Whenever I spend time with new or young entrepreneurs, one of the areas I see them struggle with most is how to best spend their time and efforts.
When entering the world of entrepreneurship from a previous job, our initial inclination is to keep doing the same job we did prior. If we were a manager, we continue to be a manager. If we focused on sales, we continue to focus on sales. If our job involved significant financial management, we spend our time there. It’s no surprise that we tend to gravitate towards our comfort zones. As an entrepreneur however, habitual behavior that served us well as an employee will not translate into creating a new and successful business.
Entrepreneurs have a host of responsibilities which require their focus, pulling them in many different directions. Effective and productive use of time is one of the hardest skills for an entrepreneur to learn. It is especially difficult for a new entrepreneur who has recently left the corporate world to understand what responsibilities fall upon the entrepreneur, and which should be delegated to others.
I believe every entrepreneur has key responsibilities to their business. While the entrepreneur must delegate specific aspects of these responsibilities, the overall responsibility is theirs to own. They cannot do all the work themselves, and in many cases are not qualified to do the work required. But they must accept the responsibility for these business sectors.
Of all the responsibilities required of a new entrepreneur, here are the ones I believe are the most important.
Financial management: An entrepreneur needs to have a clear understanding of the financial picture of his or her business. Cash flow, capital requirements, profitability, debt, payroll and all other financial aspects must ultimately be the responsibility of the entrepreneur. Entrepreneurs must know when changes are necessary to make new financial decisions. They must be able to accurately forecast the financial future of an organization. Excellent entrepreneurs can respond quickly on any given day when asked financial questions about their company. It is certainly important and necessary to have a strong team of financial experts to assist in these areas. But the business owner must have complete knowledge of the financial health of the company.
Focus on the customer base: Entrepreneurs must know and understand their customer base. With no customers, there is no business. A customer base will influence everything about the business. If the business is providing a service, a product or both, the customers will decide if the business is successful. Customer bases do not consist of large market sectors. This is especially true for a new business. Customer bases are comprised of a narrow set of individuals and/or companies. Every entrepreneur must know who their customers are, where they are located, how they buy, what they seek, and all other pertinent aspects. It is the entrepreneur’s responsibility to identify and understand the customer base. From there, they can relate this information to the other aspects of the business including sales, product development or marketing.
Develop and Execute the Business Strategy: Every business must have a strategy. It is the responsibility of the entrepreneur to develop that strategy. Strategy will shape how the business is managed, determine it goals, set standards, and create a culture. Strategy identifies specific customers and how to serve those customers. It also projects growth and anticipates changes. Once the strategy is developed, it must be implemented. This requires it be communicated and understand both internally and externally. Then the business owner must be diligent in executing the strategy. Only when the entrepreneur develops and implements a strategy for the business will the business be successful.
It is easy for entrepreneurs to lose sight of their true responsibilities. Problems occur, decisions need to be made, the business becomes busy and challenges lie at every corner. Entrepreneurs who start and run successful businesses remember their primary responsibilities. Then they execute those responsibilities well. Managing the business' financial health, focusing on the customer base, and developing and executing the business strategy are three of those key responsibilities. When an entrepreneur loses focus on these responsibilities, there will be consequences. When these responsibilities are well-managed, then the possibility of success becomes a reality.