Many university students are funnelled into a conservative career such as a lawyer, engineer, actuary or accountant. This is often the popular choice and has the advantages of receiving stable income and benefit packages – it is a “safety net” career and offers the prestige of the title and security of the degree.
That being said, there are a lot of insights that you may miss if you use the narrow definition of what entrepreneurship means in the traditional sense – “starting your own business.” Entrepreneurship is more than that and, in my view, should be looked at using a three-principles based approach. The principle of entrepreneurship is to observe challenges and find ways to improve them while simultaneously weighing up the relevant costs and benefits.
Principle 1 – Adding Value Within Organisations
In my field, being an actuary with a data science background, you always need to find a better way of doing things. We need to use our resources, skills, and systems in a manner that would support our organisations to ensure that we add value to society.
In essence, we need to use statistical or modelling techniques responsibly to ensure that three key focal points are met, which is easily adapted to becoming a viable entrepreneur, with a trusted reputation:
- We do not mistreat or take advantage of consumers;
- The results of initiatives or strategies are measured appropriately; and
- There are no biases based on torturing data to get the results you want.
In addition to doing a good job, we needed to ensure that the work we do can be repeated, with ease and automated where relevant. This will ensure that our influence is long lasting and scalable, which is also critical to starting your own business or initiative. Most long-term solutions should also be flexible enough to add value to society, in whatever touch-points they are impacting.
Principle 2 – Benefitting Society
This is not about how much you give but rather what impact you have. We need to be honest with ourselves and determine appropriate measures to monitor success and what our ROI is aimed at becoming. This is often a challenge and is oversimplified or overlooked by many. For example, we may celebrate success metrics by reviewing how many scholars we fund or how much money was given to upcoming entrepreneurs.
This measure will have little benefit if all the scholars drop out or all entrepreneurial initiatives fail, we will essentially be celebrating an empty figure. The impact we have needs to be long-lasting and setting up society for success, with or without your continual influence.
Responsible and appropriate ways of measuring benefit will help add value to many initiatives. It’s a significant risk starting an initiative without any key performance indicators or measures of success, as you will have nothing to benchmark against and no measure to celebrate or punt as transparent and real success measures.
Principle 3 – Starting an Entrepreneurial Initiative
Some skills are necessary to start your initiative and working for a large organisation may help you build these skills or refine them. Key performance indicators are often used within larger organisations, and these companies may have proper structures in place to learn communication skills, the importance of planning, setting up budgets, pitching ideas or tracking results over time.
As such, some young adults prefer entering the world of work as a first step and then using what they learn to start something new in the years to come. Whichever approach you take, ensure you are learning as much as you can and are open to mentorship, guidance and constructive criticism, we can’t possibly know everything, and there is always more we can learn and improve on.
Bringing It All Together
Starting an entrepreneurial initiative will require a lot of bravery and resilience, an open mind, a good idea, relevant skills and support (financial and social).
What I admire, is that a foundation such as the Make A Difference Leadership Foundation has robust structures in place to support and encourage their scholars, should they wish to start an initiative in the future. And despite the prestige or the safety in obtaining a degree, the foundation inspires the scholars to follow their dreams, no matter how audacious they might be.
With the vision of the Make A Difference in mind, we believe that our scholars and fellows will be able to contribute and add value to organisations. Some may start their own initiatives and those who don’t will still use the principles of entrepreneurship in their daily lives. We all aim to continuously identify solutions that will add value to those around us.
Build Solid Back-Room Basics For Business Success
What do South African entrepreneurs really know about what goes on behind the scenes building of businesses?
South Africa has a vibrant start-up culture with great ideas starting out with a bang, but closing down with a whimper because entrepreneurs picture the glory at the destination, but not the nitty gritty of the journey to get there.
Be smart about scale
When I started out, I literally did everything myself. I negotiated and signed leases, I arranged the furnishing for our apartments and managed the interior décor process. When guests started using our apartments, I signed them in at reception, and then carried their bags.
At that stage, there was no money in my business to pay for attorneys, interior designers and decorators and there certainly wasn’t enough money for porters.
However, when we got to 70 apartments, it didn’t make sense for me to be a porter any longer, so I hired someone to do that job, explaining clearly what I expected of him. Before I did that, though, I spent time designing incentives for him so that he would be more affordable for me, and so that he could earn as much money as possible.
Related: Training Is A Two-Way Trick
Know your talents – and your limitations
There are certain things I’m really good at, but I know without a doubt that sales isn’t one of them – and without sales, you don’t have a business. I couldn’t afford a top-flight salesperson, but I knew that I could attract the right talent with the right business model. I set some high targets for Pamela Niemand, but offered her one third of the business if she met them. We both won: she earned a share in a successful, trend-setting business, and my trend-setting business became successful!
Use your skills – but know when to hand over
My background in corporate finance meant that I had all the accounting skills I needed when we first started out, but I knew that the time would come when I would need someone focused on that side of the business full time. Doing it all myself first meant that I could brief my first full-time accountant clearly and with a deep understanding of what would be required – and that I could help that person find and fix any challenges based on my experience.
In summary, my simple advice to anyone starting out would be to bootstrap your business yourself without investors or staff for as long as you can, but don’t over-extend yourself. Know when to delegate tasks away so that you can focus on what you’re really good at – but don’t do it before you have a solid understanding of what’s required. Know what you’ll never be able to do, and bring in that resource from the beginning – but do it based on performance-based incentives, so that your fledgling business doesn’t lose out if your early hires don’t perform.
