Created on 2019-07-24 07:48
Published on 2019-07-24 09:02
On one day I met 3 people. One was a person of 4th generation entrepreneur, second a 5-6 year standing entrepreneur and the third a young boy with 2-3 years experience standing now at cross roads in his startup.
When I asked the first person about the impact that 4 generations brought on the business, he acknowledged that it is insignificant compared to the peers and the normal inflation rate and that he is the sole person now managing the business. The second person realized that he is at crossroad but wanted to have a structured solution at insignificant cost. The third has no money but was willing to learn and quickly execute the mentoring advice.
When we talk about the impact of the investment it is generally referred to for social, environmental impact but that will be biased. If Wipro's shareholder trust creates wider and deeper social impact but Wipro as a company doesn't do that well in IT Industry how shall we measure the impact? And will that impact sustain? Some important tips on creating impact.
- Impact Should be on Business Model not on it's parts alone: Every action of entrepreneur should create impact on strengthening the business model and not it's parts. If sale is growing but not at estimated gross margin then impact is good on sales but is bad on overall business model as it cannot be sustained. The fourth generation entrepreneur need to review the business model and only that can create impact, so far it has survived but without significant impact.
- Impact Should be fundamental: Trees grow more with ground water and less with rain water. The impact should strengthen the roots e.g. developing sales channels instead of individual customers, increasing returning customer share while expanding market share in new customers. The mid experienced entrepreneur need to invest more time in his development as an entrepreneur then recast the business model, this process is dynamic and volatile and hence not structured.
- Impact should be consistent: The Startup person quickly executed the advice and could break the mental barrier within few hours and could generate 25% return on his investment in single day. Imagine if it is compounded for year what great impact it can create. The fire in a belly has to run continuously to make it happen consistently.
- Invest in development as much as on growth: Invest in yourself to be a fine entrepreneur. Investment in business is safe only if the entrepreneur develops his/her qualities and execute them in his business model i.e. walk the talk. 1 lakh profit on 10 lakh revenue shows development, 1 lakh profit on 1crore revenue shows growth without development. With development, growth can compound and hence will always create impact.
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