Limited Capital is Limiting
According to a recent article in the online WSJ, there are successful companies that started on a shoestring. Examples of these are Live Worldly, LLC, beginning with a $40 investment, Food Tour, with a $100 investment and Floor Works New York that began on $145.00. While these company owners are not gazillionairs, they have achieved a level of enviable success. However, limited capital does have its, well, limitations.
Depending on the stage of growth, and your long-term vision for growth, the need for sufficient operating or investment capital changes. Of course, the best time to get a handle on needed financial resources is during the start up stage. This is critical to the growth of your organization and it’s true whether your company delivers products or services.
Many business leaders believe in the hard work philosophy. If I work hard, I will be successful. The CEO for Food Tours states that he invested “$100 and 100,000 hours.” Being short sighted about the amount of money one requires to run a business is not only limiting, it will take a toll. Limited capital can negatively affect growth, both in terms of achieving targets such as the number of clients/customers, revenues, and profits; but also in achieving more long-term visions. An example is in attempting to deliver time sensitive products and the lack of funding to deliver them in a timely fashion. Therefore, right from the beginning a good business plan is essential.
Some business owners equate revenue to cash flow. However, they are not the same. A company can be drowning in revenue and not be able to pay its bills. Understanding how much money there is every day or week to pay bills is critical. This helps to eliminate surprises. It doesn't matter how little cash there is to track, waiting until you think you have enough to track is a dangerous game. Understanding cash flow management allows business owners and CEOs to make better decisions up to six months in advance.
Perhaps you’ve heard of Lemonade Day. It’s a day for teenagers to learn about becoming entrepreneurs by selling lemonade from their own lemonade stands. These young business people learn how to attract customers by making their “brand” of lemonade stand out from the competition. One youngster had a character with a lemon head waving at passersby. Another sold several flavors and added real pieces of different sliced fruits to distinguish hers. A 16-year-old male even sold other products like water to joggers. How are you locking your customers into your products and services?
Asiana Airlines’ Flight 214 was headed in the right direction and aiming for the correct target, runway 28L at San Francisco’s International Airport. According to the online San Francisco Chronicle, unfortunately, the Boeing 777 was “behind the power curve” as described by Jim Tilmon, a former commercial pilot and aviation consultant in Arizona. Approaching the runway should be undertaken with a certain level of power, states Barry Schiff, a former pilot for TWA who writes about aviation safety. Business profits too, must be approached from a certain power standpoint.
A company is either growing or dying. A company must grow in terms of profits, products/services, or people. People growth adds complexities. According to Navigating the Growth Curve, a book by James Fisher, entrepreneurial companies navigate seven stages of growth as they add one employee and keep adding employees up to 500.
Starting a business can be tough. Taking care of business can encompass decisions such as obtaining funding, to deciding to have a home office or go elsewhere and the ramifications of each. Other business elements include ensuring that all the right legal documents are in place. These can include county, state, and federal documents depending on your business. Alternatively, documents can include partnership agreements that can help prevent or at least lessen expensive legal disagreements later as the business matures and perhaps takes on even more partners. Then there is the business of getting the word out about your business and selling your products or services. Then, there’s the business of the business. This includes the everyday nuts and bolts of operations, customer service and management. These considerations might be daunting enough. However, as a business grows, each stage of the business has its own business issues. The good news is that these patterns are predictable. Therefore, anticipation and preparation can help ease the pains of growing a business. Here is how to take care of business during different growth stages.
The pressure for executives, managers and supervisors to stay on top of performance management (PM) is tremendous. However, the question is, do they understand the why of PM and its benefits? Why should they bother? After all, the people they manage are responsible working adults who don’t require monitoring like a group of third graders. Right? Well, er, umm, in some cases yes, in other cases, you would be amazed. The truth of the matter is that each member of an organization brings value, intelligence, and talent to an organization and its goals. Further, workers, especially the younger generation, want meaningful work. There is more at stake than one may realize.
Sara, a customer service representative with your company can charm the socks off most any customer and have them eating out of her hand. She receives constant kudos on customer feedback forms. Co-workers, however, find Sara a little less charming. Sara reserves rudeness, sarcastic answers and the inability to deliver needed information for her co-workers. Is this Dr. Jekyll and Ms. Hyde personality something that is just “hard wired” into Sara’s personality and cannot be changed?