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Research Triangle Business Advisors

December 2014 Newsletter

 

Entrepreneurs face many tough challenges. For example, making the first sale, growing the number of customers, hiring capable employees, cash flow and funding, along with much more.

But often the biggest challenge entrepreneurs face is either a self-limiting or self-inflating view of their abilities. Fear, self-doubt, overconfidence, "inside the box" thinking, misdirected commitment to a course of action, and other myopia can lead entrepreneurs to sabotage their businesses.

In an attempt to redirect some of your possible myopia, the list that follows shows potential shortcomings of entrepreneurs (with suggested improvements). These behaviors apply to businesses of all sizes and levels of maturity.

 

 

  Bob De Contreras

  919-280-1307

  Bob@rt-ba.com

  www.rt-ba.com


 

What We Can Learn From Entrepreneurs

Shortcomings of Entrepreneurs

Unrelenting focus on profit: Making money is a business' primary objective. But when profit focus becomes an obsession, customer satisfaction can suffer. In a "profit first" culture, employees face immense pressure to maximize revenue without consideration for the customer relationships.

Don't lose sight of the human element in business. Keep customer expectations in mind when making decisions. Donít dilute employee focus on customer satisfaction.

Overconfidence: Confidence grows businesses, but overconfidence can diminish them. Overconfidence leads entrepreneurs to underestimate the impact of certain activities and to over commit resources when pursuing opportunities without first assessing the impact or alternatives.

Avoid "over-enthusiasm." When considering opportunities, pause and build what-if or alternative scenarios before taking action.

Undirected creativity: Creativity and innovation stimulate growth, but too many ideas can be counterproductive. A lack of focus can cause an entrepreneur to initiate multiple initiatives at the same time, losing focus on the core business and confusing employees.

Select and cultivate ideas that add value for your customers, streamline your business and improve competitive advantage.

Unilateral control: Go-it-alone entrepreneurs single-handedly get things done in a startup situation. But as the business grows, the need for control prevents these entrepreneurs from focusing on all the activities that bring the highest value to the expanding business.

Hire and train talented people, transfer responsibilities to them, and get out of their way.

Ineffective delegation: Business growth is fueled by delegation. But, itís hard to implement effective delegation techniques. Often, entrepreneurs hand off tasks to the least busy employee, and then make the mistake of micromanaging that person -- behaviors that can lead to costly loss of focus and productivity.

When delegating, identify the right person for the task, give clear instructions and trust the employee. Building your team members' ability will not happen without your effective delegation and trust.

Misplaced commitment to a selected course of action: Entrepreneurs with high tenacity and perseverance tend to stick with a failing strategy, even when the results consistently fall below expectations.

Set measurable objectives to gauge progress on your project. Record and report progress. Be prepared to change course if needed.

Entrepreneurial myopia: It's common for entrepreneurs to fall in love with their idea or product. Their attachment to it and their intense desire to see it succeed blinds them to its flaws.

Be objective about what you offer to the market. Surround yourself with trusted advisors who can help you assess the idea or product objectively. These advisors can be employees, customers, vendors or competitors.

Unproductive networks: Use of personal networks made up of connected and diversified contacts expedite business growth. But many entrepreneurs fail to build an effective network or are unable to adapt it to accommodate their businesses specific needs.

Figure out strategies to build your emotional intelligence (skills in forming and keeping relationships). Don't forget to refresh and reshape your networks as your business needs change.

Personal bias: Successful entrepreneurs have a highly positive self-image, which leads them to favor information confirming their beliefs and opinions, while discounting information that contradicts their viewpoints. This bias negatively affects their decision-making.

Interact with people with opposite viewpoints. Allow them to counter your ideas and concepts. This will help you identify more successful opportunities.

These behaviors donít address every factor that affects business success. Other items such as experience, knowledge, and skills, along with many external factors play a role in determining business success.

Your traits may or may not be easy to change, but they tell you where to begin. Recognize and understand your qualities. Once you understand your talents, biases and preferences, create a plan to nurture your strengths and manage your areas for improvement.

 


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