of distinct character traits. Most of the time, those traits and qualities are admirable and serve them well, but in the instances we will be discussing - it can lead to total failure! I am talking about passionate entrepreneurs, and under that title, I include nonprofit leaders or founders who most people consider and generally think of as two separate animals. However, realistically, they are cut from the same cloth. It makes no difference if you chose the path of entrepreneurship or nonprofit leadership; you share the same underlying tenant - to solve a problem through a structured enterprise. With that said, let’s agree to a basic fundamental concept position, (which might require a needed mindset shift for some - a good thing) as a nonprofit, you are an entrepreneurial enterprise. So moving forward, I will make references to being an entrepreneur and in unique instances note differences applicable to the nonprofit sector.
Let’s Change the Failure Stats!!
Entrepreneurship is a way of life, a choice that offers unlimited possibilities to those who truly believe in it and live by it. At the same time, if misunderstood, entrepreneurship can be a total waste of time. It is not something you can fake your way through; you either do it right or spend time convincing yourself that you are making progress or it will get better. There are no easy ways around it, stop looking for the simplest path, look for the correct path.
The statistics on the failure rate of entrepreneurial enterprises is alarming. What’s even worse is the number of enterprises existing in survival mode, never really reaching their full potential. Sadly, a large percentage of closures and staying in survival mode is due to poor choices - choices that could easily be changed with a little knowledge and understanding of what you need to do as an entrepreneur. Is this article meant to scare you, yes to a certain degree, but more important, it is meant to alert and help you retrace your steps to hopefully get you headed back in the right direction before your entrepreneurial or nonprofit journey goes up in flames!
Now let’s explore the several key indicators that can inhibit and deter your success. Here are 6 indicators to help assess whether your actions are headed for doom. These indicators also help you make choices that are beneficial or have a mind shift related to who you are and what your real role is. As you go through the list, be honest with yourself and note each of the signs currently present in your strategies.
6 Key Indicators
1 Create Value and Avoid Survival Mode
One of the most obvious signs that you are headed for doom and that you are starting off on the wrong foot is if your primary motivation is to acquire wealth (funding) rather than first creating and demonstrating value. If money is the focus, it is time for some serious soul searching because the drive for money can impact your message, conduct, and even how you treat people.
First, create innovative products and/or services, fill a need for your target market and solve that special problem people are experiencing. Make it about the service and the impact you can have. The universe will reward those who seek to give before they get. The purpose of entrepreneurship is not the accumulation of money, but the creation of products/services to serve and help make the world a better place for all.
Wealth is a result of consistently providing solutions to the problems of humanity.
If you doubt me, go ask Bill Gates, Warren Buffet, Mark Zuckerberg and similar entrepreneurs. These are people like you and I, people who simply followed their passion (purpose driven) rather than following money (survival driven) and yet made a great fortune. Your ‘house’ has to be in order before you go after the money.
2 Inadequate Knowledge (Low Business IQ):
An entrepreneur on the path to failure won’t see the need to develop a business IQ. Once again citing #1, the focus will be “show me the money”, and you will ignore a proven fact: how much you make is a function and directly correlated to how much you know. Thus, they will forget that a business just like every other discipline requires certain competencies (knowledge, skill and experience) in order to remain functional.
A special note to nonprofits – the competencies demonstrated in the business sector are often over-looked as not being applicable in the nonprofit world. However, especially in this environment of tight funding and ever decreasing funding sources, it would be wise to take note, study closely and learn the skills needed to implement business strategies as a standard practice.
So what do you eventually get? Uninformed, out of sync, out-of-date, ineffective and inefficient systems whose strategies are not suited for the current market place. This is dabbling your way through the ever dynamic and changing world of business and in the end, failure becomes inevitable. Why? Because as an entrepreneur, your ability to do is perpetually limited by what you know. In other words, you are the engine of your business.
So, to have more means you have to keep learning more! In the TQM model, which stands for Total Quality Management, a successful system utilized for decades has as a core value ‘continuous improvement’. How do you continuously improve? There are several strategies indentified, such as collecting data, but the most applicable strategy to an entrepreneur is consistently focusing on personal development and self improvement through reading (books, blogs, magazines, etc.), attending seminars, business development trainings, executive mentorship or coaching programs, and membership in business clubs or networks. Stay current with trends and especially what your competitors are up to?
