Managing Leadership^®

Entrepreneurs receive a lot of attention from observers interested in how they influence the economy at large, and from policy makers eager to take advantage of those discoveries. But for all that, the entrepreneurs themselves have a pretty tough time, and many more of them go under (a group, by the way, that is under-studied), than survive.

Much of the interest in this issue is the makeup of the “entrepreneurial mindset.” Much as with the dominant thinking about individual leadership today, there is a belief that there must be a consistent set of traits which characterize an entrepreneur, and which, indeed, can make one.

Also like the froth about individual leadership, this is largely wasted energy – certainly on the part of the individual entrepreneur. For such a new business person, though, there are a few core efforts that can help:

First, focus less on the entrepreneurial opportunity you have identified and more on the market it serves. This will help ensure you efficiently refine your understanding of what the entrepreneurial product or service really is, and where its value truly lies. In turn, that ongoing analysis will clarify for you how to organize your assets to best serve and advance those.

Second, be sure you have looked to your cash flow. Never mind all the distractions you will be invited to engage in – designing creative workspaces, team-building, developing world-beating ideas, and the like. These sound great, but they are peripheral, and you are in the most dangerous phase of the fight for survival of your business; dangerous because you are new, and because you lack either or both of managerial experience and time.

So, you should always know the present and future health of your cash flow. This is the lifeblood of your business, and nothing else matters if it drains away. Be sure you have sources for replenishing it when and as needed – whether from new capital or revenues – and that it is being expended as cost-effectively as possible. Whatever your personal education, training, or experience in management, keeping a sharp eye on this alone will ensure you are not going too far wrong, and that you are keeping your business alive.

The first idea should help you understand what your business really does, and the second what it needs to be able to keep doing it. Next, examine what capabilities and time are needed to provide those, and what of them you and your staff personally have to devote to the effort.

Those that are vital to the identity of your business should be performed within it – by you or key employees. Those that are indispensible to its operation but not vital to its identity should be, to the extent financially feasible, outsourced. Note that with this thought in mind some entrepreneurs even sign up with employment agencies, which then staff their businesses – including themselves as the bosses – so that they don’t have to worry about anything from payroll to benefits to HR compliance matters, and can just do what they started the businesses to do.

So, understand the interaction between your entrepreneurial insight and its market – this is what constitutes the need for and identity of your business – so that you can be sure to always have that right as things develop. Next, you take personal responsibility for ensuring the cash will keep pumping through your business as needed to keep it alive and growing. Finally, triage the tasks: what you must do, what else must be done within your business, and what ought to be outsourced if possible.

Then, forget the rest – your focus on the above will ensure that you are doing the right things and not wasting time on wrong or unnecessary things.  And keep doing this – even well beyond the time your business has matured and you are no longer really an entrepreneur, but an executive.

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Today’s tip: Speaking of surviving against all the odds, it turns out that some fish who lack any defenses against predators nevertheless have a tool to help them increase their chances: the ability to learn – moreover, in a fashion not unlike our own. See this piece for more.

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