Undercapitalization 2, The Kiss of Death or Slow Suicide - Your Dual Role As Owner and CEO
In the first article on undercapitalization we exposed some unromantic truths regarding the importance of capital to the success of your small business and judging by the views to the post it's obvious we struck a nerve! The interest generated since UNDERCAPITALIZATION; the kiss of death or slow suicide was posted has been surprising to say the least, so to keep up with the interest I am releasing additional segments of this important topic over the coming weeks, starting with the next installment; UNDERSTANDING YOUR DUAL ROLE AS CEO & BUSINESS OWNER Throughout the first article we talked a great deal about the overall challenges facing the small business owner specific to adequate capital.
I discussed how difficult it can be to adequately fund your business and the many pitfalls that await those who choose to overlook the importance of this critical element.
If you hope to build an outstanding company - naturally one assumes you do or you wouldn't take the time to acquire this type of knowledge - then it's helpful to break down your funding and financial objectives based on the specific understanding of your dual role as business owner and CEO.
It's also critical you understand your relationship to money and of equal importance your employee's relationship to money within your business, and yes, even on a personal level.
Like it or not there is a deep emotional relationship for each of us as it relates to money.
Therefore, by extension, if your organization is not clear on how money works or lacks a mature relationship to money it could prove costly.
There's a quote on this topic by Michael Gerber that resonated deeply with me once I read it, I hope it has the same affect on you.
" the fact that few people have a grip on their money means few companies do also" Michael Gerber.
Most of us are so far removed from this thought process that we might as well live on the moon.
This quote hit me immediately and continues to guide my financial decisions.
I am hopeful when you arrive back from the moon (as I did) it will do the same for you.
With these words now fresh in your mind it's helpful to recognize that from this point forward one of your key responsibilities prior to determining your capital requirements, is to sort out how your emotional resistance to "how" money works will affect the success of your business.
Don't hesitate, do this immediately because here's the sad reality, the majority of owners or managers are color-blind when it comes to this consciousness; far too many don't recognize the greenness when it comes to the financial health of their business.
Most of us have programmed our minds to ignore the financial perils until it is much too late, then upon fits of panic, attempt to fix what may be unfixable or at the very least should have been addressed far earlier.
Sadly, as the scenario unfolds the business owner now finds himself expending enormous energy, time and commitment explaining to the banker/s, financier or investor (which in most instances is you) what is now unexplainable in both context and reality.
Not only is this unwise, it puts the business owner in a tenuous decision-making conundrum, often with regrettable results.
The obvious negative here is that decisions made during these episodes are done so under self-imposed duress and not as one would hope, arrived at through the knowledge and wisdom obtained by proactive foresight or pre-planning, all of which require a more studied approach.
An approach that is void of stress and which mitigates the overemotional hysteria that typically arrives upon that instant when the proud but befuddled enterprise owner realizes she is vastly underfunded or that their business requires additional capital IMMEDIATELY! Thankfully these challenges can be addressed without an unreasonable degree of discomfort.
However, as one might imagine the time to identify these opportunities is prior to the crisis, or better yet, during those wonderful early-days when you are deciding to start your business.
In my view it's not so much a matter of when we understand our emotional connection to money, or even how that connection directly affects funding, financing or capital; what's more important is that we finally and thoroughly understand it! To help in this regard it's important to recognize that the successful business owner appreciates she has two distinct roles; each requiring a separate strategy and understanding.
In most instances however, these roles are deeply conflicting, ergo where most of us falter.
Role number #1 is that of Business Owner.
Role number #2 is that of CEO.
To understand how these roles interrelate, you must separate yourself from the business (figuratively) so you can begin to recognize the differences between them and your specific role within each...
more at onecriticalelement.
blogspot.
ca
I discussed how difficult it can be to adequately fund your business and the many pitfalls that await those who choose to overlook the importance of this critical element.
If you hope to build an outstanding company - naturally one assumes you do or you wouldn't take the time to acquire this type of knowledge - then it's helpful to break down your funding and financial objectives based on the specific understanding of your dual role as business owner and CEO.
It's also critical you understand your relationship to money and of equal importance your employee's relationship to money within your business, and yes, even on a personal level.
Like it or not there is a deep emotional relationship for each of us as it relates to money.
Therefore, by extension, if your organization is not clear on how money works or lacks a mature relationship to money it could prove costly.
There's a quote on this topic by Michael Gerber that resonated deeply with me once I read it, I hope it has the same affect on you.
" the fact that few people have a grip on their money means few companies do also" Michael Gerber.
Most of us are so far removed from this thought process that we might as well live on the moon.
This quote hit me immediately and continues to guide my financial decisions.
I am hopeful when you arrive back from the moon (as I did) it will do the same for you.
With these words now fresh in your mind it's helpful to recognize that from this point forward one of your key responsibilities prior to determining your capital requirements, is to sort out how your emotional resistance to "how" money works will affect the success of your business.
Don't hesitate, do this immediately because here's the sad reality, the majority of owners or managers are color-blind when it comes to this consciousness; far too many don't recognize the greenness when it comes to the financial health of their business.
Most of us have programmed our minds to ignore the financial perils until it is much too late, then upon fits of panic, attempt to fix what may be unfixable or at the very least should have been addressed far earlier.
Sadly, as the scenario unfolds the business owner now finds himself expending enormous energy, time and commitment explaining to the banker/s, financier or investor (which in most instances is you) what is now unexplainable in both context and reality.
Not only is this unwise, it puts the business owner in a tenuous decision-making conundrum, often with regrettable results.
The obvious negative here is that decisions made during these episodes are done so under self-imposed duress and not as one would hope, arrived at through the knowledge and wisdom obtained by proactive foresight or pre-planning, all of which require a more studied approach.
An approach that is void of stress and which mitigates the overemotional hysteria that typically arrives upon that instant when the proud but befuddled enterprise owner realizes she is vastly underfunded or that their business requires additional capital IMMEDIATELY! Thankfully these challenges can be addressed without an unreasonable degree of discomfort.
However, as one might imagine the time to identify these opportunities is prior to the crisis, or better yet, during those wonderful early-days when you are deciding to start your business.
In my view it's not so much a matter of when we understand our emotional connection to money, or even how that connection directly affects funding, financing or capital; what's more important is that we finally and thoroughly understand it! To help in this regard it's important to recognize that the successful business owner appreciates she has two distinct roles; each requiring a separate strategy and understanding.
In most instances however, these roles are deeply conflicting, ergo where most of us falter.
Role number #1 is that of Business Owner.
Role number #2 is that of CEO.
To understand how these roles interrelate, you must separate yourself from the business (figuratively) so you can begin to recognize the differences between them and your specific role within each...
more at onecriticalelement.
blogspot.
ca
