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QUESTION: How Financial Management


helps to conduct business to become the
best entrepreneur person in the company.

Answer

The following insights can help you embark on your next entrepreneurial venture with due
diligence.
1. Passion & Motivation
The one word that describes the basic requirement for an entrepreneurship venture is Passion.
o Is there something that you can work on over and over again, without getting bored?
o Is there something that keeps you awake because you have not finished it yet?
o Is there something that you have built and want to continue to improve upon, again and
again?
o Is there something that you enjoy the most and want to continue doing for the rest of your
life?
Your demonstration of passion and motivation will determine your success in any entrepreneurial
venture. From building and implementing a prototype, to pitching your idea to venture
capitalists, success is a function of passion and determination. (For more, see: Turn Your Passion
into a Profitable Side Business.)
2. Risk Taking
Entrepreneurs are risk takers ready to dive deep into a future of uncertainty. But not all risk
takers are successful entrepreneurs. What differentiates a successful entrepreneur from the rest in
terms of risk? Successful entrepreneurs are will to risk time and money on unknowns, but they
also keep resources, plans and bandwidth for dealing with "unknown unknowns" in reserve.
When evaluating risk, a successful entrepreneur will ask herself, is this risk worth the cost of my
career, time and money? And, what will I do if this venture doesn't pay off?
3. Self-belief, Hard work & Disciplined Dedication
Entrepreneurs enjoy what they do. They believe in themselves and are confident and dedicated to
their project. Occasionally, they may show stubbornness in their intense focus on and faith in
their idea. But the flip side is their demonstrated discipline and dedication.
4. Adaptability & Flexibility
Its good to be passionate or even stubborn about what you do. But being inflexible about client
or market needs will lead to failure. Remember, an entrepreneurial venture is not simply about
doing what you believe is good, but also making successful business out of it. Market needs are
dynamic: changes are a recurring phenomenon. Successful entrepreneurs welcome all
suggestions for optimization or customization that enhances their offering and satisfies client and

market needs. A product you develop for yourself alone may qualify as a hobby, but a product for
the market should satisfy market needs.
5. Understand Your Offering And Its Market
Entrepreneurs know their product offering inside and out. They also know the marketplace and
its dynamics inside and out. Remaining unaware of changing market needs, competitor moves
and other external factors can bring even great products to failure (for example, Blockbuster).
6. Money Management
It takes time to get to profitability for any entrepreneurial venture. Till then, capital is limited and
needs to be utilized wisely. Successful entrepreneurs realize this mandatory money management
requirement and plan for present and future financial obligations (with some additional buffer).
Even after securing funding or going fully operational, a successful businessman keeps a
complete handle on cash flows, as it is the most important aspect of any business.
7. Planning (But not Over-planning)
Entrepreneurship is about building a business from scratch while managing limited resources
(including time, money and personal relationships). It is a long-term commitment, and
attempting to plan as much as possible at the beginning is a noble impulse. In reality, however,
planning for everything and having a ready solution for all possible risks may prevent you from
even taking the first step. Successful entrepreneurs do keep some dry powder in reserve, but
more importantly they maintain a mindset and temperament to capable of dealing with
unforeseen possibilities.
Do a feasibility analysis; identify time and capital thresholds; take the deep dive with your
limited resources. If your thresholds are crossed, look for alternatives and be prepared to take the
next exit.
8. Networking Abilities
How do you tap your network for solutions? Many people seek comfort in commiseration:
friends, colleagues and neighbors are happy to complain with you about "the global slowdown,
poor demand, or unfair competition; but that won't improve the bottom line. What do successful
entrepreneurs do? They reach out to mentors with more experience and extensive networks to
seek valuable advice.
Having such networking abilities, including more experienced mentors, is a key characteristics of
successful entrepreneurs.
9. Being Prepared to Take the Exit
Not every attempt will result in success. The failure rate of entrepreneurial ventures is very high.
At times, it is absolutely fine to take the practical exit route and try something new, instead of

continuing to make sunk costinvestments in the same venture. Many famous entrepreneurs
weren't successful the first time around. But they had the serenity and foresight to know when to
cut their losses.
10. Entrepreneurs Doubt Themselves But Not Too Much
You may ask yourself, am I an entrepreneur? And the very question may put you in doubt about
the answer. Even if you don't have the flair of Steve Jobs or the hair of Elon Musk, if you have
the courage to ask yourself intimidating questions Can I do this? Do I want to do this? you
have the stuff to be an entrepreneur.

