Entrepreneur’s Key Assets: What Are They and How Does It Work?
Money is a key asset for entrepreneurs. That’s what many people believe to be true but is that really so? Personally, I think this statement is debatable. I have to admit, though, that money is critical for business success. However, just having a specific amount of money will not necessarily make you successful.
I started my own business when I was young and didn’t have a large initial equity to start a company. Yet I still managed to pull it off. What helped me?
These were social capital and knowledge I’ve been building and accumulating gradually. And I am not talking about determination or passion alone here—this is a must-have. It is something that fuels every person who wishes to start their own thing and succeed.
In my opinion, the most important assets every entrepreneur should have are the team, connections, finances, technologies, and expertise. You can start and then scale up your business if you take the right approach to your assets, their management, and development. What does this mean? Let’s tackle it together.
Five pillars of entrepreneurship stability: Here’s how to manage them
Many entrepreneurs focus solely on figures while other aspects are forced to take the backseat. However, this approach can be extremely detrimental if you wish to succeed. You need to look at the bigger picture. Let’s examine each asset briefly so that you know how to deal with it.
Finances. These do not include just initial equity. Essentially, this is an entire financial system used within the company. In order to manage finances expertly, there are at least three things you need to understand:
• First of all, you shouldn’t treat the company’s money as your own, even if you own a 100% stake in it. Otherwise, you’ll be tempted to use these funds for your own private purposes which can easily lead to the project’s bankruptcy.
• Second of all, profit should generate profits. Keep investing money in your business, scale up, and push it forward. This is the only way for the revenues to grow.
• Third of all, make sure to optimize your expenses. This also applies to tax payments. You need to have an experienced lawyer on your team to help you out with legal matters, especially if you are running your business in different countries. This person will be able to come up with a relevant solution to reduce the tax burden as well. If you don’t have a text optimization expert just yet, feel free to contact me on social media.
Team.The revenues and success of the company largely depend on the people you’re working with. This is why I’d like to emphasize three key principles here as well.
• The first principle is: Invest in your team. Arrange advanced training for it, host workshops, set up a library with useful books and courses your employees will have access to at all times. That being said, these workshops should really be beneficial and actually help improve the performance of your projects and your team’s work.
• The second principle is: Promote strong relationships between departments. These aren’t just teambuilding or recreational events. Before the full-scale war, my employees would regularly meet up and play Mafia or other games. This is an excellent way for them to get to know the people they’re working with.
• The third principle is: Don’t be detached. I try to spend time with my employees. Whenever I’m traveling to a specific city, I make sure to have an informal meet-up with my team to discuss things, relax, and just have fun. I want them to know that I am a member of the team just like they are. It really is important to stay open and take a genuine interest in people’s lives.
Connections (otherwise known as networking). . This helps you achieve your business goals much faster. By building ties with the right people, you strengthen your business reputation and tackle many business tasks. What is important when it comes to networking?
• First of all, it’s about being able to make a good impression, knowing what to say, what to talk about, and how to introduce yourself so that people remember you. There are different ways to make a good first impression, not only during face-to-face interaction. With the right strategy and attitude, people will be the first to approach you. For instance, my current business partner, with whom we opened a coffee house chain, took the initiative to contact me first and offer to cooperate.
• Second of all, you need to establish communication and stay in touch. What I mean here is both verbal and non-verbal communication. Our words, gestures, and even business cards can often tell more about us than a long business meeting.
• Third of all, take the initiative and build your network not only based on your business needs. Do not overlook people who are currently outside of your business interests. Do you remember the theory of six handshakes? During the early stages of interaction, you cannot possibly know what a certain person can offer, and how you can benefit from it later on.
Networking is a really powerful tool that helps me expand my businesses, and attract new partners and investors for my projects.
Technologies. This one needs no special introduction. Every entrepreneur knows that in order to be successful, they need to use the latest technologies and solutions in their projects. By “technologies”, I also mean setting up in-house manufacturing facilities and launching fintech projects. How do I implement that within my companies? For starters, we have a project called SHARPAY. My team came up with a payment system that can be easily integrated with online stores and marketplaces. SHARPAY has a state-of-the-art security system and a Canadian license.
Second of all, my new project has a lot to do with advanced technologies aimed at maintaining wellness and quality of life. And these are just some of the examples to back it up.
Knowledge. I believe knowledge is the main asset when we talk about business. Just recall the world’s giants such as Google, Amazon, or Apple. Knowledge is what lies at the heart of their success. That being said, this goes far beyond just knowing the industry the company operates in. It’s about knowing how it should work. Inspiring success stories of famous people like Warren Buffett, John D. Rockefeller, and others are shining examples of this. Without having the proper knowledge, you won’t be able to organize the capital cycle and scale it up, manage your team’s work, or optimize resources. Knowledge is the backbone of success.
Asset development strategy
In order for the business to generate revenues and have solid growth potential, you need to know what lies at the core of your assets, how to amplify each of these components, and how they will expand from one business to another.
By spreading yourself thin and not prioritizing what’s really important, you can easily lose your focus and efficiency in all of the areas you’re dealing with. If you wish to go global with your businesses in different sectors, you will need to come up with the right asset development strategy for each of them.
Here’s what’s essential when it comes to asset development strategy:
- Clear understanding of the goal and the right planning approach. That way, you can see what you already have to succeed and how you can expand existing resources.
- Social capital. I have already emphasized the importance of networking and the team. You need to understand who will be on your team, what responsibilities each member will have, what the interaction will look like, and how you will manage all of these processes.
- Financial planning should include thorough preparation for each stage of your development, i.e. how much you expect to receive at each stage, how to scale up and manage the capital in all of your projects.
- Understanding what you will be doing to move forward with your projects, where you will look for partners in investors, what your business integration plans are, whether you will need to relocate, and how you will optimize your expenses.
- Plan and goals for growth. This does not only include knowledge but also your own capabilities. At the initial stage of launching your business, you need to plan out its scaling, and ways in which you could start related businesses. For instance, the company I co-own had an investment project associated with the construction of cottages in the suburbs of Prague. After the team analyzed the region and its prospects, the company launched another project that is also linked to the real estate sector. This means that we have the same team, the same pool of knowledge, and practically the same business tools to tackle it.
Once again, the ability to work with your assets is what determines your business’s success. However, the path to it always starts with knowledge.
For the business to not only stay afloat but to expand and generate higher revenues, you need to grow your assets continuously. If you see that a certain area is demonstrating a decline, others may soon follow like in a chain reaction. Unless you pay attention to your team and its needs, you can easily lose excellent professionals or the level of your employees will be non-competitive as compared to other similar businesses. If you fail to pump up your management skills and optimize processes, the project may collapse due to poor leadership. Because of the inability to manage finances efficiently, your business won’t be able to grow. And overlooking modern technologies may cause you to lose your position in the market and fall behind competitors.
To avoid this from happening, make sure to take a consistent approach to your assets. Do not simply plan things but actually go and do them. Monitor and analyze the current project situation. See how the team is evolving, what new things have been implemented, and what processes got optimized. The owner should not fully rely on top management. They should be aware of everything that is going on if they wish for the business to move forward. So, make sure to keep your finger on the pulse, stay in touch with your team—not just the top management—, and work on yourself and your project.