The Myth About The Relationship Between Entrepreneurs And Taking Risks
This is the true relationship between entrepreneurs and the apparent illusion of risk.
“I can’t be an entrepreneur or start a business. I don’t have the appetite for risk.” This line is spoken regularly to brave few that leave the perceived safety of a job, take the plunge and venture into the unknown world of being an entrepreneur. However, there is a gross misunderstanding in the appetite for risk that entrepreneurs are believed to have innately inside of them.
The little-known truth is that the majority of entrepreneurs don’t like taking risks and according to Luca Rigotti and Mathew Ryan in their paper that explores a model for quantifying risk and its translation into enterprising action, the results were very interesting.
Risk is explained by these theorists as taking action where the outcomes are unpredictable as well the factors leading to that outcome are unknown. One of the theorists in this area, Saraswati, who coined the term “tolerance for ambiguity” has a more accurate description of what the outside world deems taking a risk.
In simple terms, entrepreneurs don’t go head-first into the shark infested water because they like the idea of danger and potentially being eaten alive; or the thrill of being able to say that they survived whilst others perished in a pool of maimed flesh. They carefully calculate that the sharks have been fed recently, some of the sharks are ragged tooth sharks that whilst looking like they are set to devour a human being, are actually incapable of opening their jaws wide enough to bite. For those sharks that still have space or who smell blood and can’t resist the urge to kill, the entrepreneur has a cage set up that he can retreat into quickly and a knife with which to protect himself.
Tolerance for ambiguity is the careful evaluation of what is known at the moment where a decision must be made and an open-mindedness for what is not known. This, coupled with the agility to change course when new information is presented, has earned the label of high risk appetite. The appetite is not for the risk, but it is the ability to move down a path, when all the information is not known.
I likened it to a person moving around in the dark holding a candle. The candle casts a light that illuminates a limited parameter around the person holding the candle. What is beyond the light that the candle casts, is unknown and potentially a risk. But as the person moves forward, the light reveals what was unknown and in the shadows. As the light reveals new information and new challenges added to what they have already learnt, the person can make better informed decisions. The tolerance is in not knowing what lies in the shadows yet to be illuminated by the candle and then the confidence in his or her own ability to act on what new information is discovered.
None of this behaviour is risky or irresponsible. There is careful consideration for what is known and a tolerance for what is unknown. And once there is more information available, a calculated next step is taken and more information is assimilated into what is now known. This is the true relationship between entrepreneurs and the apparent illusion of risk.
7 Skills Every Entrepreneur Needs To Adopt Today
Want to know what skills can help you build confidence and your business? Here are seven…
For some people, becoming an entrepreneur is as easy as stepping off a bus. They have a big idea, they bring it to life, they hire employees and the next thing they are in a building smothered in branding and living the business dream. For others, the idea and the passion are there but they are unsure as to how they can make these into a sustainable reality. Entrepreneurial spirit isn’t like instant coffee – you don’t add ideas and suddenly get all the skills you need to thrive.
Want to know what skills can help you build confidence and your business? Here are seven…
1. Believable vision
Make sure that your vision is believable and achievable. It has to live in the realms of possibility, not as a blue-sky idea that looks good on paper but wouldn’t work in reality. You need to be able to live this vision so make it realistic and achievable. This will not only keep you on track, but your employees as well.
2. Be inclusive
You need to ensure that every person who works with you feels as if they are part of your vision and understand it. They need to relate to where the business is going and how it plans to get there. Many leaders don’t understand why employees are not engaged with their business and it’s because many of them don’t actually understand what the business does.
3. Communication is critical
If you don’t have fantastic communication skills, then now is the time to hone them. When it comes to building employee morale, commitment and engagement, nothing works as effectively as constant communication. The same applies to client relationships. You need to repeat the vision and ethos of the company at every opportunity and you need to be part of the team that does this communication.
4. Be visible and transparent
You are communicating, now you need to make that communication genuine by being both open and clear. People respond incredibly well to transparency. They feel as if they are part of something that recognises their value and contribution and it fosters a more inclusive company culture. Often toxic cultures come about thanks to a lack of communication and visibility. People know when things are being kept secret and react negatively to it, regardless of whether they’re an employee, a customer or a manager.
5. Be practical
You aren’t going to build an empire in a fortnight so focus on a realistic and practical business strategy that has clear benchmarks and even clearer goals. Communicate these with the company and keep everybody on the same page. Practical and achievable means long-term success.
6. Build opportunities
As people become immersed in your company and part of its growth they will also need opportunities to grow. You need to tie their careers to the business and create opportunities for them.
7. Be human
It takes people to build a culture, a company and a future. It’s essential that you are human in your interactions and your treatment of others. The impact that a down to earth and authentic attitude can have on a company is extraordinary.
Lessons Learnt2 weeks ago
Lessons From The Rich And Famous: Manage Your Money Like Oprah To Avoid Going Into Debt Like Nicholas Cage
Increase Profitability3 days ago
Leon Meyer GM At Westin Cape Town Shares 4 Experience-Driven Tips On How To Keep Your Team Productive
How to Guides2 weeks ago
The 10 Most Reliable Ways To Fund A Start-up
Celebrity Businesses15 hours ago
11 Celebrities That Are Profiting From Their Investments In The Lucrative Pot Industry
Cool Offices5 days ago
6 Companies With Amazing Office Layouts To Inspire Your Office Redesign
Company Posts2 weeks ago
Building Customer Relationships
Entrepreneur Today1 week ago
How Are South Africans Feeling About The Work Environment?
Self Development1 week ago
(Infographic) How 9 Creative Minds Got Their Ideas