6 Financial Secrets From Successful Entrepreneurs


1. Profit doesn't define success
As a growing company, profit isn't the best indication of how your business is actually doing. In
fact, it can often be discouraging. Matt Rissell, CEO of TSheets, reminds us that "a new or
rapidly growing company will burn through cash--fast." If business is booming, you'll find your
cash stash is being depleted more quickly than expected. Your profits might be low, but that
could very well be because growth is rapid. Instead, calculate your business's growth rates to see
if you're headed down the right path.
Keep in mind, though, that profitability should be the ultimate financial goal for your business.
2. Know what metrics matter for your business
There are some financial metrics that are universal and apply to all businesses (think revenue,
expenses, cash on hand, gross margin, etc.). But Joshua Reeves, CEO of ZenPayroll,
recommends that your business consider what it's own unique metrics might be, and include
those when gauging your health. "For example, in a subscription-based company, there are two
incredibly important metrics: customer lifetime value (LTV) and customer acquisition costs
(CAC). LTV helps you understand what your customers are worth to you, and CAC helps you
understand how much it costs you to acquire them. Tracking these two metrics across your
channels allows you to easily evaluate the profitability of different channels, and focus on the
best ones."
Take a close look at your business model and reach out to industry peers to help define these
specialized points. What are some unique metrics relative to your industry that you should be
paying attention to?
3. Don't lose money on dumb mistakes

With everything on your entrepreneurial plate, it becomes all too easy to make mistakes that end
up costing you. What mistakes should you watch out for? A perfect example, says Parsons, "is
not managing your accounts receivable and having protocols in place to encourage customers to
pay early. Money you get today is worth more than money you get in four months. The sooner
you have your money in the bank, the more interest you'll be making on it. If you're going to
extend the time at which you receive money or if customers are paying late you could implement
a late fee or charge interest on the amount owed. A lot of small businesses don't do this and as a
result lose money that could have been in the bank."
What other mistakes could be costing you money? Maybe you're missing your payment dates for
your credit cards and overpaying? Or getting charged fees for paying your own suppliers late?
Take some time to work through your business processes and identify places you could be
unknowingly losing money. If you're unsure, reach out to your accountant or bookkeeper for
help.
4. Perform an expense audit
"In my last company of 30-plus employees with four locations, I learned that all the employees
in my company (even the most honest ones) were giving themselves the benefit of the doubt on
their time sheets to the tune of $2,300/month in extraneous payroll costs," reveals Rissell.
Those numbers add up, especially as a small business. As your business expands, overspending
can become a problem, as you don't have time to monitor every dollar that leaves your business.
But, it's important you make time. How? Perform a quarterly expense audit.
Sit down each quarter and take a close look at where you are spending money. Can you
confidently say you're not overspending? Is there a software or service you're not using that you
should cancel? How else can you cut costs? Setting aside four times throughout the year to ask
yourself these questions could help you save thousands annually.
5. Value your time
"Small business owners often work with very tight budgets, which leads to a do-it-yourself'
mindset," says Reeves. "However, the most valuable resource is often their time. Entrepreneurs
should constantly think about whether they're spending time on the most important parts of their
business. For instance, if a business owner is spending three hours a week running payroll
manually, they may think they're saving money, but they are actually expending time and energy
that could be put toward growing their business."

Believe it or not, your efforts to save money by "doing it all" could actually be sending more
money down the drain. That's why technology plays such an important role in small businesses,
as it allows you to outsource or automate complicated tasks.
Rissell suggests that "business owners step back and evaluate where they can upgrade their
technology. And if possible, leverage cloud-based solutions and trusted advisers to solve the
problem."
Technology may come with an upfront cost, but the time and money it can save you down the
road justifies the initial expense. What business processes could you automate to help free up
your time?
6. Create a system to track your success over time
The key to simplifying your financial management? Develop a system that tracks your financial
progress over time and motivates you to set goals. As Parsons says, "If you don't set your goals,
you're missing a data point you could be tracking over time. Your system has to include what you
want to do, what you actually did, how that compares with the previous period, and how that
compares with the same period last year for seasonality. If you want to be as successful as
possible, your system has to have those four data points in it. This data will make making
decisions easier and increase your likelihood of success."
Not only would such a system help validate any future financial decisions, but it pushes you to
improve your financial health each year. Entrepreneurs can never get too comfortable or growth
will stop.
You don't need to be a financial wizard to succeed as a business owner. What matters is that you
work toward being as financially proficient as possible. Invest time in understanding what
metrics matter most for your business and how you can measure and improve these over time.
If you want to fine-tune your business's finances, I invite you to join Matt Rissell, Josh Reeves,
Sabrina Parsons, and myself for a free webinar, where we will be sharing more about our
experience as entrepreneurs and what we recommend for those looking to fund or grow their
business. Communication and leadership expert John K. Bates will be leading this exciting
conversation.