3 Capitalize on YOUR Strengths – Dealing with the I Can Do It Myself Syndrome
This is one hard thing that many entrepreneurs struggle with. It may be a key indicator that you may be heading for doom. The indicator targets utilizing your expertise effectively, or perhaps you are being affected by the, I can do it all by myself syndrome
First – YOU are NOT the end all - get over yourself; however, you may be affected by the, I can do it all by myself syndrome – a very common disorder in the entrepreneurial sector. As an entrepreneur, your success or failure will be a result of how well you maximize your strengths. Learn to delegate; for some, that is extremely hard. The list of reasons why you aren’t delegating could go on for days, resources, funds, I’ve heard them all. However, look at it this way, the value you really bring is the ability to utilize your strengths. These are the activities you naturally enjoy doing, would naturally do for free if given the opportunity, and have already established expertise and a solid level of competency. This is how every great entrepreneur made their success; doing what they love and loving what they do. They are not jack of all trades and masters of none. They focus on their strengths and don’t waste time trying to master a skill set where eventually the outcome is mediocre at best. Stop doing what someone else can do and start focusing on only those things you do exceptionally well.
How do you focus on your strengths? There is a limit to what an individual can achieve alone, thus the need for teamwork. An entrepreneur on the path to destruction is the one who will never empower others or seek the help of others. It may be out of fear that they might outshine you or you haven’t spent adequate time recruiting and/or researching the resources and help you need. Great things are seldom achieved alone.
As an entrepreneur, it’s very important you understand that you have no exclusive right to what is being done through you. Whatever it is you have in your mind to create is not entirely yours to dominate. You are only a vessel through which an idea, innovation or product/service is being launched.
4 Lack of Focus
In # 3, we discussed the need to focus on your strengths. We will now drill down even deeper with an internal self assessment of ‘how’ you work. Are you trying to do more than one thing – or everything at once, eventually not achieving excellence in any.
The great Albert Einstein notably stated:
“Genius is the ability to focus on one particular thing for a long time without losing concentration.”
The term multi-tasking has become commonplace, with some wearing it as a badge of honor. Most entrepreneurs are creative, big idea thinkers with multiple things occupying their mind at once. However, is multi-tasking an effective or efficient way to tackle the numerous projects on the ‘to do’ list. NO! Why – because it lacks focus, becomes disconnected and disjointed. The best way to tackle numerous items is best described in the riddle I am sure you have heard.
What’s the best way to eat an elephant? One bite at a time…
Make a thorough list of what needs to be done and prioritize the needs. Create an atmosphere to focus, set schedules for correspondence, project development and other tasks…. and stick to it. You will be surprised how fast you make it through your ‘to do’ list when doing one item at a time. This also ties into #3, the art of delegation.
5 Lack of Vision (Shortsightedness)
An entrepreneur who does not think about tomorrow is on the path to doom. If you cannot literally visualize far into the future - beyond today, then you are on the path to destruction. A recent disheartening conversation with a local nonprofit brought this point crashing to the forefront. They already knew that in a few months, their funding would run out. Their solution was to wait until 30 days out and make an emergency plea for funding. That is not planning for the future; in fact, that is not planning at all. First, why would you want to go into business just for today’s sake alone? The essence of entrepreneurship is to perpetually be of service to humanity; therefore, you must never cease to ask and be able to answer this question; “What can we start doing today to meet the needs of tomorrow?” Not having this consciousness is the reason why most entrepreneurs fail in business. You must keep thinking about the future, keep improving their game, put systems in place for sustainability and make a succession plan. This way you do not end up being eaten up by those businesses that are consistently creating the future today.
6 Poor Money Management (Incoming, Outgoing, Investing and Extravagance)
Boy, I could write an entire book on this, but for simplicity sake, I will keep it to the basic elements. Being an entrepreneur means being able to do more with less. An entrepreneur on the path to failure doesn’t use money correctly and has habits of being excessively flamboyant, wasteful or spending money irrationally. Thrift or frugality is a requirement for your entrepreneurial journey if you hope to become successful. How else do you intend to succeed if you cannot judiciously manage the resources in your disposal?
Outgoing funds (expenses) need to be classified into two categories; urgent expenses and important expenses. Your urgent expenses are recurring expenses, meaning they are periodic in nature. Your important expenses are capital expenses; meaning they are not periodic in nature, but are necessary for the continuity of the business. They are expenses made today in order to secure the future.
Some important capital expenses that should take priority are things that enhance the professionalism and functionality of your brand. This includes marketing elements such as a professional logo design, website functionality, and quality business cards and collateral. It also includes budgeting for professional growth and exposure gained through affiliations, networking, and training, all elements that demonstrate you are a viable, professional and cutting edge organization.
One pitfall often observed is that as a business begins to grow, there is an urge to start showing off the success by acquiring symbols of wealth. I’ve even heard some say it is a necessity to demonstrate business acumen and when they drive up in a luxury vehicle, it validates that their business does good work. Only quality products and services will validate your company’s value, which brings us full circle to Indicator #1 – Create Value.
As funds come in, it is especially important to create a system of reinvesting to fund ongoing and recurring capital expenses. A couple of strategies that will actually help build wealth within an organization is placing yourself on salary, and making it a priority to put aside and redeploy all excesses created by the business back into the business.
For more information on The Philantrepreneur Foundation and its resources, visit http://thephilantrepreneur.com or http://PhilantrepreneurFoundation.org