Created on 2019-04-01 06:03
Published on 2019-04-01 07:03
India follows 1st April to 31st March as a financial year. While the world celebrates 1st April as Fool's day, what is going in the minds of Indian founders, promoters, directors and all entrepreneurs? Most of them are blank about what happened in last year and even more are blank about how they would like to see the next year as on today. The moment entrepreneurs try to visualize either the actual or the future financials, plethora of thoughts starts distracting them about the operational difficulties, unfinished agenda's, forthcoming challenges, disrupting business models, unstable manpower, team and their competency challenges, stakeholder's obligations etc.
What should be your entrepreneurship reward for last financial year and what should it be for the next year? If you do not know, you are not alone. 90% start-ups fail and of those 10 % which succeeds, only 30% goes to next generation. Why is it so? The obvious answer is either the business is not motivating adequately to the entrepreneurs or the entrepreneurs are not performing enough for their business to the level that can enable the business to afford their reward. Business being baby of entrepreneur, ultimate responsibility lies on entrepreneur.
Over years of experiences of diverse businesses, I have observed some fooling by entrepreneurs of the enterprise which results in April Fool.
- I had a great plan (How many times reviewed, revised and executed to deliver performance ???) but so many factors changed....
- I am the best in the industry (business market share ???) yet I am not rewarded adequately (peer business performances vs rewards ????) ...
- Why should I be low paid even if I am not performing? If I am not motivated, how will I perform (entrepreneur's promise to business - performance ??? Business's promise to entrepreneur-profit???) ?
- The company is not doing good, it will do great next year (how ????) and then we shall increase entrepreneur's rewards...
- Investor's do not know, how we are running the show and we have in fact performed the best ( budget vs actual ???) considering .............
- Our valuation should be based on future growth (Past track ??? This year plan ??? Future Plan???).....
- So many ...
Economics defines factors of production as land, labor, machinery and entrepreneurship. The reward for entrepreneurship is profit not salary. No profit no reward. In economics all cost is variable. During creation of GDP, the market players in economy gets churned as mentioned above i.e. 90% in startup and 70% in 1st generation. Economics reflect human behavior under circumstances of limited means, unlimited wants and substitute use of means. The moment entrepreneurs hesitate to churn voluntarily under continuous years of adverse performance, economy accumulates under/non performing assets reducing the GDP growth rate.
The obsession of the entrepreneur to their business model and it's continuity in continuous adverse performances over multiple financial years is the result of lacking on
- Fire that drives entrepreneurs
- Entrepreneur's mindset to learn from qualified and experienced professionals
- Entrepreneur's willingness to learn and execute from own reviews
Mentoring and CFO services handles the healthiness of the business model after the above three things are improved by entrepreneurs and help to strengthen it during adverse financial months, not years. If the entrepreneurs wait for months, then April Fool day is sure to come in entrepreneur's 1st day of new financial year.
Happy new financial year, 1st April 2019...
Best wishes