There are 17 skills every entrepreneur must have to be successful


1. The ability to manage money.

Very simply, if you cant manage money, you cant manage a business. Do you know where your
money goes each month? Do you live off less than you earn? If the answer to these questions is
no, youll struggle to manage a business budget as well.
2. The ability to raise money.
Once you can manage money, can you get more? In order to get investment, you need to not only
understand where to get money, but how to convincingly make a case that your business is a
good risk as well.
3: The ability to relieve stress.
Stress is no laughing matter. If you allow yourself to get frustrated and upset by setbacks, youll
struggle as an entrepreneur. Learning how to use stress to your benefitis essential.
4. The ability to be productive.
This is a big topic, because theres no one right way to be productive that works for everyone.
Learn about your peak energy times, your routines, and the productivity tools that work for you
in order to create your own plan for success.
5. The ability to make entrepreneur friends.
According to entrepreneur Jim Rohn, You are the average of the five people you spend the most
time with. So who do you want to be? Improve your odds of success by finding entrepreneur
friends who will be able to understand your struggles and give you much needed insight.
6. The ability to identify strengths and weaknesses.
As a business owner, you dont need to be perfect at everything. You do, however, have to
understand where youre strong and where youre weak. Assessing this will inform everything
from the business decisions you make, to the partners you bring on, and to the employees you
hire.
7. The ability to hire effective people.

Speaking of hiring, this is easily one of the most important skills any entrepreneur could have.
Having great people on your team will give you access to new strengths, while also building a
company culture that people want to be a part of. Hiring the right people is essential to get where
you want to go.
8. The ability to train new staff.
When you bring on someone new, a robust onboarding process will ensure that they know what
to do and not do. Not only will this help keep your company moving the correct direction, it will
increase the commitment level of good employees and give you grounds to follow up on
misconduct.
9. The ability to manage staff.
Once you have the right people, you need to manage them well. Early on in your businesss
growth, youll be everyones manager, so it pays to be effective. If you dont already know how
to manage, take the time to learn how to motivate, encourage, and develop your staff.
10. The ability to conduct basic SEO.
In the beginning, youll be doing the work of every business department. With that in mind, do
you understand basic SEO and digital marketing? If not, youll want to brush up on this area
before you launch a business.
11. The Ability to A/B split test.
A split test is a simple process that involves running a scenario two ways to test a possible
change. Its commonly used to make websites effective, but it can be used in many areas of
project management and marketing as well.
12. The ability to connect via social networking.

Along with SEO, social networks represent a key part of any businesss marketing strategy. Not
only will you need to understand each platform, youll want to arm yourself with the best
strategies for getting your startup and personal brand noticed on each one.
13. The ability to focus on your customers.
To be clear, without customers, you have no business. Make sure all of your pitches, products,
and services are focused on actual customer needs. If you dont know what these are, research
and ask questions so that youre able to give great customer service.
14. The ability to close a sale.
Letting customers know you understand their pain is important, but asking for the sale is where
many entrepreneurs get stuck. If youre nervous about this step, try enrolling in a sales workshop
to learn these much-needed skills.
15. The ability to spot new trends.
Business moves fast, so youve got to have the ability to see changes coming in your industry.
Make it a point to keep up to date on new startups and the advances in technology that could be
poised to disrupt your field.
16. The ability to deal with failure.
No business venture is a straight line to success; knowing how to deal with ups and downs is
essential. Remember that every successful person out there failed dozens of times before getting
a win. Failure isnt the end - its just a data point on the way to success.
17. The desire to improve your world.
In the end, the best and most enduring motivation is to make a positive change in the world.
When you focus your business and your success on that top priority, youll find yourself ready to
weather any storm to meet the goal.

Dont let this list intimidate or discourage you. Being an entrepreneur is a big task, but all of
these skills can be learned. If you notice one youre lacking in, go get it! Your eventual success
depends on it.