25 Aug Control vs Wealth – An Entrepreneur’s Dilemma
Whenever a business professional sits upon the notion of starting up their own business, they must take into consideration some large “big picture” concepts. Not only do they need to develop a new product or service idea, they also need to decide how to structure their business. And in looking at that structure they must decide how they want to balance their ability to control the business with how important financial success is to them. Since there are only 24 hours in a day and 365 days in a year, an owner must relinquish some level of control in order to increase the company’s capacity. The more control he/she releases the greater the company’s growth potential and ideally wealth potential.
So how does that owner decide how they want to balance these two important concepts? In William Shakespeare’s Hamlet, Polonius gave his son Laertes one last piece of advice “To thine own self be true”. That advice is as true then as it is today.
At the onset, an entrepreneur needs to take some time to personally reflect on what will ultimately make them successful in business. Are they a “nuts and bolts” person who wants to maintain complete control or are they a “big picture” person who will happily give up control over aspects of his/her business so that the business can have maximum growth. Growth inherently requires delegation and delegation requires relinquishing control. It is a fine balance.
According to The Founder’s Dilemma “Few founders of high-potential start ups can achieve both wealth and power; most choose between one or the other and often end up with neither”. The authors also state “A founder who knows whether wealth or control is his or her primary motivation will have an easier time making decisions and can make consistent decisions that increase the chances of reaching the desired outcome- Rich or King.”
The following are some suggestions for you to take into consideration as you grow your business. These quality controls will help you hand over responsibilities and grow your organization while helping to ensure a quality experience for your customers.
1) Hire the best person for the job. Make sure they have a “can do” attitude, experience and appropriate educational back ground for the tasks they are hired to accomplish. Susan M Heathfield, Human Resources Expert, recommends having a checklist for hiring employees.
2) Make sure that they go through a new employee training program to ensure they are adequately trained in your policies and procedures. Savannah Marie from www.smallbuzclub.com recommends “5 Ways to Effectively Train New Hires”
3) Put in place clearly defined policies and procedures to help those individuals perform their job. For example, you can create a checklist. Kellogg & Andelson Accountants shares their “Systems and Processes – Internal Controls Best Practices” check list on their website. It is designed for Small Businesses.
4) Put in place periodic reviews which will offer constructive feedback to employees. Victor Lipman from www.psycologytoday.com discusses “How to Make Employee Reviews Constructive, Not Demotivating”
At the end of the day we all want to make sure our clients are taken care of to the best of our abilities. By implementing these suggestions, you will be able to release some control while ensuring your customers the best possible experience and ultimately allowing your company to grow in market presence and wealth.
Michael Prats
Posted at 21:10h, 28 AugustVery insightful, I will definitely be using your four quality controls when it comes down to that point in time.
Jed
Posted at 02:57h, 30 AugustHi Alicia. Very interesting take on this topic. Have you thought about it in the context of succession? That is, do you intend to be the long term founder-CEO, or do you have a plan in mind for someone else eventually taking that role? And, if the latter, will that make it difficult to be true to thine own self?
asmcpa@yahoo.com
Posted at 14:44h, 01 SeptemberIn a CPA firm succession is a tricky thing because in order to be partnered in the business I would have to have another CPA. In order to do that I would likely have to dissolve my current LLC and form a new LLC – partnership. So while there may be a need to do that at some point, it is more likely that I would sell the business to another CPA and they would form their own LLC. Of course, time can only tell. You never know when you might find another like minded CPA that you would love to partner with in the future.
Maria-Elena Surprenant
Posted at 23:40h, 30 AugustAlicia,
Great research, and very well written post. I truly believe that there comes a point when a founder must relinquish control of the business, and hire others to come on board and help carry out the mission and vision. I could not agree more with in you relation to the suggestions you give in finding and equipping employees. The search process must not be taken lightly, and is at time extensive but worth it in the long run. Even though a company may find an exceptional employee, it is important to have periodic reviews as time moves forward and circumstances change.
To me, it is so important to hire someone that who isn’t solely motivated by wealth, but who genuinely loves they do and desires to bless others through their talents. This is a difficult thing to find in this world.
Maria-Elena
Joe
Posted at 19:56h, 31 AugustAlicia, the above examples are an excellent way in growing your business. You clearly defined the importance of how critical it is to hire the right employee. The checklist is another way to make sure you know what you want in an employee. I always kind of figure when hiring employees it would by word by mouth. Or even someone that was suggested to you or someone you already know. Also, the periodic review is critical. I think your employees should know exactly where you stand for their initial review and another half way before the reporting period. Where I work at we have to document our reviews with our employees to make sure they had the opportunity achieve success.
Angie Ritter
Posted at 23:36h, 31 AugustAlicia,
I think you offer some very wish suggestions regarding business considerations. While it is all too true that there are very few business endeavors which can survive as a “one man show,” it doesn’t necessarily follow that to delegate is to lose control of the business entirely. Making wise choices not only in establishing your business but also in expanding it can help to ensure that a business remains true to its founders vision, even when that vision must partially rest in someone else’s hands.
Angie
Mitchell McDowell
Posted at 00:40h, 07 OctoberAlicia,
The portion of this blog that discusses personal reflection time certainly hit home with me. There many different facets and skill sets required to run a successful business. Sales people are good at selling. Numbers people are good at the financial side of the business. It is rare that you find someone good at both. If you know who you are and what your business needs then you’ll have a starting blue print of who to hire or bring in as a partner.
Mitch